invited you to try Thrizer! Start your free trial and enjoy waived credit card fees for your first in charges.
As a therapist, your primary goal is to help your clients address their mental health challenges.
However, did you know that over 40% of therapists will face a licensing board complaint during their careers?
This stark reality underscores the importance of professional liability insurance for therapists (also known as malpractice insurance).
Designed to protect you from potential lawsuits that could arise while offering professional services, this insurance is not just a safety net; it's a crucial component of professional practice, providing peace of mind and financial protection.
Professional liability insurance, also known as errors and omissions insurance, covers professionals against claims of negligence or mistakes in their services.
This type of insurance is distinct from general liability insurance, which covers physical damages or injuries.
For therapists, professional liability insurance is essential. It provides coverage for:
This insurance is designed to address the specific risks that therapists face in their practice.
For example, if a client alleges that a therapist's advice or treatment caused them harm, professional liability insurance can cover the costs associated with defending against the claim and any potential settlements or judgments.
This protection ensures that therapists can continue to focus on their practice without the fear of financial ruin due to unforeseen legal challenges.
The Counselor Liability Claim Report, from insurer HPSO, provides valuable insights into the landscape of malpractice claims within the therapy profession.
Here are some key findings:
Therapists are particularly vulnerable to claims of malpractice due to the intimate and vulnerable nature of their work.
Common claims can include allegations of misdiagnosis, inappropriate treatment, breach of confidentiality, or even causing emotional distress.
Without professional liability insurance, therapists would have to bear the financial burden of legal fees and potential settlements out-of-pocket, which could be devastating both financially and professionally.
Professional liability insurance is crucial for several reasons:
In summary, professional liability insurance is not just a wise investment; it is an essential safeguard that allows therapists to practice with confidence, knowing they are protected against the uncertainties that come with their profession.
However, it's important to understand that not all policies are the same. Therapists should be aware of exclusions and limitations, such as coverage not extending to criminal acts or intentional wrongdoing.
Additionally, some policies might not cover specific types of claims, such as those arising from sexual misconduct or other intentional acts.
Understanding the common reasons for malpractice claims can help therapists take proactive steps to avoid these pitfalls. Here are the top ten most common malpractice claims against therapists, based on recent data:
Average Total Expense: $5,454
The average cost for defending against these claims, whether they result in settlements or not, is $5,454. This expense includes legal fees, lost earnings, and associated costs, highlighting the significant financial impact of malpractice claims.
It’s important to understand these common claims so you can avoid them. And it’s important to have professional liability insurance to cover any mistakes that may occur.
The cost of professional liability insurance can vary based on several factors, including the therapist's risk of facing a lawsuit, the size of their practice, and the level of coverage they choose.
Here are some insights into the typical costs:
Mary Tate, LCSW, shares her cost experience, saying, "I pay under $2k a year for my group practice of 4 clinicians. This also includes general liability insurance for our office in addition to professional malpractice."
Professional liability insurance is a must-have for your practice, so weigh the costs against the coverage.
It’s a crucial investment in the sustainability and security of your practice.
Here are five key ways to avoid a malpractice lawsuit. You want to be informed and avoid these mistakes.
Engaging in a sexual relationship with a client is the multiple relationship most of us think of, but this category is broader than that.
It refers to having more than a therapeutic relationship with a client or trainee, such as hiring your patient to be your housekeeper or seeing your housekeeper as a patient.
One common violation is around the decision about whether or not to allow a client to friend you on social media.
This can lead to a multiple relationship and a loss of objectivity on both sides, and confidentiality can also be compromised in that kind of relationship.
It's important to discuss social media and let clients know the risks of interactions in that space in your informed consent.
Zack Goldman, LCSW, underscores the importance of boundaries, advising, "Don’t do anything with clients that you wouldn’t want blasted on the news for the world to see."
Another key way to avoid malpractice claims is to set clear boundaries around your services and the therapeutic relationship.
During your first session with a client or patient, establish distinct boundaries as to what services you will provide, and what you can't or won't do.
Difficulties often arise from not using good informed consent. This happens with both new and experienced mental health professionals, particularly those working with children whose parents are divorced or divorcing.
They are hired as the child's therapist but then get drawn into advocating for one parent or the other in a custody dispute, which is outside the purview of what they do.
Having comprehensive informed consent is also important when using technology with clients, particularly when it comes to how clinicians deal with emails and texts from clients.
If this is a big concern for you, familiarize yourself with the APA Practice Organization's Guidelines for the Practice of Telepsychology.
Professionals in mental health have a full life outside of their careers. Understandably, this can contribute to stress.
But it’s critical to not let this stress become overwhelming and lead to errors and omissions in your therapy practice.
Spouses, friends, children, parents, and illness can stress even the most balanced therapist.
These stressors can be particularly acute among early career therapists who may be experiencing significant life changes.
The convergence of these stressful personal and professional experiences can often lead to burnout, and perhaps poor judgment.
Recognize the warning signs of burnout, such as headaches, an upset stomach, lack of concentration, irritability, or anxiety during sessions.
Poor self-care can lead to ethical violations, such as inaccurate or careless charting and billing, inappropriate or excessive self-disclosure with a client, or confidentiality breaches.
Business-of-practice issues such as professional liability and how to protect yourself are often not discussed during doctoral training.
It’s important to understand what your employer’s coverage (if applicable) includes and whether there are gaps that you might need to fill with your own malpractice insurance policy.
