Professional liability insurance for counselors is a business policy designed to cover malpractice claims brought against mental health therapists such as psychologists, occupational therapists, and social workers. Policies pay for your legal defense, including civil awards, if you’re accused of professional negligence. Counseling liability insurance usually costs $400 – $3,000 per year.
One way counselors can find affordable professional liability coverage is to work with an insurance broker like AP Intego. The company partners with industry leaders so counselors can get quotes from multiple carriers in under a minute when they complete a brief online application.
Top Professional Liability Insurance Providers for Counselors
|AP Intego||Mental health therapists who want to quickly compare professional liability insurance quotes|
|Healthcare Providers Service Organization||New graduates looking for affordable professional liability insurance for counselors|
|CPH & Associates||Counselors who want professional liability that covers incidents regardless of when they’re reported|
|The Hartford||Therapists who want coverage for events that occur prior to the policy inception|
|Hiscox||Counselors who want high professional liability limits|
AP Intego is an online broker that works with some of the nation’s top insurers, such as AmTrust and Travelers, to bring small business owners quality insurance solutions. Counselors can go to AP Intego for all of their liability coverages, including professional, general, and umbrella liability policies.
As a small business insurance broker, AP Intego can often offer multiple quotes from a single application, giving counselors an opportunity to compare offers and choose the policy and price that works best for their unique business. AP Intego’s brief application takes only a few minutes to complete, and quotes appear in less than 60 seconds. This makes AP Intego the ideal choice for counselors who need professional liability fast but who also want to comparison shop.
Healthcare Providers Service Organization (HSPO)
HSPO is the trade name of Affinity Insurance Services, a subsidiary of global broker Aon Insurance. The company has served the allied health industry for over 30 years and offers broad professional liability for counselors that includes coverage for defending licenses, representation at depositions, and expenses incurred during trials.
Recent graduates who need affordable coverage should consider working with HSPO. The company discounts professional liability insurance for counselors by up to 60% for new practitioners in their first year. Moreover, HSPO offers a 10% discount to American Counseling Association Members and a 10% discount for an additional three years to therapists who complete a risk management course.
CPH & Associates
CPH & Associates is an insurance agency that specializes in professional liability insurance for counselors and other allied health professionals. The company’s focus on mental health professionals means they have a deep understanding of the risks counselors face and the coverages they need.
CPH & Associates offer a professional liability insurance policy written on an occurrence basis, which is unusual for the coverage. What this means is the insurer pays covered claims whenever they’re reported, as opposed to only paying when both the triggering event and the claim is made while the policy is active. With an occurrence policy, claims are made even after the policy expires, making CPH & Associates the ideal company for counselors who want the security of knowing claims are covered even after they cancel their policy.
The Hartford is often listed as one of the best small business insurance companies. As a large national carrier, they can sell insurance to businesses of any size. However, they’ve dedicated a team to serving small business owners and have developed a professional liability product with broad coverage and high limits.
Counselors and other mental health professionals who want professional liability protection for claims made before, during, and after policy inception may want to work with The Hartford. The company’s professional liability insurance is a full prior acts policy, meaning it pays covered claims even when they happen before the policy has been bound. Plus, they have an optional extended reporting period endorsement that adds coverage after the policy ends.
Hiscox is an international insurance provider with a team dedicated to providing quality coverage to small business owners. The company develops expertise in specific industries, including allied healthcare, and this allows their representatives to quickly and accurately evaluate risk and offer insurance solutions.
Hiscox’s professional liability insurance for counselors is a smart choice for mental health therapists who are worried about the cost of a lawsuit. Counselors who request quotes online can get up to $2 million in coverage, but that can go up $5 million once a Hiscox representative reviews the application.
What Is Malpractice Insurance for Counselors?
Malpractice insurance for counselors is a type of professional liability coverage designed to protect psychotherapists, social workers, and other types of counselors when clients accuse them of negligence. Also called errors and omissions (E&O), malpractice insurance typically pays for lawyers, investigators, and court costs. Most counselors can find coverage for under $3,000 annually.
Unlike medical malpractice, malpractice insurance for counselors is not required by law. However, many mental health practitioners carry coverage because they don’t want to bear the cost of negligence claims on their own. A recent study by CNA found the average malpractice lawsuit costs over $113,000 for counselors.
