# NEMT Liability in 2027: What You Can Be Sued For and How to Protect Your Business

Canonical URL: https://nemtguide.com/guides/nemt-liability/ · Updated 2026-09-30

NEMT liability is what your company can be made to pay when a passenger, a bystander, or another driver is hurt on a trip, or when a broker or the government says you broke the rules. Claims grow out of falls, loose wheelchairs, crashes, riders left alone, and driver misconduct. Commercial insurance, careful hiring and training, the right service level on every trip, and complete records keep a claim survivable.

- A paid ride carries a higher duty. California asks paid carriers for the utmost care and vehicles that are safe and fit.
- Broker agreements make you defend the broker as well as yourself, and your policy limits do not cap that promise.
- An LLC usually keeps a judgment away from your house and savings, but the company's vans and bank account remain exposed.
- Abuse claims can surface decades after a ride, so buy abuse and molestation coverage written on an occurrence basis.
- Call the broker within its deadline after any incident and save the trip data that day, because lost evidence can bring court sanctions.

A rider slips on the lift platform. A wheelchair rolls forward when the van stops short. A woman with dementia is dropped at a clinic door that turns out to be locked. None of these takes more than a few seconds, and any of them can turn into a lawsuit a year later. This guide explains who can come after your company, what standard you will be judged by, and what keeps one bad moment from closing the business.

## The three kinds of NEMT liability

Money can leave your company three ways after something goes wrong.

| Kind | Who brings it | What it can cost | Example of the rule |
|---|---|---|---|
| Injury claims | Riders, their families, other drivers, the public | Damages and defense costs | California Civil Code 1714 (ordinary care) and 2100 (paid carriers) |
| Contract claims | Brokers, health plans, facilities | Their losses and legal fees under your indemnity promise, liquidated damages, withheld pay, termination | MTM Health's standard agreement, sections 7, 10, and 22 |
| Government claims | The state Medicaid agency, federal prosecutors | Recoupment, penalties for each claim, exclusion | The False Claims Act, and Louisiana's recoupment rule for uninsured trips |

The first row gets the most attention. The second can land on top of it, because broker agreements make you pay the broker's costs as well as your own. The third is covered in the [NEMT fraud guide](https://nemtguide.com/guides/nemt-fraud/).

## The duty of care you owe a rider

The baseline for an injury claim is ordinary negligence. California's Civil Code 1714 holds each person responsible for injuries that come from failing to use ordinary care or skill.

Paid carriers are held to more. California's Civil Code has set these duties since 1872:

| Section | What a carrier of people for pay must do |
|---|---|
| 2100 | Use the utmost care and diligence for passengers' safe carriage, provide everything necessary for it, and use a reasonable degree of skill |
| 2101 | Provide vehicles safe and fit for their use. No degree of care excuses a failure here. |
| 2102 | Not overcrowd or overload the vehicle |
| 2103 | Treat passengers with civility and give them a reasonable degree of attention |
| 2096 | For contrast, a carrier who takes no pay owes only ordinary care |

Section 2168 makes a common carrier of anyone who offers rides to the public. The wording differs from state to state, and so does the answer to whether a NEMT company is a common carrier. A local attorney can tell you which standard your state applies.

### Your service level sets the scope of the job

The service level on the manifest tells the driver how far the job goes. MTM Health's Virginia handbook (approved August 10, 2026) defines three:

- **[Curb-to-curb](https://nemtguide.com/glossary/curb-to-curb/)** is the default. The driver opens and closes doors, helps the rider in and out, and stows a wheelchair or other device, but does not lift the rider and stays at or near the van.
- **[Door-to-door](https://nemtguide.com/glossary/door-to-door/)** adds help between the vehicle and the door of the pickup or destination. It still excludes lifting, and drivers other than ambulance and stretcher crews should not go inside a home.
- **[Hand-to-hand](https://nemtguide.com/glossary/hand-to-hand/)** means passing the rider from a person at pickup to facility staff, a family member, or another responsible person at drop-off. Some riders with dementia or developmental disabilities need it.

Giving less than the booked level counts as abandonment in MTM's Virginia program. Giving more, such as lifting a curb-to-curb rider, takes the driver outside the job and invites injuries to both people. MTM's standard agreement adds rules for every ride: no member left unattended in the vehicle (section 2.JJ), no trip started or continued until riders buckle up (section 3.I), every wheelchair and scooter secured before the van moves (section 3.J), and no child carried without a proper restraint seat (section 3.K).

