Counsellor Insurance

Counselling Insurance

Professional liability insurance protects counsellors from the risks associated with delivering services and advice.

Zensurance - Counsellor

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Liability insurance for counsellors

Counselling is a subjective practice, and distractions, stress, or personal trauma may cause even the most experienced counsellor to make a wrong decision involving a client. In today’s litigious society, you may be held legally liable for failing to meet the standard of care or causing your client harm even if you believe you’ve made the right decision. Regardless of the outcome, a lawsuit might be costly for your business.

Whether you offer counselling sessions in-person or online, navigating the mental health landscape requires a strong risk management strategy.

Canadian public health programs have magnified the need for increased mental health resources, support, and care as we move through and beyond the pandemic. As a counsellor, your role in helping Canadians cope with the health, social, and economic impact of the pandemic is paramount, which is why you must also protect yourself and your business from unforeseen claims and lawsuits.

Our counsellor insurance policy packages are designed to protect counsellors and psychotherapists against specific risks associated with providing counselling services and advice to groups or individuals.

Some of our clients include:

Any professional providing counselling services online or in-person should protect themselves with a counsellor insurance policy package.

Each counselling practice is unique, and insurance requirements may vary; a comprehensive policy package for counsellors and psychotherapy practitioners will typically include the following coverages:

  • Professional Liability Insurance, also known as Malpractice Insurance, offers coverage for actual or alleged negligence, errors, omissions, or failure to deliver a service as promised. In some cases, the result may be a bodily injury. As a counsellor, a client can sue you for any professional decision that causes harm, alleged or otherwise. The types of clients you treat heavily influence your risk of facing a malpractice lawsuit. For example, if you treat people with a history of violence or self-harm, your work may be more closely linked to your patient’s safety than if you provide couple counselling.

Claims and lawsuits covered by Professional Liability Insurance for counsellors may include:

    • Inappropriate relationships with a client;
    • Failing to report abuse;
    • Neglecting the duty to warn; and,
    • Failing to protect a client from themselves.
  • Cyber Liability Insurance is critical for counsellors who treat patients virtually. Approximately one in five Canadian small businesses has been affected by a cyber attack in the last two years. With recovery fees averaging $100,000, most business owners can’t afford the risk. In the event of a cybercrime, Cyber Liability Insurance may provide financial coverage for repair to computer and data infrastructure systems and notification costs, legal fees, credit monitoring, and crisis management.
  • Commercial General Liability protects against common risks you may encounter while running your practice, including actual or alleged third-party bodily injury or property damage. If you operate a physical location in addition to providing virtual services, you need CGL to cover medical fees and legal expenses, regardless of the lawsuit’s outcome. For example, a client slips on a patch of ice outside your practice, resulting in a mild concussion. Your CGL insurance could cover both the medical fees and legal expenses.
  • Commercial Property Insurance: is critical for counsellors leasing or renting a space as it protects your property (i.e., studio, equipment, inventory) from an insured peril, such as fire, theft, or vandalism. Commercial Property Insurance policies will often include business interruption (a.k.a. business income) coverage, which provides reimbursement for net income lost following an insured event.
    • Please note, that business interruption coverage will not cover income lost due to a pandemic, infectious disease, or government-mandated closure.

Multiple factors contribute to your counselling insurance policy’s cost, such as level of risk, training, experience, and location.

For Professional Liability Insurance with a $1M limit, you can anticipate premiums starting from $300 a year. Counsellors delivering online services can add a low limit of Cyber Liability Insurance to their policy for approximately $100/year.

If you store data that requires more security, you may choose to purchase a standalone Cyber Liability policy, which starts at $750/year and provides more protection should your data be compromised.

We’ve partnered with over fifty insurance providers to offer you different options that suit your business needs at the best price.

Counselling clinics

Comprehensive coverage that can withstand offering services, managing employees and general business liability risks is critical to operating a successful counselling practice. In addition to commercial property insurance and commercial general liability insurance, which are often required to rent or lease a space, we recommend several additional policies to protect your practice from claims and lawsuits.

Your liability insurance likely covers full-time employees working at your practice. However, please note that your coverage limit applies to all employees of your business, not individual employees. One option to accommodate all of your employees is to increase your policy limit. Hiring independent instructors that carry liability insurance is another way to ensure all parties have adequate coverage.

