What insurance do counsellors and therapists need? A guide to counselling insurance
In this guide we look at which types of business insurance can be beneficial for counsellors and therapists, helping to protect their business and reputation.
With pressures in people’s lives increasing because of the rise in the cost of living, the increasing demands of employers on staff to work extra to recoup losses suffered during the Covid-19 pandemic, the lack of return on people’s savings, and the general uncertainty of the UK economy, it is no surprise that the demand for counselling in the UK is increasing. (1) .
Why is counselling important?
The increasingly important role of the counsellor in today’s society cannot be understated as the general public seek more help to maintain and improve their own mental wellbeing.
Counselling is important for many reasons, including:
• It can help someone to manage their emotions
• It can provide mental peace of mind and eradicate negative thoughts
• It can lead to self-discovery • It can help develop confidence and hope
• It can provide encouragement
• It contributes to self-acceptance
• It can help provide a person with direction and purpose
• It can help improve lifestyle choices
• It can give insight to problems (2)
This important role can be highly rewarding and can transform a person life, but it isn’t 100% successful and as such there have been many sad stories over the years across many different countries.
If something does go wrong on the back of a counsellor’s intervention, then the client or relatives of the client could take legal action against the counsellor or the counsellor’s business. Claims can occur if someone feels a course of counselling or therapy has not achieved the desired results or if someone has had an accident whilst on the counsellor’s premises.
Which insurances can provide protection for counsellors?
As with most industries, there are many instances in which a claim can be made against a counsellor or therapist. Some claims arise as the result of an accident, whilst others can arise from alleged negligence or even a malicious online attack on the counselling business. Counsellors insurance encompasses a range of policies to provide all round protection for your counselling business and your clients.
Some of the common insurances that counsellor’s benefit from holding are:
Public liability (PL) insurance – Possibly the most common type of insurance for counsellors. The policy covers compensation claims made by third parties. You’re not legally required to carry PL insurance, but it is good practice to hold this type of cover as some compensation claims can cost tens of thousands of pounds to settle. It might also be a stipulation of your professional membership association to carry PL cover.
Professional indemnity (PI) insurance – PI insurance will cover your professional activities, such as the advice you give to your clients. The policy will respond to a claim of negligence in your work or claims of poor advice from clients seeking compensation.
PI insurance is arguably the most important type of business insurance, especially to professionals who give advice to their clients.
Legal Expenses Insurance – This policy will provide cover for legal expenses incurred in the event of a legal action. The policy also provides access to a legal helpline and an online law hub which is packed with advice articles, legislation and business templates.
Legal expenses insurance will respond to cover a range of legal instances that many other business insurance polices do not cover, such as:
• Tax or VAT inspections
• Contractual disputes
• Employment tribunals
• Criminal charges being brought against you
• Landlord disputes
• Court attendance fees
Employers’ liability (EL) insurance – Many counsellors are self-employed and required to carry their own liabilities insurances. However, if you run a business that employs counsellors or therapists or any other types of employee, you are legally required to hold EL insurance with a minimum of £5 million of cover. The policy will cover claims of injury or illness suffered by your employees as a result of the work they do for you.
Cyber insurance – The world is increasingly run online, with data outstripping oil as the world’s most valuable commodity. As such, malicious cyber-attacks against businesses, and phishing attacks against individuals, are now common. If sensitive client data that you have stored on your computer systems is hacked and held to ransom, how would you cope?
Cyber insurance can help by providing cover for legal fees and compensation claims, as well as providing access to a cyber team to help resolve ransomware issues, phishing and other cyber-attacks.
Office insurance – Also known as buildings and contents insurance, our office insurance has been designed to protect your workplace if damage to the structure of your building occurs. The policy also provides cover for the loss of or damage to your office equipment from events such as fire, flood, or from a break-in.
Directors and officers (D&O) insurance – If you are a company director or senior manager you can be subject to legal action against you personally, even if a disgruntled client has already made a failed claim against your business. This would put your personal assets at risk if you were not covered. D&O insurance will cover the costs of defending you as a director of your company against allegations of wrongful acts and for damages awarded to your client if they win their case.
Potential claims instances against counsellors
The following are just a few of the example scenario that could lead to a claim against a counsellor or therapist:
Someone has an accident whilst on your premises – If a client trips and falls in your office, they could make a compensation claim against you, especially if they felt a stray cable, loose carpet, or a poorly sign-posted step was responsible. In this instance public liability insurance would cover you in the event of a claim.
Breach of client confidentiality – Sensitive client data must remain private. If a counsellor breaks this trust and reveals confidential information spoken during a session, this might well constitute a breach of their duty of care. Where a breach is unintentional, professional indemnity insurance can cover the legal costs in defending a claim and the compensation due to your client.
You make a judgement call that is questioned – Sensitive issues lead to difficult conversations with clients, which can result in different courses of action. If your notes are not precise and you impart advice that a client misinterprets, then they or their family could make a negligence claim against you.
Errors such as this can come from human error or from a lack of experience or training, and can lead to legal action if the client has suffered a loss or damage. In this instance professional indemnity insurance would respond to cover you in the event of a claim.
Still unsure about business insurance? Try our counsellors and therapists insurance decision tree here.
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