Life coaching insurance is any policy that protects your business from losses by helping provide defense and settlement of the claim. Additionally, life coaches should consider a business owner’s policy (BOP) for additional protection for their property and other forms of liability not found in professional liability. Costs for these combined policies can range from $1,735 to $4,100 annually.
Key Takeaways
- Life coach insurance is a way to help reinforce the professional nature of your business.
- It can be required by companies where life coaches work as independent contractors.
- The most important type of insurance for life coaches is professional liability.
- Life coach insurance costs for professional liability can range between $600 to $1,150 annually.
Life coaches looking for affordable coverage without sacrificing quality can compare quotes through Simply Business. This small business broker specializes in tailored policies to fit your business and can provide a quote in minutes.
Who Needs Life Coach Insurance
Any life coach working with clients to assist them in changing habits, reaching goals, and overcoming obstacles needs to consider life coach insurance. If you own a life coaching business and provide consultation to individuals or companies, then you should look into professional liability and, if you have any employees, workers’ compensation. If your business has its own office or equipment, then a BOP will be important for your business.
Many life coaches operate as independent contractors who work with an organization that helps match them with potential clients. Several businesses like this now operate with virtual meetings. In a situation like that, again, professional liability will be the most important type of policy for a life coach. And many companies will require the life coach to provide proof of insurance to contract with them. When that happens, a certificate of insurance (COI) offers all the necessary information on your business.
If a client has problems after following your advice on leadership, career, spirituality, wellness, relationships, or other topics—especially if they claim your advice led to some sort of financial loss—they could sue your business.
What Redditors Think About Life Insurance
I reviewed several threads on Reddit related to whether life coaches need insurance and what type of insurance a life coach should purchase. Fortunately, the majority of the Redditors understood the importance of life coach insurance outlined above. The most commonly purchased recommended policy is professional liability. Several life coaches were looking for insurance because they work as a 1099 independent contractor, but the company they hoped to partner with required that the life coach be insured.
A minority of the commenters seemed to be of the opinion that life coaches don’t “offer advice” and so cannot be held liable. This demonstrates a misunderstanding of the risk any business faces and is one of the reasons why insurance is so important. Life coach insurance isn’t something to purchase simply because you anticipate making a mistake; it is something you purchase to protect yourself in the event that someone accuses you of some type of negligence.
It very well may be that at the end of an investigation, it is determined your business did absolutely nothing wrong. But that conclusion can come at any time: very early and at little to no cost to you or after several years of an investigation culminating in a “not guilty” judgment by a jury. In either example, your insurance company would do the investigation and, if necessary, provide the defense.
Average Life Coach Insurance Costs
These quotes are an average of estimates taken from multiple quotes obtained while researching this article. They are simply estimates to help you get an idea of how much life coach insurance costs. The coverages listed would be the most important ones for a life coach.
Policy | Estimated Annual Premium | Coverage Amount | Deductible |
|---|---|---|---|
Professional Liability | $600 to $1,150 | $1 million total coverage | $500 per occurrence |
General Liability | $350 to $700 | $1 million per occurrence and $2 million aggregate | None |
BOP | $485 to $850 | $1 million per occurrence and $2 million aggregate liability with $15,000 in property coverage | $500 for property losses |
Cyber Liability | $320 to $1,400 | $1 million total limit | Varies from $0 to $2,500 |
While you would only need workers’ compensation insurance if your business has enough employees to satisfy the state requirement, we think it would still be helpful to have an understanding of how the premium is figured. Workers’ compensation cost is calculated using a formula that includes your industry, claims history, and the number of employees, so the price can vary significantly even within the same industry.
When calculating the cost of insurance for life coaches, providers consider a number of factors like risk, location, and revenue. Additional considerations are as follows:
- Claims history: Insurers typically ask for the last three to five years of claims history.
- Number of employees: Having more employees increases the risk for your business, and depending on location, you will probably need workers’ compensation insurance. A solopreneur carries less risk than a life coaching firm with multiple employees.
- Services provided: Health and wellness coaching services can increase your premium, but so can other types of coaching, like career advice.
- Property value: Insuring a free-standing building will cost more than mobile business equipment.
- Financial advice: The type of advice offered and whether you provide any financial advice—investment or otherwise—will be taken into consideration.
- Mental health: Insurers will want to know if your coaching touches on substance abuse or other mental health topics.
- Location: The location of your business, say California or Ohio, will impact the cost of the premium. Additionally, if your business operates across state lines, it will be taken into consideration when determining the premium.
- License: The line between a therapist and a life coach can sometimes be blurred. If you are a licensed therapist or nutritionist, the insurance company will take your additional training into consideration.
Premiums aren’t fixed. There are ways to save money on business insurance.
