The very nature of mental and behavioral healthcare leaves therapists vulnerable to lawsuits. No matter how talented a therapist you are, ethical quandaries and the benefit of hindsight can mean advice given in a session appears misguided.
Alongside the unavoidable dangers of human error, therapists are frequently exposed to the possibility of lawsuits.
Professional liability insurance provides financial and legal support should you and your practice be sued. In this guide, we’ll explore exactly what professional liability insurance is, why you need it, and how to get it.
Do Therapists Need Insurance?
Yes, you do need insurance as a therapist. Professional liability insurance, often known as malpractice insurance, can provide both financial and legal protection in the event of a lawsuit caused by professional negligence.
As well as professional liability insurance, therapists need general liability insurance. This covers accidents that might happen in the workplace.
What Does Professional Liability Insurance Cover?
Professional liability insurance offers protection against errors and negligence. If the advice or behavior of a therapist is perceived to have caused harm, a client or their family might decide to file a lawsuit.
Professional liability insurance provides financial and legal help in the event you are sued, allowing the practice to keep functioning. It offers coverage when advice given by the therapist was seen to have led to harm.
Additionally, it provides coverage when a lack of advice is seen as harmful. For example, failing to recognize when a threat of violence became credible might leave you vulnerable to a lawsuit.
Professional liability insurance can also protect against HIPAA fines and other lawsuits that can result from oversight. If, for example, you misplaced confidential information, you might be vulnerable to a fine and a lawsuit. Your insurance can help protect you financially during this period.
No therapist aims to harm their patient, but there are reasons why a client may feel they didn’t receive the care they needed. When this happens, they might decide to pursue legal action. While professional liability insurance can’t prevent this, it can reduce the risk that a lawsuit will destroy your practice.
What Doesn’t Professional Liability Insurance Cover?
Professional liability insurance doesn’t cover accidents that might happen on your property. For example, if a client trips and falls on a loose carpet, they might be able to sue the practice. This wouldn’t be covered by malpractice insurance.
Instead, this would fall under the protection of general liability insurance.
Essentially, professional liability insurance covers any legal action that might result due to your action (or inaction) as a therapist. Other lawsuits not related to professional conduct will fall under general liability insurance.
How Much Does Professional Liability Insurance Cost?
The cost of professional liability insurance is hugely variable, but it averages around $40 per month. However, your insurance costs will be unique to your practice, so get some quotes before deciding on a budget.
A key factor determining the cost of malpractice insurance is the type of client you see. Therapists who primarily counsel clients who pose a risk of violence, both towards themselves and towards others, are likely to pay more for insurance. These clients are considered high-risk.
Your standing will also affect the cost of your insurance. A therapist with years of experience and no legal issues is likely to pay less than a newly licensed therapist or a therapist with previous claims of negligence.
The location of your practice also plays a surprisingly important role. Some states have a legal climate that favors the therapist, while other courts tend to support the client.
Insurance Companies For Mental Health Professionals
Before investing in malpractice insurance, we recommend getting several quotes to compare. It’s also worth searching through the APA or a local support organization, as you may qualify for a discount.
Applying for insurance is typically an easy process. You’ll need to fill in your details, receive a quote, and decide on a service that works for you. However, don’t rush the decision. Make sure your policy covers everything you need it to and provides you with the necessary protections.
HPSO is a popular insurance option, thanks to its partnership with the American Counseling Association. They offer a range of insurance options designed to suit your specific practice, ensuring your coverage is right for your needs.
HPSO has insured over 1,000,000 members and businesses in its 40+ year history, so you know this is a company that understands the ins and outs of malpractice insurance.
The American Professional Agency is one of the largest insurance providers in the U.S., with over 30 years of experience protecting mental health counselors. Each policy is tailored to your practice, offering coverage for full-time and part-time therapists, as well as groups, individuals, and students.
You don’t have to be an Association member to sign up for the Mental Health Counselor’s Program, and their exceptional customer support can guide you through your options.
You can get a quote fast with Hiscox insurance, a company that’s been supporting small businesses since 1901. The tailored policies offer instant coverage and quick claims, and the wide range of options ensures you’re getting just the coverage you need.
CPH offers malpractice insurance for counselors and psychotherapists. You can get a quote quickly and easily, with coverage tailored to suit your needs. But where CPH stands out is customer care. If this is your first time buying professional liability insurance, they can guide you through the process.
Simply Business is one of the best online resources for finding an insurance quote. You fill in your details, and Simply Business will provide you with a range of quotes and coverage options. You can then browse through the presented options, and find the one that works for you.
Ideally, you’ll never need to rely on your professional liability insurance. But life, and behavioral health services, are rarely that simple. With comprehensive professional liability insurance supporting you, you can continue to offer your clients the best service possible, even in the event of a lawsuit.