What Malpractice Insurance for Counselors Covers
Like other types of professional liability, malpractice insurance covers allegations of negligence by paying for the policyholder’s legal defense when they are brought to court. Many policies also cover costs when a counselor is brought before a state licensing board. For example, if a client complains about their therapist’s negligence to the state board, professional liability insurance may pay the counselor’s lawyer’s bills and investigation costs.
Some examples of negligence claims counselors may face include:
- Multiple relationships despite potential for client harm: A marriage counselor taking on clients who are friends or becoming business partners with patients.
- Inappropriate or excessive disclosure: A social worker telling a client their life story to the point that the client does not receive treatment.
- Using new techniques without proper training: A psychologist using memory retrieval techniques to treat repressed memories after a weekend conference.
- Improper sharing of client information: A therapist accidentally emailing her client’s history to her other patients.
Additionally, professional liability insurance for counselors is most commonly written on a claims-made basis. This means policies need to be in effect both when the triggering event occurs and when the claim is filed. Claims filed after the policy expires are not covered.
Occurrence vs Claims-made Professional Liability Insurance for Counselors
Professional liability insurance can be written as an occurrence or a claims-made policy. When it’s an occurrence policy, your insurer pays covered claims whenever they are reported as long as the triggering event occurs while the policy is in effect. Claims-made policies need to be in effect both when the event occurs and the claim is filed. If you’re sued after your policy expires or is cancelled, your insurer doesn’t cover it.
Claims-made policies are more common and often less expensive than occurrence policies, but that’s because they offer less coverage. One way counselors can increase their protection is by adding prior acts and tail coverage. Prior acts extends their coverage to a retroactive date to cover claims made prior to the policy’s start dates. Tail coverage allows you to file a claim after your policy ends.
What Malpractice Insurance for Counselors Doesn’t Cover
Professional liability insurance for counselors only covers claims dealing with the services and advice they provide patients. Incidents covered by other policies, such as a patient’s slip-and-fall or an employee’s injury, are not included.
Other events not covered by professional liability insurance include:
- Damage to business-owned property
- Allegations of harassment, wrongful termination, and other employment-related claims
- Accusations of mismanagement by your board or officers
Because professional liability insurance is usually written on a claims-made basis, most policies do not cover incidents that occur before the policy is in force or claims filed after the policy has expired.
Who Needs Counseling Liability Insurance?
The professionals who need professional liability insurance usually make their living by providing expert advice, and that includes therapists working with individuals on personal, psychological, or social problems. These professionals need counseling liability insurance when they own their own practices, but many who are employed by others also get their own coverage.
Types of therapists who need by counseling liability insurance include:
- Marriage counselors
- Family therapists
- Social workers
- School counselors
- Alcohol and drug counselors
- Art therapists
- Pastoral counselors
- Occupational therapists
- Wellness counselors
Professional liability typically protects a business owner and their employees. However, this often means the employer’s policy protects their liability for their employee’s actions and may not provide sufficient coverage for the employee, which is why many therapists purchase their own policy. In fact, the CNA study shows that 84% of therapists’ professional liability claims were filed on an individual’s policy. Only 16% were filed on an employer’s.
“When you’re in private practice and contracted with insurance companies, professional liability insurance is required. But it wouldn’t be required for my independent license (LCSW) if I were working in another setting. However, I did purchase a professional liability policy when I worked in a school setting. It gave me a piece of mind that if I were sued, I could have my own representation separate from the interests of the school district. I have recommended it to others as a way to feel less vulnerable when they may be facing a litigious situation.”
Professional Liability Insurance Costs for Counselors
Professional liability insurance is a fundamental policy for counselors because it covers costly malpractice lawsuits. However, it’s also one of the more expensive coverages. Counselors expect their professional liability insurance cost to be between $400 and $3,000 annually on professional liability, depending on the amount of coverage they get. For counselors who get claims-made policies, this cost usually increases each year.
Professional Liability Insurance Costs for Counselors
|Years in Practice||Coverage Amount||Annual Premium||Deductible|
|One year||$1 million per occurrence / $1 million aggregate||$200 - $500||$0 - $5,000*|
|One year||$2 million per occurrence / $2 million aggregate||$250 - $550||$0 - $5,000|
|Three years||$1 million per occurrence / $1 million aggregate||$300 - $600||$0 - $5,000|
|Three years||$2 million per occurrence / $2 million aggregate||$350 - $650||$0 - $5,000|
|Five years||$1 million per occurrence / $1 million aggregate||$400 - $700||$0 - $5,000|
|Five years||$2 million per occurrence / $2 million aggregate||$450 - $750||$0 - $5,000|
*Counselors may be able to select higher deductibles.