## What NEMT companies get sued for

Brokers track the moments where trouble starts, and they repeat on every trip. Modivcare's incident form lists them: loading, unloading, wheelchair and scooter securement, slips and falls in and around the vehicle, exiting a facility or residence, harsh braking, backing, and collisions.

| Moment | What goes wrong | The rule that sets the standard |
|---|---|---|
| At the door | A rider falls on steps or between the door and the van | The booked service level. Door-to-door includes escorting from the door. |
| Boarding and exiting | A fall on the lift or ramp, a chair rolling off the platform, a pinched hand | Broker training rules for passenger assistance and securement |
| In motion | A wheelchair tips or slides under braking, an unbelted rider is thrown forward, a crash | MTM sections 3.I and 3.J. MTM Rhode Island classes a securement problem without injury as a Tier 2 incident. |
| At drop-off | A rider left at the wrong place, at a locked door, or without the responsible adult | MTM Virginia puts substantiated abandonment at its top level: 3 points and a suspension of at least 5 days |
| Anywhere on the trip | Driver misconduct, assault, or abuse | Screening rules and abuse and molestation coverage, covered below |
| After the ride | Lost belongings, a privacy breach | MTM section 3.P: drivers do not take responsibility for riders' items, and a sign in the van says so |

Each moment has its own guide: preventing rider falls, [safe passenger transfers](https://nemtguide.com/guides/safe-passenger-transfers/), [wheelchair securement](https://nemtguide.com/guides/wheelchair-securement/), and [what to do after a NEMT vehicle accident](https://nemtguide.com/guides/nemt-vehicle-accident/).

## Who gets named in a lawsuit

A lawsuit over a NEMT injury can name the driver, your company, you as the owner, and the broker or health plan. Most of those paths lead back to your company.

### The company, for its drivers' mistakes

Under California law, a principal answers to outsiders for its agent's negligence in the principal's business, including wrongful acts committed as part of that business (Civil Code 2338). The rider was in your van on your trip, so expect your company to be named. Labeling a driver a contractor changes little here. MTM's agreement treats any individual the provider directly retains or employs as its driver, and puts all driver training on the provider (sections 1.E and 17). See [can NEMT drivers be 1099 contractors](https://nemtguide.com/guides/nemt-drivers-1099-or-w2/).

### The company, for who it hired

A negligent hiring claim says you should have known the driver was dangerous. Careful screening answers it. Florida gives an employer a legal presumption of careful hiring, in a suit over an employee's intentional wrong, if the background investigation done before hiring found nothing that reasonably showed the person was unfit (section 768.096, 2026 Florida Statutes). Choosing not to investigate does not by itself prove carelessness, but it gives up the presumption. Here is how the steps Florida describes line up with what MTM's standard agreement already demands:

| Check | Florida's investigation describes | MTM's standard agreement requires |
|---|---|---|
| Criminal history | A Florida Department of Law Enforcement check before hiring | A criminal background check before hiring and every year. No driver with a conviction for a sexual crime or crime of violence (sections 5.C and 5.I). |
| Driving record | A license record check with written consent, when the job involves driving | A three-year driving record every year. No driver with 3 or more at-fault moving violations, or 2 or more at-fault accidents with injury or damage, in 36 months (sections 5.C and 5.J). |
| References | Trying to contact past employers and references | Not listed |
| Application | Questions about convictions and past lawsuits for intentional wrongs | Not listed |
| Interview | An interview | Not listed |
| Exclusion lists | Not listed | Never use anyone on the OIG exclusion list or similar government lists (section 5.E) |
| Drug and alcohol | Not listed | Tests before hiring, after accidents, on reasonable suspicion, and at random (section 5.C) |

Running both sets of checks, and keeping the proof in each driver file, covers you on both fronts. See [NEMT driver background checks](https://nemtguide.com/guides/nemt-driver-background-check/).

### You, the owner

Forming an LLC shields the owners, but not the business itself. The SBA says an LLC protects its owners from personal liability in most instances, so a judgment against the LLC usually cannot reach your vehicle, house, or savings. The company's vans, bank accounts, and receivables are fair game. And the LLC does nothing for an owner who causes the crash while driving. See [LLC or corporation for a NEMT business](https://nemtguide.com/guides/llc-for-nemt/).