Common Life Coach Insurance Policies
Type of Insurance | What It Covers |
|---|---|
Professional Liability | Legal costs from lawsuits over professional errors, omissions, and negligence |
General Liability | Bodily injury or property damage claims by third parties |
Commercial Property | Business-owned property and equipment |
BOP | General liability, commercial property and, usually, coverage for loss of business income |
Cyber Liability | Costs from cyberattacks and data breaches |
Commonly referred to as errors & omissions (E&O) insurance, professional liability is essential for businesses whose service is advice because it covers intangible liability. As a life coach, professional liability is the most important coverage you can purchase because a life coach can be sued for negligence over their advice, for breaching confidentiality, or for giving bad career or investment advice.
Let’s say a manager hires you to help them develop a professional growth plan, and after following your advice, they get fired instead of getting promoted, they could turn around and sue your business. Professional liability helps your business by handling legal defense, costs, and any resulting settlement or damages.
E&O insurance is a narrower form of liability that doesn’t cover every scenario. So, life coaches should also consider general liability insurance to cover the broader exposures they have. This policy is especially important if your business has an office where clients come to meet with you there.
General liability covers three broad categories: third-party injuries, property damage, and advertising injury. This helps by handling medical bills, repairing or replacing the damaged property, and providing legal counsel and defense if the claim ends up going to court.
Some examples of a general liability claim are as follows:
- A client tripping on a step as they enter your office
- A fire at your office that causes smoke damage to a neighboring shop
- Accidentally breaking a Ming Dynasty vase in a client’s office
Many providers will offer a general liability policy that includes professional liability with its own separate limits. If you need both policies, see if this option is available, as it is usually cheaper than purchasing each policy separately.
The size of your business will impact whether this first-party coverage is necessary or not. While this policy is probably unnecessary for many life coaching businesses, if you do own property or rent an office and have furniture inside of it, then you may need commercial property insurance.
Most property policies have a blanket limit for all of the property at one location and cover named perils like fire, vandalism, and theft. Insurance endorsements are usually available and can cover events like equipment breakdown.
Coverage is usually limited to the location listed in the policy. If you have expensive equipment you take with you when visiting a client, then you will want to review your policy and may need inland marine insurance, which is also a first-party coverage that protects equipment you move around.
Depending on the size of your life coach business and your assets, you may want to consider a BOP. While commercial property makes sense for a larger life coaching business that owns a building, a BOP is better suited to a smaller operation. It is a combination of both liability and property and, usually, will include lost business income coverage, too.
There are several advantages to purchasing a BOP over the separate policies. The first is that when these coverages are bundled together, it usually results in some savings. The next is convenience—you have one policy for multiple coverages with the same company.
Learn more about the differences between a BOP vs general liability insurance.
Cyber liability insurance not only covers the restoration of computers after a cyberattack or data breach but also your public relations and crisis response to protect your business’s reputation. Life coaches may keep files containing highly personal and confidential material related to their clients. A cyberattack occurs, which could lead to a potential lawsuit from clients.
Whether this coverage is right for your business will be up to you. If your business stores sensitive information or operates virtually and a hack would make it impossible to operate, then at the very least get a free quote to see if it fits your business needs and would help the operations.
This is a coverage that isn’t always necessary to purchase as a standalone policy. Cyber liability may be available as an endorsement on a BOP or general liability policy.
Best Life Coach Insurance Companies
In evaluating insurance for life coaches, we considered whether professional liability was available, what type of coaching they insured, and the support services for claims, billing, and policy documents. Here are the best life coach insurance companies:
- Simply Business: Best overall life coach insurance
- Hiscox: Best for home-based life coaches
- Insurance Canopy: Best cheap life coach insurance
- The Hartford: Best for professional liability
- biBERK: Best for fast quotes
Simply Business: Best Overall Life Coach Insurance
Pros
- Quotes available quickly, ten minutes or less
- Professional liability tailored for consulting businesses
- Works with top-rated carriers
Cons
- Doesn’t sell any policies outside of the core policies
- Does not have 24/7 customer service
- You are limited in what you can manage with your online account
Standout Features
- You can compare quotes online from top-rated carriers. This is a great way to save money without sacrificing the quality of your coverage.
- It generates quotes in real time that you can adjust with updated life coach insurance costs.
- You can get a quote and purchase a policy online without ever needing to speak with anyone.
Cost: We received two quotes from Simply Business. One was for professional liability with $1 million in total coverage, costing $566, while the other was for general liability with $2 million aggregate, costing $370.
Financial Stability: The quotes we received were from Hiscox, an A- (Excellent) carrier. Simply Business is owned by Travelers, and AM Best’s rating of Travelers is an A++ (Superior).
Hiscox: Best for Home-based Life Coaches
Pros
- Flexible payment options
- Easy to get a quote online
- Same-day coverage is often available
Cons
- Not open 24/7; its hours are 7 a.m. to 10 p.m., ET, Monday through Friday
- Complaints are higher than average
Standout Features
- Hiscox offers global coverage for life coaches who offer international consultations.