Professional liability insurance written on a claims-made basis typically increases each year the policy is in effect because the reporting period increases and the insurer has a greater risk of having to pay a claim. Coverage amounts also impact how much counselors pay for coverage.
These aren’t the only factors that impact the cost of professional liability insurance for counselors. Insurers also consider other business characteristics, such as business size and location, and policy options, like deductibles.
Some factors that impact the cost of professional liability insurance for counselors include:
- Revenue: The more income a practice brings in usually means their insurance rates go up. This is partly because revenue can impact civil awards should the counselor end up losing in court.
- Employees: Most professional liability policies cover your employees, so having staff also increases your rates.
- Location: Some states have laws that make lawsuits and judgements against healthcare providers more likely. Counselors in these states typically pay more for their professional liability insurance.
- Deductibles: Counselors can sometimes opt for higher deductibles to help keep costs down. However, insurers are only willing to write policies with deductibles they think the policyholder can pay should they have to file a claim.
- Claims history: Filing claims in the past can increase your professional liability premium, in part because carriers see this as a sign that you may have more in the future. Most carriers consider both the frequency and severity of prior claims.
Tips on Getting Professional Liability Insurance for Counselors
The number of policy options to consider can make getting professional liability insurance a daunting task for counselors and therapists. These tips can make shopping for coverage easier.
Three tips for getting professional liability insurance are:
1. Work With an Agent Who Knows Your Industry
The ins and outs of professional liability insurance for counselors can be complicated, so it’s a good idea to work with an agent who knows the allied health industry. Their experience can be invaluable when it comes to finding an insurer who can cover your risk, identifying the appropriate type of professional liability coverage, and getting a policy that fits your budget.
“I asked other clinicians about their insurance policies, if they have ever used their policies or used the services their policies provide, and if they have been satisfied. I have found most policies to be very similar in terms of costs and coverage, but it was important to me to have an insurance provider who was willing and available to answer my questions or concerns.”
— Beth Holzhauer, MSW, LSCW, Womencare Counseling and Training Center
2. Compare Quotes From Multiple Carriers
Carrier’s professional liability coverage can vary both in terms of what’s included and how much it costs. This is usually due to the carrier’s experience with different types of therapists, and it makes it a good idea to shop around for your professional liability coverage. One way to do this is to work with a broker because they can usually get quotes from multiple carriers.
3. Consider Getting Prior Acts & Tail Coverage
Counselors who opt for claims-made professional liability insurance should consider getting prior acts coverage. Prior acts coverage extends the reporting period back to a retroactive date so that incidents occurring before the policy’s start date are covered. This additional coverage is especially important for mental health therapists who have started seeing patients but have yet to purchase coverage.
Professional Liability Insurance Frequently Asked Questions (FAQs)
Understanding what’s covered in professional liability insurance for counselors is an essential part of getting the appropriate policy for your practice. You can also read a few of our most frequently asked questions below.
What insurance do therapists need?
In addition to professional liability insurance, therapists usually need general liability to cover third-party claims of bodily injury, property damage, and reputational harm. Many therapists can get general liability combined with commercial property insurance in a package called a business owner’s policy (BOP). Depending on their state, therapists with employees may also need workers’ compensation.
Do counselors need malpractice insurance?
Malpractice insurance is another name for professional liability insurance, and counselors do need it. The CNA claims study found that the average cost of defending a license to a regulatory board is $3,727. Court cases can cost significantly more, and counselors without professional liability have to shoulder the expense on their own.
Do interns need professional liability insurance?
Interns and student counselors working towards their professional license may want to get their own counseling liability insurance. They face the same risks their supervisors do; however, their supervisor’s policy most likely covers the supervisor’s liability in a claim, not the intern’s. Most insurers offer students an intern rate that makes coverage more affordable.
Without professional liability insurance, mental health therapists may be on the hook for the cost of malpractice lawsuits or defending their license to regulatory boards. Unfortunately, these are some of the most common risks counselors face, so coverage is essential. Counselors should work with a knowledgeable insurance agent who can help them find affordable professional liability insurance for their specific operations.
A broker like AP Intego is a good option for counselors looking for professional liability insurance that fits their budget. Counselors can get multiple quotes under a minute after completing AP Intego’s brief application, and they can work with an agent if they have questions.