### The broker, and then you again

A rider may sue the broker or the health plan too, and your agreement routes that claim back to you. Here is how MTM's standard agreement handles it:

- You defend MTM and its client and cover their losses from claims over anything you did or failed to do under the agreement, including claims from your own staff, with attorney fees and any penalties charged to MTM because of you. MTM carves out only losses its own willful misconduct directly caused (section 10.A).
- You pay for the defense, and you may settle only on terms that fully release MTM and its client. If you refuse to defend, a judgment against them settles your liability too (section 10.B).
- Your insurance requirements are separate from this promise and do not limit it (section 10.C), and MTM does not promise its minimum limits are enough to protect you (section 9.C).
- You cover MTM's litigation costs and attorney fees whenever you must defend it (section 22).
- You tell MTM immediately about any civil claim against your company or drivers that comes from your trips (section 2.R).

WellTrans's Indiana agreement has you hold WellTrans, the State of Indiana, and its Medicaid agency harmless for claims connected to services you or your agents provide.

## Abuse and misconduct claims last longer

A driver is often alone with a rider who may not be able to tell anyone what happened. MTM Rhode Island puts this risk in its most serious incident tier. Its handbook (last updated July 1, 2026) lists sexual harassment or misconduct, physical assault, and a missing member as Tier 1 incidents, reported by phone at once and in writing within 24 hours.

Screening rules reflect that. Louisiana requires a criminal history check on every NEMT driver every year through the Louisiana State Police, an agency it authorizes, or the FBI, with the results sent straight to the broker (Medicaid manual section 10.3, July 14, 2025).

Brokers name the coverage too. WellTrans's Indiana agreement requires occurrence-based general liability that includes sexual abuse and molestation with no sub-limits. As of September 2026, Modivcare calls abuse and molestation coverage critical for work with vulnerable riders. See abuse and molestation coverage.

The policy form matters because these claims arrive late. California's Department of Insurance defines the two forms: an occurrence policy covers incidents during the policy period whenever the claim is filed, and a claims-made policy covers claims filed during the policy period, back to a retroactive date. Three states show how late a claim can come:

- **California** removed the time limit for childhood sexual assault claims arising on or after January 1, 2024, including claims against a company that owed the child a duty of care and whose negligence was a legal cause (Code of Civil Procedure 340.1).
- **Texas** allows 30 years for injuries from child sexual abuse offenses, including continuous sexual abuse of a young child or disabled individual, and 5 years for sexual assault (Civil Practice and Remedies Code 16.0045).
- **Florida** allows a claim founded on abuse of a child or vulnerable adult until the latest of 7 years after the age of majority, 4 years after leaving the abuser's dependency, or 4 years after discovery, and sets no limit for sexual battery on a victim under 16 (section 95.11(8) and (10)).

## How long someone has to sue

Ordinary injury claims run on shorter clocks, though some riders' clocks pause.

| State | Injury caused by negligence | When the clock pauses |
|---|---|---|
| California | 2 years (CCP 335.1) | Time as a minor, or without legal capacity, does not count (CCP 352) |
| Florida | 2 years (section 95.11(5)(a)) | Ask a Florida attorney |
| New York | 3 years (CPLR 214) | Ask a New York attorney |
| Texas | 2 years (section 16.003) | Time under age 18, or of unsound mind, does not count (section 16.001) |

A rider with dementia or an intellectual disability may be able to sue long after the usual two years. Hold on to trip logs, incident reports, driver files, and video well beyond these windows. Your broker probably requires that anyway: 10 years under MTM's standard agreement (section 2.S), and the contract term plus 10 years under WellTrans's. See [NEMT record retention](https://nemtguide.com/guides/nemt-record-retention/).

## Questions to ask your insurance agent

When a claim lands, the policy is what pays it, so the policy has to match the work. Start with the basics: personal auto insurance usually does not cover paid rides. California's Department of Insurance warns that most personal auto policies exclude a vehicle used as a "public or livery conveyance", which means driving for hire. Take these questions to your agent, with your broker contracts in hand:

