Benefits of Therapist Liability Insurance Blog | Benefits of Therapist Liability Insurance
Insurance Basics 05/26/20

Benefits of Therapist Liability Insurance

Working as a therapist is an incredibly rewarding job, but having a career in mental health poses certain risks that make therapist insurance a necessity. While the highly personal, emotionally-charged nature of the mental health industry is what makes therapy successful, being involved in a subjective business means there’s a lot of gray area for potential claims to be filed.

Therapist liability insurance is typically made up of three policies: 

  • Professional Liability insurance for therapists
  • General Liability, also called commercial liability or business insurance
  • Cyber Liability insurance

Whether your employer provides insurance coverage for you, you’re a self-employed therapist, or work in private practice, having individual insurance is extremely beneficial.

Importance of Individual Coverage

Therapist liability insurance may not feel like a major concern if your employer offers coverage, but the possibility of paying your own legal fees out-of-pocket still exists. Even if you’re self-employed, you may be faced with similar issues—some states require therapists in private practice to work under the supervision of psychologists or psychiatrists. In this case, you may share an insurance plan.

Here’s why you shouldn’t rely on insurance coverage from someone else’s plan:

  • Gaps in coverage – Off-duty work, volunteering, or practicing off-site is likely not covered by your employer’s insurance. Your employer’s malpractice policy also may not provide license coverage without a formal lawsuit—for instance, if a colleague or client files a complaint against you with your state’s licensing board.
  • Policy limits – If legal costs have to be shared with other people in the practice, your employer’s policy limit could be maxed out, leaving you responsible for some, if not all, of your portion of the fees.
  • High-risk patients – Since each mental health professional has their own clientele, you could be seeing higher risk patients than your colleagues (suicidal tendencies, personality disorders, or severe mental illness), and may need increased coverage, according to the American Psychological Association (APA).

Three Policies of Therapist Liability Insurance

Anyone who provides advice and services should take the preventative safety measure of being insured, especially in the health and wellness industries. As a mental health professional, you genuinely care about your patients and work closely with them in the hopes of seeing them thrive—but jobs in mental and physical health leave you exposed to potential lawsuits.

Therapist liability insurance will help protect you from mental, physical, and even digital claims made against you by covering you on three fronts: professional liability, general liability, and cyber liability.

Professional Liability Insurance

Professional liability insurance for therapists, also known as errors and omissions (E&O) or MedMal, is your protection against malpractice claims. Mistakes can happen no matter what career you’re in, but as a therapist, if an unhappy client, high-risk patient, dissatisfied colleague, or even an organization files a claim against you, there’s a possibility you’ll lose your license.

Professional liability insurance provides coverage against claims such  as:

  • Negligence or lack of professionalism
  • Failed treatment or emotional progress
  • Cause of mental injury
  • Not referring a patient to a colleague with specialized knowledge

The expenses associated with malpractice claims are extremely high, but this insurance policy helps cover the cost of legal judgement, defense, and potential settlements. At the very least, all therapists should have their own professional liability policy.

General Liability Insurance

Whether your insurance provider calls this policy general liability, business insurance, or commercial liability insurance, it’s an essential precautionary measure for business owners and self-employed therapists, including private practice. Unless you’re an employee of a large organization or hospital, you’re responsible for your own office space, even as a renter. 

This means you’re held accountable for any claims to bodily injury on the premises of your business or in your office, and for any sort of property damage, even in some cases, if it’s done by a patient.

Having general liability insurance will help cover legal fees, medical expenses, and expenses associated with property damage.

Cyber Liability Insurance

In an increasingly digital world, cyber liability coverage is more important than ever. Data breaches and cyber crimes can put sensitive client information, like health records, Social Security numbers, addresses, medical insurance numbers, and credit card numbers, at risk.

This insurance policy typically covers the following expenses:

  • Notifying clients of a data breach
  • Restoring and recovering compromised data
  • Repairing damaged systems

Cyber liability policies not only help with cyber security, but also helps you avoid confidentiality violations. If client information from digital communication is compromised, and there’s no policy to help remedy the issue, it can result in claims of malpractice. Stacey Larson, the APA’s Director of Legal and Regulatory Affairs, suggests going over their Guidelines for the Practice of Telepsychology to minimize risks.

Looking to the Future

The expenses of fighting a claim made against you or having to settle out in court are unbelievably high, and their effects can derail your career. Mental health claims can drag on for years, deplete finances, and even result in a revoked license. Insurance is a small price to pay for time, money, and energy you’ll save in the long-run.

