Physicians transitioning from employed positions at Texas Medical Center institutions to private practice face an immediate insurance gap — the coverage your employer carried on your behalf disappears the moment you leave. Malpractice insurance, general liability, property coverage, cyber liability, and workers’ compensation for your staff all become your personal responsibility.
The transition is especially critical because malpractice claims can surface years after the treatment occurred. If your employer carried claims-made malpractice coverage, you may need tail coverage to protect against claims filed after you leave. For physicians financing a new practice through SBA loans, hazard insurance on the practice space is a lender requirement.
Key Takeaways
- Malpractice tail: If your employer carried claims-made coverage, you need tail coverage for claims arising from work done during employment
- New practice coverage: GL, property, cyber, workers’ comp for staff, and BOP at minimum
- Credentialing timeline: Insurance credentialing with payers takes 90–120 days — start before you leave
- SBA loans: Practice space financed through SBA requires hazard insurance with specific property coverage
- TMC-specific: Many TMC institutions provide occurrence-based malpractice, which doesn’t require tail — verify your policy type before leaving
Frequently Asked Questions
Do I need tail coverage when leaving TMC for private practice?
It depends on your malpractice policy type. If your employer carried claims-made coverage, yes — tail coverage protects against claims filed after you leave for incidents during your employment. If the policy was occurrence-based (common at larger TMC institutions), tail is not needed because occurrence policies cover incidents regardless of when the claim is filed.
What insurance does a new private practice need?
At minimum: malpractice (professional liability), general liability, commercial property, cyber liability, and workers’ comp for staff. Most physicians also need business income coverage and an umbrella. If financing through SBA, add the lender-required hazard insurance.
Disclaimer: This article is for informational purposes only and does not constitute insurance or legal advice. Consult our licensed advisors for guidance specific to your business.
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