| Ask | Why it matters |
|---|---|
| Is every van on a commercial auto policy, with the symbols my broker wants? | WellTrans Indiana requires the greater of local taxi rules or $1,500,000 per accident, written as Any Auto or symbols 2, 8, and 9. MTM's standard minimum is a $500,000 combined single limit. Louisiana requires at least $25,000 per person, $50,000 per accident, and $25,000 for property damage. |
| Does general liability include contractual liability and loading and unloading? | That is what answers your indemnity promise. MTM requires $500,000 per occurrence with broad form contractual liability that includes loading and unloading (sections 9.C and 9.E). |
| Is abuse and molestation covered, with no sub-limit? | WellTrans Indiana requires it inside its $1,000,000 general liability minimum. |
| Is the policy occurrence-based or claims-made? | An occurrence policy still answers a claim filed years after it ends. |
| Do I need professional liability? | WellTrans Indiana requires $1,000,000 per accident from providers that run wheelchair vehicles. |
| Are the broker and the state additional insureds, on a primary and non-contributory basis? | MTM, WellTrans, and Louisiana all require their names on your policies. MTM's status runs up to your full liability and umbrella limits (section 9.C). |
| Should I add a commercial umbrella? | California's Department of Insurance describes an umbrella as covering losses above the limits of the policies under it. It lists $500,000 and $1,000,000 as common commercial auto combined single limits. |
| Does workers' compensation meet the contract? | MTM requires statutory limits. WellTrans Indiana adds employer's liability of $100,000 each accident, $100,000 per employee for disease, and $500,000 disease policy limit. |
| Will any paid trip cross a state line? | Federal rules set $1,500,000 for a vehicle seating 15 or fewer including the driver, and $5,000,000 for 16 or more (49 CFR 387.33T). |

For limits by state and broker, see [NEMT insurance requirements](https://nemtguide.com/guides/nemt-insurance-requirements/) and [NEMT insurance cost](https://nemtguide.com/guides/nemt-insurance-cost/).

A gap in coverage can cost more than a claim would:

- **MTM** ends its agreement immediately when required insurance lapses (section 9.C).
- **Louisiana** may take back every payment for trips run while coverage was below its minimums.
- **CareOregon's** brokerages may pull assigned trips during a lapse and move toward suspension or termination when the lapse drags on.

## Contract penalties and government claims

Some liability arrives without a lawsuit. Brokers and the government can simply keep or take money.

- **Liquidated damages.** MTM can charge them under its performance schedule and pass along any penalty its client charges because of your service (section 7). MTM Rhode Island charges $500 for missing its incident reporting rules.
- **Points and suspensions.** MTM Virginia gives 3 points for failing to report an incident or accident, the same weight as abandonment. At 3 points a provider loses access to MTM's trip marketplace until the points clear, and at 10 it is terminated from MTM's network. Points stay on record for a year.
- **Unpaid trips.** MTM may refuse to pay, or charge a provider no-show, when a late pickup makes a rider miss the appointment (section 2.CC).
- **False Claims Act penalties.** A false Medicaid claim can cost three times the government's damages plus $14,308 to $28,619 per claim, for penalties assessed after July 3, 2025 (28 CFR 85.5). See the [False Claims Act](https://nemtguide.com/glossary/false-claims-act/).

## Training, reporting, and evidence

By the time a claim is filed, the trip is long over. Your training records, your incident reports, and the data you saved are what speak for it.

### Train before the first ride

Louisiana requires every NEMT driver to finish training before carrying anyone: defensive driving of at least four hours, renewed every three years; in-person CPR; child passenger restraint systems; and wheelchair securement with passenger assistance training, renewed at least every two years (section 10.3). MTM Virginia requires passenger assistance, HIPAA, and defensive driving training before a driver transports anyone, plus first aid and wheelchair securement where they apply. MTM's standard agreement requires a driver orientation and training program, with records in each driver's file (section 5.A). See [NEMT driver training](https://nemtguide.com/guides/nemt-driver-training/).

### Report on the broker's clock

| Broker | Report | Deadline |
|---|---|---|
| WellTrans, Indiana | Phone call for an accident or incident with injury, or a moving violation | Immediately, and no later than 3 hours |
| WellTrans, Indiana | Written accident or incident report, injured or not | 24 hours |
| WellTrans, Indiana | Police report and follow-up documents | 3 business days, or when available |
| WellTrans, Indiana | Drug test results for the driver and attendant, tested right away whenever a member was aboard or hurt | 72 hours after the test |
| MTM Health, Rhode Island | Phone call for an injury accident or Tier 1 incident | Immediately |
| MTM Health, Rhode Island | Written report, then the police report | 24 hours, then 5 business days |
| Modivcare | Incident report for any transportation event, injured or not | 24 hours |

One company form can serve every broker. The [NEMT incident report form](https://nemtguide.com/templates/nemt-incident-report-form/) collects what each of them asks for.