No matter if you’re an employer or an employee, a self-employed or private practice, or recent graduate looking to start your career as a therapist, you can get customized coverage immediately by reaching out to NOW Insurance. Whether you’re looking to get all three recommended policies—professional liability, general liability, and cyber liability—or to start off with simple malpractice insurance for counselors, NOW Insurance will help you find the plan that’s right for you.

Want to know the counselor malpractice insurance cost? Visit NOW Insurance for more information.

Sources: 

  1. American Psychological Association. Guidelines for the Practice of Telepsychology. https://www.apa.org/practice/guidelines/telepsychology
  2. American Psychological Association. 5 Ways to Avoid Malpractice. https://www.apa.org/monitor/2016/03/malpractice

 

Blog

Tips for protecting yourself and your business.

Insurance Basics

Getting Liability Insurance for Events

General

Starting an Event Planning Business: A to Z

Insurance Basics

How Much Does Event Planning Insurance Cost?

Insurance Basics

Insurance for Event Planners: What You Need to Know

Insurance Basics

What’s Included in Event Planning Insurance Coverage?

Insurance Basics

What Can a Tax Preparer Be Held Liable For?

Insurance Basics

Tax Preparer Insurance 101

General

4 Nurse Staffing Issues to Avoid

General

What You Need to Know to Be a Tax Preparer

Insurance Basics

Insurance for Bookkeepers: A Complete Guide

General

How to Start a Nurse Staffing Agency

Insurance Basics

What is Liability Insurance for Bookkeepers?

General

How to Build Customer Relations in Your Business

Insurance Basics

A Guide to Medical Staffing Insurance

General

Developing an Effective Risk Management Plan

Insurance Basics

All You Need to Know About Therapist Insurance

Insurance Basics

What is Malpractice Insurance for Counselors?

Insurance Basics

Benefits of Therapist Liability Insurance

Insurance Basics

What’s the Average Counselor Malpractice Insurance Cost?

Insurance Basics

Risk and Hazards of Being a Massage Therapist

Insurance Basics

Do Nutritionists Need Insurance?

Insurance Basics

What’s Included In Massage Insurance Coverage?

Insurance Basics

Everything You Need to Know About Malpractice Insurance Coverage For Nutritionists

Insurance Basics

Do Massage Centers Need Insurance?

Insurance Basics

How Much Does Nutritionist Insurance Cost?

Insurance Basics

Insurance Plans For Nutritionists: Everything You Need to Know

Insurance Basics

Massage Therapy Insurance: A Beginner’s Guide

General

Coronavirus Outbreak: 3 Tips to Keep Your Healthcare Business Safe

General

Company Working From Home? Stay Safe of Cyber Attacks

Insurance Basics

Business Interruption Insurance and Coronavirus

General

4 Best Practices for Medical Workers During the COVID-19 Outbreak

Insurance Basics

Inside the Hacker’s Mind – Social Engineering

Insurance Basics

Do Consultants Need Insurance?

Insurance Basics

Fitness Center & Gym Insurance: A Beginner’s Guide

General

Should Your Company Work From Home During the Coronavirus Outbreak

Insurance Basics

Why Your Business Needs Wellness and Fitness Insurance: A Comprehensive Guide

Insurance Basics

What Is the Cost of Gym Insurance?

Insurance Basics

What Insurance Do Consultants Need?

Insurance Basics

How Much Is Insurance For a Consultant?

Insurance Basics

Benefits of Consulting Insurance Coverage

General

Pay as You Go Insurance for Healthcare Professionals

General

You Have Your Physician Assistant’s License: Now What?

General

Why Are You Still Buying Occurrence Malpractice Coverage?

General

What Does Malpractice Insurance Cost?

General

Physician Assistant Malpractice Coverage: A Practical Guide

General

Do Student Nurses Need Malpractice Insurance?

General

Ouch, You Hurt Me! Do Nurse Practitioners Need Their Own Malpractice Policy?

General

What Type of Insurance Do Nurses Need?

General

Understanding Insurance Terms: Back to Basics

General

What Does Professional Liability Insurance Cover?

General

Types of Insurance Available for Small Business Owners

General

Potential Small Business Risks

General

General Liability Insurance: How to Keep your Business Protected

General

Choosing a Business Insurance Provider: Everything You Need to Know

General

Business Insurance Plans – Do I Need One?

General

Benefits of Professional Liability Insurance

General

What Is the Average Cost of Errors and Omissions Insurance?

General

What Is Cyber Liability Insurance?

General

What Does Errors and Omissions Insurance Cover?

General

Cyber Insurance 101: Why You Need It

General

What Does a Cyber Liability Policy Cover?

General

Errors and Omissions Coverage: What Is It & How Does it Work?

General

What Is the Average Cost of Cyber Liability Insurance?

General

Who Needs Errors and Omissions Coverage?