- It provides quotes with limits that are more appropriate to the risks a home-based business faces.
- It’s an affordable option—Hiscox quotes are often lower than what I’ve found at other insurance companies.
Cost: We received a quote for professional liability insurance. It carried a total limit of $1 million and cost $46.33 monthly.
Financial Stability: While its roots go back over 100 years, it has only recently moved into the small business insurance sector. It has a solid rating of A (Excellent) from AM Best.
Insurance Canopy: Best Cheap Life Coach Insurance
Pros
- Coverage is designed for life coach businesses
- Purchase the coverage you need online
- Instant access to policy documents
Cons
- No 24/7 call center for customer service
- Coverage is unavailable in Missouri
Standout Features
- Insurance Canopy offers coverage for multiple types of life coaches, such as relationship coaches, career coaches, and mentors.
- It is an easy-to-purchase insurance program for life coaches where you can select coverage and limits that fit your business the best.
- This is an extremely affordable option. For a low cost, you can purchase general and professional liability insurance with plenty of coverage. Or, for just a bit more, you can add coverage for your property.
Cost: Insurance starts at $21.99 a month.
Financial Stability: While Hiscox is relatively new to the small business space, it maintains a healthy financial position. Hiscox received an AM Best rating of A (Excellent).
The Hartford: Best for Professional Liability
Pros
- Available almost nationwide
- Quickly get an insurance quote online
- 24/7 call center for claims
Cons
- No commercial app to manage your policy
- Usually, you cannot get same-day coverage or purchase a policy online
Standout Features
- The Hartford offers professional liability coverage for most situations, including defense costs, copyright infringement, bad advice, negligence, and misrepresentation. It is one of our top providers of professional liability.
- As a large insurance carrier, it has a strong financial rating, own in-house claims department, and support services that make for great customer service (i.e., 24/7 claims and an online account to create an instant COI).
- It has a pretty wide range of limits to make the coverage fit the scope of your business. Limits range from $500,000 to $4 million.
Cost: According to The Hartford, professional liability costs $76 on average per month.
Financial Stability: Hartford is more than 200 years old and insures over 1 million small businesses. Its AM Best rating is A+ (Superior).
biBERK: Best for Fast Quotes
Pros
- Professional liability is available nationwide
- Discounts up to 20% on insurance
- Has a strong financial position
Cons
- Limited state availability for other types of insurance
- Does not have a 24/7 call center
Standout Features
- biBERK makes it easy to get insurance quickly. Answer a few simple questions about your business, and it will generate a quote, which you can then purchase online.
- You can adjust the quotes, and the price will be refreshed. Again, this is done very quickly, letting you get insurance online that is right for your business.
- biBERK’s professional liability policy carries coverage for unfulfilled duties in a contractual relationship. If your business enters into contractual relationships with clients, then biBERK is a great option.
Cost: We received a quote for professional liability for $1 million in total coverage with a $1,000 deductible. The price was $584 annually.
Financial Stability: The Berkshire Hathaway Insurance Group, which biBERK is a part of, is a financially stable organization. AM Best rated Berkshire Hathaway an A++ (Superior).
How We Evaluated the Best Insurance for Life Coaches
We determined which insurance companies would be the best for your life coaching business through our in-house proprietary evaluation system. In our evaluation, we focused on the customer’s needs. We also paid particular interest to convenience, financial ratings (AM Best), customer service, types of policies offered, and the overall experience as a policyholder for a specific provider.
Frequently Asked Questions (FAQs)
Life coaching insurance is a policy or several policies that protect a life coach business from financial harm caused by claims. The claims can be liability claims of negligence by the business or first-party claims of damage to business-owned property. The most important policy for a life coach is professional liability insurance.
Because a life coach provides important advice to individuals or corporations that can influence significant decisions, the job has inherent risks. It is important to ensure the life coach is protected in case the advice results in harm, especially financial harm, to their clients.
From the quotes we received, the cost of professional liability for life coaches runs from $600 to $1,150 annually. These carried a limit of $1 million with a deductible of $500 per occurrence.
A deductible is the amount the policyholder agrees to pay when a claim is filed. If the claim is covered, the insurer will pay the remaining amount up to the limit of the policy. Policyholders can usually lower or raise the deductible. While general liability does not carry a deductible, professional liability does. It is important to understand your responsibility with a deductible when considering the amount of the deductible.
Bottom Line
Because of the important role a life coach can play in the life of a person or the trajectory of a company, they face potential lawsuits from dissatisfied clients and the risk of loss due to an accident that injures others or damages property. Life coach insurance helps protect the business by handling the costs of investigating and resolving claims.
By purchasing professional liability or a BOP from Simply Business, life coaches can better focus on helping their clients achieve their goals while also saving money by comparing quotes.