### Save the evidence the same day

Modivcare's form puts it bluntly. It tells providers that an incident often leads to a lawsuit, that they may be required to preserve messages, emails, photos, video, and electronic files about it, and that losing that material, even without meaning to, could expose the company to serious sanctions from the court. Download the trip record, GPS track, and any camera footage before anything overwrites them. See [NEMT dash cameras](https://nemtguide.com/guides/nemt-dash-cameras/) and [NEMT trip documentation](https://nemtguide.com/guides/nemt-trip-documentation/).

## A liability routine for a small NEMT company

| How often | What to do |
|---|---|
| Every trip | Confirm the service level on the manifest, buckle every rider, secure every wheelchair, and hand hand-to-hand riders only to a responsible adult |
| Every incident | Call the broker within its deadline, write the report the same day, save video and GPS data, and send any lawsuit to your agent and broker at once |
| Every new driver | Run criminal, driving record, exclusion, and drug checks, contact references, and finish training before the first ride |
| Every month | Rescreen staff against the exclusion lists and check that no license, insurance card, or training certificate has expired |
| Every year | Pull new driving records and background checks, review limits with your agent, and confirm every van is still listed on the policy |
| Every contract | Send the indemnity and insurance sections to your agent before you sign, and keep your LLC in good standing and your personal money separate |

## Frequently asked questions

### Can a NEMT company be sued if a rider falls?

Yes. A rider hurt on the steps, the lift, or the walk to the door can sue both the company and the driver for negligence. Loading, unloading, and falls are among the events Modivcare's incident form says a provider must report within 24 hours. What protects you is proof that the driver delivered the booked service level, had the training for it, and reported the fall the same day.

### Do I need abuse and molestation insurance for NEMT?

Many brokers expect it. WellTrans's Indiana agreement (revised October 16, 2025) requires general liability that covers sexual abuse and molestation with no sub-limits, and Modivcare calls this coverage critical for work with vulnerable riders. Ask for it on an occurrence basis, because abuse claims can be filed many years later, and in California some have no time limit at all.

### What insurance covers NEMT liability?

Several policies split the job. Commercial auto answers for crashes and injuries in the van. General liability with contractual liability answers for other injuries and the promises in your broker contracts. Abuse and molestation coverage, workers' compensation, professional liability, and an umbrella fill the gaps. WellTrans's Indiana minimums, for example, are $1.5 million auto, $1 million general liability, and $1 million professional liability for wheelchair providers.

### How long does a rider have to sue a NEMT company?

For an ordinary injury, two years in California, Florida, and Texas, and three in New York. Time spent as a minor, or without the capacity to make legal decisions, may not count, and many NEMT riders have dementia or an intellectual disability. Abuse claims last far longer, up to 30 years in Texas for child sexual abuse. Plan to keep records at least 10 years, which MTM Health already requires.

### Does my broker share liability when a rider is hurt?

Usually the contract sends it back to you. MTM Health's standard agreement makes the provider defend and indemnify MTM and its client against claims tied to the provider's service, pay MTM's attorney fees, and settle only on terms that fully release MTM. WellTrans has Indiana providers hold WellTrans and the state harmless for claims connected to their services.

### Should I tell my broker when someone sues my company?

Yes, right away. MTM Health's standard agreement requires immediate notice of any civil claim against your company or drivers that comes from its trips, as well as any criminal charge against a driver. Send the complaint to your insurance agent the day it arrives too, and to any facility or broker you promised to defend.

## Official resources

- [California Department of Insurance: Commercial Insurance Guide (auto, general liability, umbrella)](https://www.insurance.ca.gov/01-consumers/105-type/95-guides/09-comm/commercialguide.cfm)
- [U.S. Small Business Administration: Choose a business structure](https://www.sba.gov/business-guide/launch-your-business/choose-business-structure)
- [HHS OIG: List of Excluded Individuals and Entities](https://oig.hhs.gov/exclusions/)
- [eCFR: Insurance minimums for interstate passenger carriers (49 CFR 387.33T)](https://www.ecfr.gov/current/title-49/section-387.33T)
- [Modivcare: Member incident, accident, and injury report form](https://p.modivcare.com/rs/823-DBH-152/images/Accident%20Injury%20Report%202022.pdf)