How to Review a Locum Contract, Clause by Clause

Cory Kleinschmidt By Cory Kleinschmidt

Read a locum contract for six things before you sign: pay and overtime, who provides malpractice and tail, cancellation and notice terms, non-compete and exclusivity language, expense and travel responsibility, plus how disputes get resolved. Most of the risk lives in those clauses.

A locum contract is short enough to read in ten minutes and expensive enough to regret for years. None of these clauses need special training to spot. You just need to know what to look for, so here it is, clause by clause.

What Should You Check First in a Locum Contract?

Confirm the hourly or daily rate, what counts as billable time and what type of malpractice coverage the agency provides, including responsibility for tail coverage if applicable, before you read anything else.

Everything else on this page matters, but a strong rate with a weak malpractice clause, or an occurrence policy with a buried cancellation term, is where locums actually get hurt. Read for risk, not just for pay.

A locum contract is short enough to read in ten minutes and expensive enough to regret for years.

What Do the Pay, Overtime and Call Clauses Say?

The pay clause should state your rate, the unit (hourly, daily or per shift), what happens for hours beyond a scheduled shift and how call and callback are compensated. Vague language here (“competitive rate,” “as scheduled”) is a renegotiation waiting to happen. The financial terms are also where a tax-aware read pays off, since how you’re paid feeds straight into your 1099 taxes.

Disclosure: The Doctor’s CPA is a Locumpedia partner.

Look specifically for overtime or premium rates, minimum guaranteed hours (so a slow week doesn’t zero your income), holiday and weekend differentials and exactly when and how you get paid. Get the schedule and the rate in the same document.

Malpractice, Tail and Indemnification: What to Confirm

Confirm the policy is occurrence-based (or that tail is provided if it’s claims-made) and read any indemnification clause closely. Malpractice has its own guide on malpractice and tail coverage; the contract is where the promise becomes binding.

The clause to slow down on is indemnification, which can quietly shift liability onto you. Language that makes you responsible for the agency’s or facility’s losses is worth negotiating before you sign, not after. Check the dispute-resolution clause in the same pass: whether disagreements go to arbitration or court (and in which state) decides how any fight would actually play out.

What Do the Cancellation and Notice Clauses Cover?

Read how either side can cancel, how much notice is required and whether the facility can cancel shifts after you’ve committed. An opportunity you turned down other work for can evaporate if the cancellation terms are one-sided.

Watch for unequal notice periods (they can cancel on short notice, you can’t), no compensation for shifts canceled after you’ve arrived or relocated, plus “float” language that lets the facility reassign you to units or duties outside what you agreed to.

Non-Compete and Exclusivity: What’s Normal, What’s a Red Flag

Some restriction is normal; a broad or long one is a red flag. A narrow clause preventing you from going direct to that specific facility for a set period is common. A clause restricting where you can work generally, or for a long time over a wide area, deserves scrutiny.

Exclusivity language that prevents you from working with other agencies at all is worth pushing back on, since working with more than one agency is a normal locum strategy. See how to vet a locum agency.

Who Pays for Expenses, Travel and Housing?

The contract should state exactly what the agency arranges and pays for, what it reimburses and what’s on you. “Travel provided” isn’t specific enough, so get the split in writing. The tax treatment of these payments lives in the travel and housing and per diem and stipends guides.

How This Differs for NPs, PAs and CRNAs

The six clauses are the same for every clinician. APP contracts add one category physicians don’t have: a scope-and-supervision clause that defines what you’re actually allowed to do.

NPs: confirm the contract reflects the state’s practice authority (full, reduced or restricted) and any required collaborative agreement. See the nurse practitioner guide.

PAs: check the applicable practice arrangement, supervision terms and any ratio requirements. See the physician assistant guide.

CRNAs: confirm the supervision or opt-out arrangement matches the state and the facility. See the CRNA guide.

Key Takeaways

Frequently Asked Questions

What should I look for first in a locum contract?

The pay clause and the malpractice clause, because they carry the most financial risk. Confirm the rate, billable time and type of malpractice coverage, including responsibility for tail coverage if applicable, before anything else.

Is a non-compete normal in a locum contract?

A narrow one preventing direct contracting with that specific facility for a set period is common. A broad, long or wide-area restriction is a red flag.

Can a facility cancel my locum shifts?

Often yes, depending on the cancellation clause. Read the notice terms and whether you’re compensated for shifts canceled after you commit or arrive.

What is an indemnification clause?

It’s the clause that assigns who covers losses if something goes wrong. Watch for language making you responsible for the agency’s or facility’s losses. Negotiate it out before signing.

Should I sign an exclusivity clause?

Push back on anything that bars you from working with other agencies at all. Working with more than one agency is a normal locum strategy.

This guide explains what to look for so you can read your own contract with a sharper eye. Terms vary by agency, facility and state, so read yours in full before you sign.

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