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Top 5 Legal Pitfalls to Avoid as a Private Practice OT

by Brittany Ferri

However, there is a reason that our graduate-level courses typically include an introductory level healthcare administration class, along with topics such as ethics and legal issues. These concepts are important for any therapist to understand, as there are caveats and nuances associated with our responsibilities in clinical care settings along with our licensure and national certification.

Yet, such courses also provide therapists with a quick look into issues that must be considered before entering areas such as private practice. Still, there is so much that therapists must learn before entering the world of private practice. Below, we discuss some of the common, but unfortunate, pitfalls that therapists should avoid and plan around as a private practice owner.

Skimping on liability insurance

Some therapists may place less emphasis on renewing their liability insurance after they have been in practice for several years. As a new therapist, you may continue some of the same habits you did when you were in graduate school, including staying up-to-date on all of your requirements (annual physical, vaccinations, continuing education units, etc.). Unfortunately, some therapists may become lax in keeping up with these tasks due to the burden from additional work responsibilities.

As a private practice owner, keeping (and even increasing) liability insurance policies is crucial to safeguarding your business and yourself from the risks that may come along with treating patients. Adequate insurance policies are also very important for each therapist that you employ, since their practices have a direct influence on the success and profit of your business. If you have an existing or lapsed liability insurance policy and are unsure what is next, consult a representative to discuss policies that are geared toward private practice owners. These advisors may be able to offer advice to assist coverage for your practice and even potentially provide group rates for your staff.

Not working with a financial advisor

If you are in the early stages of your private practice or at any point where you are working within a tight budget, you may be looking for ways to save more money. Often times, therapists may view working with a very small team as a good way to cut down on spending. This decision may work in the beginning for the therapists and direct staff you employ, but cutting corners in terms of your financial team often proves more harmful than good.

Therapists who work with an accountant, financial advisor, or other consultant can largely benefit from collaborating to maximize their profit, minimize their spending, and set financial goals for their business. These professionals provide valuable advice, strategies, and know-how related to managing the intricate, complex, and sometimes overwhelming side of owning a business. Even therapists who have experience in business or administration should at least get an introductory assessment with a financial advisor to gain insight into weaknesses of their business that they should account for.

Lacking knowledge in business management

Some therapists who own a private practice make it a point to return to school and obtain a master’s in business administration (MBA) to help inform their business. However, this may not be attainable for all therapists with families, hectic work schedules, or tight financial situations. While returning to school may not be in the cards for all therapists who wish to open a private practice, these practitioners should still make it a point to receive some kind of education in healthcare administration and business management.

This education often takes many forms, including online webinars, in-person conferences or seminars, networking events, and more. As there is a wide array of continuing education available, therapists should use their discretion when identifying trustworthy and reliable forums of education. Education that is geared specifically toward business owners who are healthcare professionals will be especially helpful in managing issues related to your private practice.

Neglecting to lay out the details of your practice

Some therapists may struggle with the specifics of their practice, often times in especially integral ways. Therapists, and all private practice owners for that matter, should place a special focus on forming a business plan, setting financial and service-related goals, and determining their target audience. To allow for an effective business model, ideal location, and more, this type of research should be done long before a private practice owner opens their doors.

Therapists should have a thorough understanding of the audience they are attempting to target along with their personal needs, demographics, and treatment preferences. Private practice owners should then develop a business plan according to their target audience, professional specialties, funding, staff availability, and care resources. This will assist in forming their business as a whole according to the demands of individuals within the community.

Not taking advantage of networking opportunities

One of the most important ways to grow a business of any kind is by networking and increasing the visibility of your name, business, and the services you offer. This will help you form relationships with community partners, potential patients, funding sources, and more. Networking may be as simple as spreading the word and making connections with people at business seminars and educational courses, or attending community events for business owners to share advice and learn about each others’ ventures. Networking might even be far less formal than that, by reaching out to other companies and individuals via email to learn more about how to collaborate and mutually benefit one another.

Also, in the early stages of owning a business when your business may be a one-man operation or have a very small team, therapists may find themselves looking for interaction with others. Networking may be another way for therapists to share ideas and communicate at coworking spaces or other community work spaces.


For some therapists, owning a private practice is overwhelming and stressful. However, taking the appropriate legal and business-related precautions prevents some dangerous and harmful issues that may negatively influence your practice. Therapists should take advantage of all the opportunities they can to educate themselves, others, and grow their business as much as possible while taking steps to safeguard and enhance the services you provide. Not only will this benefit you and the patients you serve, but this will also assist in strengthening your business and poise your practice for growth so you can continue providing excellent care.


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