Consider what your liability limits are, what happens if legal costs exceed your employer’s limits, and if these limits are shared with other defendants.
Additionally, think about whether you are covered for off-duty work, such as volunteering in a professional capacity.
Given how often changes occur at the state and federal levels regarding laws and licensing board issues, mental health professionals must stay informed.
Belonging to professional groups such as your state psychological association can keep you up to date on changes that affect practice and can lower your malpractice risk.
Many state associations offer mentorship programs where early career therapists and psychologists can get guidance on malpractice and other business-of-practice issues.
Tate advises, "Stay up to date on your state licensure laws by signing up for emails and stay involved in therapy communities where discussions are happening about new mandates and regulations."
By following these guidelines and staying proactive, you can significantly reduce your risk of malpractice claims and ensure a long, successful career in helping others.
Selecting the appropriate professional liability insurance policy is crucial for protecting your practice. Here are several factors to consider when making your decision:
Coverage Limits: Ensure the policy offers adequate limits to cover potential claims. Standard policies often provide limits of $1,000,000 per occurrence and $3,000,000 aggregate per year, but you may need higher limits depending on your practice size and risk exposure.
Paige Bond, LMFT, highlights the necessity of adequate coverage, sharing, "The most influential factor in choosing [my insurance] was the reasonable price and coverage limits to be the minimum of $1,000,000/$3,000,000."
Cost and Premiums: Compare the cost of different policies and what they offer. While it’s tempting to choose the cheapest option, it’s essential to balance cost with the level of coverage provided. Consider both the premium costs and any additional fees.
Reputation of the Provider: Choose an insurer with a good track record in handling claims. Research reviews and ask for recommendations from colleagues to find a reliable provider.
Dr. Michael Grey, PsyD, emphasizes the importance of provider reliability, noting that his provider always answers his calls. For most, ease of communication will be important.
Additional Services: Some insurers offer added benefits like legal advice, risk management resources, and defense for licensing board complaints. These services can be incredibly valuable and provide additional peace of mind.
Bond has used these additional services, noting, "I have utilized their legal staff to give me direction on how to navigate difficult situations with past clients."
Specialized Coverage: Ensure the policy is tailored to the specific needs of mental health professionals. Generic liability plans might not cover all the unique risks associated with therapy practices.
Tate shared her experience, saying that, "Pulling an off-the-shelf professional liability plan did not feel comfortable for me. I vetted reviews and additional benefits when choosing my plan."
We recommend you do the same.
Obtaining malpractice insurance for your therapy practice involves several steps. Here’s a guide to help you navigate the process:
Research Providers: Start by researching insurance providers that specialize in professional liability insurance for therapists. Look for companies with strong reputations and positive reviews.
"[Shop] around and [get] quotes from multiple companies,” recommends Bond. “Even if you may get a recommendation from a colleague, it doesn’t mean you’ll have the same quote for pricing and coverage."
Get Quotes: Contact multiple insurance providers to request quotes. Compare the coverage options, limits, premiums, and additional benefits each provider offers.
Evaluate Coverage Options: Assess the coverage limits, exclusions, and any additional services included in the policy. Ensure that the policy meets your practice's specific needs.
Get Cyber Liability: Tate recommends, "Add the cyber liability add-on and read your plan! The recent change healthcare attack only highlights how healthcare information on the web can not be as safe as we thought."
Check for Specialized Policies: Many insurance companies offer business owner policies (BOPs) that bundle general liability and commercial property insurance.
While these typically do not include professional liability insurance, some providers offer specialized packages for therapy practices.
Consult an Attorney: Consider consulting with an attorney to ensure you understand the policy details and that it provides adequate coverage for your specific practice needs.
"I would recommend that they consult with an attorney,” adds Goldman. “This is a part of our profession and business that we need to be educated on and make the best decisions to ensure we are covered should there be an issue."
Purchase the Policy: Once you’ve selected the best policy for your needs, complete the application process and purchase the policy. Ensure you receive and keep all necessary documentation.
Review Annually: Regularly review your insurance coverage to ensure it continues to meet your needs as your practice evolves. Adjust coverage limits and policy details as necessary.
Grey recommends staying updated, saying, "Speak to your malpractice insurance, and you should always have a separate lawyer, just in case."
By following these steps, you can secure professional liability insurance that provides the necessary protection for your therapy practice, allowing you to focus on delivering quality care to your clients.
Professional liability insurance is not just a safety net; it is an essential safeguard that allows you to practice with confidence.
Bond advises new therapists, "I recommend shopping around and getting quotes from multiple companies. Even if you may get a recommendation from a colleague, it doesn’t mean you’ll have the same quote for pricing and coverage."
Whether you are just starting your practice or looking to review and enhance your current coverage, taking the time to choose the right professional liability insurance is a crucial step in safeguarding your career and your clients.
Choosing the right coverage for your circumstances can protect you legally and financially, and give you peace of mind. Plus, it’s a tax write off.
By following these recommendations and staying proactive, you can ensure that your therapy practice remains protected and that you can continue to provide the best care possible to your clients.
___
This blog post is provided for informational purposes only and is not intended as legal, business, medical, or insurance advice. Laws relating to health insurance and coverage are complex, and their application can vary widely depending on individual circumstances and state laws. Similarly, decisions regarding mental health care should be made with the guidance of qualified health care providers. We strongly recommend consulting with a qualified attorney or legal advisor, insurance representative, and/or medical professional to discuss your specific situation and how the laws apply to you or your situation.