Suggested Coverage: 

  • Commercial General Liability Insurance
  • Commercial Property Insurance
  • Business Interruption Insurance
  • Professional Liability Insurance
  • Cyber Liability Insurance

Online counsellors

Online counselling services are well suited for digital platforms, and telemental health apps such as Layla Care, BetterHelp, and Talkspace make counselling more accessible than ever before. If you offer counselling services online via Zoom or an alternative platform, you run the same risks of seeing clients in person. You will want to protect your business against potential negligence claims or failure to deliver a service advertised with professional liability insurance. Of course, anyone collecting information about their clients (e.g., financial, health) or recording sessions will want to protect their business with cyber liability insurance in the event of a cyberattack.

If you run your practice from a home office, we highly recommend alerting your broker and reviewing your existing insurance policies to ensure they cover your current work environment. Many homeowners would be surprised to know their policies do not cover business-related losses or damages. Speak with your broker to see if a commercial property insurance policy is necessary for your home-based business.

Suggested Coverage: 

  • Professional Liability Insurance
  • Cyber Liability Insurance
  • Commercial Property Insurance

Independent practitioners

Working as an independent practitioner allows you to work in multiple locations, contributing your expertise to various groups. However, unless you are working at one place full-time, you are unlikely to be covered by an employer, meaning you need comprehensive insurance that moves with you.

If you offer services at multiple locations, general liability insurance could cover injuries or property damages during a session. Professional liability insurance may provide coverage for any claims of negligence or malpractice, such as advice that harms a client. If you offer sessions online, cyber liability insurance could provide coverage should your data be compromised.

Not only will purchasing insurance protect you from financial loss, but it may also help in securing positions, as both clients and employers want to see their counsellors are adequately insured.

Suggested Coverage: 

  • Commercial General Liability Insurance
  • Product Liability Insurance
  • Professional Liability Insurance
  • Cyber Liability Insurance

Getting insured is quick and easy!

Complete our 5-minute online application for a free counselling insurance quote.

Common claims scenarios

patient breakdown from memory loss

Problem: You are treating a client for repressed memories without suitable experience or training in the required technique.

Outcome: Your client sues you claiming that your treatment led to emotional distress. Your E&O Insurance may cover the legal fees and monetary judgment, totalling $44,000.

Computer hacker in black

Problem: A cyber hacker steals confidential client data, including financial information.

Outcome: Your Cyber Liability Insurance may cover the cost to restore your data system, while your Cybercrime Insurance policy could cover notification and reimbursement costs, totalling $185,000.
stressed patient in counselling

Problem: You fail to take proper account of a client’s health history, resulting in inappropriate recommendations and treatment.

Outcome: Your client’s family sues you for negligence. Your E&O Insurance may cover the subsequent legal fees and monetary judgment, totalling $56,000.

Frequently asked questions

Are counsellors who work from home protected by their Home Insurance policy?

A counsellor or therapist is not protected by her Home Insurance if she conducts counselling or therapy sessions at home. At the minimum, counsellors and therapists may consider purchasing General Liability Insurance to protect themselves from being held liable for bodily injuries and property damage to third parties, and Commercial Property Insurance to protect the space and contents of their home being used for commercial purposes.

What is the difference between a counsellor and a therapist and do these professions have different insurance needs?

The terms are broadly interchangeable and may refer to the same practitioner. Generally, counsellor refers to a practitioner who is treating a client over a short period of time (for e.g. to treat negative behavior patterns). Therapist, on the other hand, can be used to refer to the same practitioner when she is treating a client over a long time period (for e.g. therapy sessions for deep-seated or complex psychological issues). Regardless of what the professional designation is, Counsellor Insurance is important to protect the practice.

Do counsellors need both malpractice coverage and professional liability coverage?

Malpractice coverage is a type of Professional Liability coverage that applies to counsellors and therapists. Medical health practitioners such as therapists and counsellors deal with patients that may have a complex history of mental health. As with other medical services, mental health treatment and consultation are highly susceptible to negative outcomes due to negligence. Your Counsellor Insurance policy will usually include malpractice coverage in addition to other important coverages.

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