Why do counsellors need insurance?
Counsellors are exposed daily to clients who don't feel themselves and need someone else's guidance to get emotionally and mentally better. This responsibility does carry legal obligations and risks if things go wrong.
Financial claims from unhappy clients
Sometimes, counselling advice can lead to adverse outcomes. If your advice goes badly wrong, a dissatisfied client can demand compensation.
Accusation of overstepping the boundaries
As a counsellor, you conduct a lot of one-on-one sessions. If you say something and it’s taken out of context or considered discriminatory, you may face legal action.
Client injury on your premises
If you see clients face-to-face at your premises, there are risks of trips or falls during sessions with you.
Contract or professional body compliance
Specific insurance will be required if you are an independent counsellor or aspiring to become a member of an association or a professional body. Professional indemnity insurance will be essential, and public liability might also be required.
Damage to your work equipment
Suppose you use a laptop or computer to store your clients' files or conduct video sessions; if this gets lost, damaged or stolen, this will cause significant work disruption and financial burden.
Professional indemnity insurance for counsellors
Most self-employed counsellors should have professional indemnity insurance.
Professional indemnity is a legal cover that defends you if you face a legal claim due to your work. It provides legal advice and representation and pays compensation if due.
What does professional indemnity insurance for counsellors cover?
Professional indemnity protects counsellors from claims or accusations of wrongdoing from their professional advice or work product.
Cover includes:
- Failing your duty of care
- Making a mistake
- Acting negligently
- Giving the wrong advice or recommendation
For example:
- A client claims your professional advice caused them harm
- You failed to give the correct direction to a client when you should have
- You shared a client's confidential information with an unauthorised party
- You acted in a discriminatory manner
- You caused offence
Choosing a counselling professional indemnity limit that’s right
Selecting a reasonable professional indemnity limit for your counselling work is not always obvious; consider the following:
- If you're part of a counselling organisation, they usually specify the professional indemnity limit they require—some need as high as £2,000,000.
- If you're an independent counsellor, consider your level of qualification, experience, history of disputes with your clients, and the type of therapy you provide—the more complex your work, the higher the limit you might need.
- Think about what downside there might be if your advice goes wrong. How much might it cost to rectify?
- Some insurance providers offer as little as £50,000 of cover, which might be tempting as the price will be low. However, with the rising cost of legal services, ask yourself if this amount will go far enough to cover solicitors' fees and possible compensation.
Does professional indemnity insurance cover my counselling activities worldwide?
Your professional indemnity policy's ‘territory or geographical limits’ and ‘jurisdiction’ sections specify if your counsellor insurance will respond when working in different countries.
Territory or geographical limits:
The territory or geographical limit specifies where you can virtually or physically deliver your services. For example: “Worldwide.”
Jurisdictional limit:
The jurisdictional limit specifies which legal jurisdictions your policy will defend you if you are sued. For example: “Worldwide excluding US and Canada.”
Contract governance:
Any contracts or agreements you enter into with your clients should specify the ‘governing law’ for that contract, which is the jurisdiction in which parties can seek legal remedy for breach of contract.
Avoid entering contracts not governed by your local jurisdiction and/or excluded by your counselling professional indemnity insurance.
If you work with US and Canadian clients, you can reduce your risk by not entering contracts governed by US and Canadian laws.
Switching your professional indemnity insurance
Typically, in the UK, if you cancel a professional indemnity policy, you can no longer claim against it.
Therefore, if you switch your counsellor insurance provider, be sure your new policy covers your past work; this is called “retroactive cover”.
Should I keep professional indemnity insurance if I pause my counselling activities?
It’s wise to keep your professional indemnity if you’re taking a break or retiring from counselling. Claims against professional misconduct can surface months or years after you delivered the work.
Remember: If you cancel your policy, your insurance coverage will end, including coverage for any previous work.
How long you keep your cover in place is up to you. Consider the type of counselling you did and the likelihood that a client might bring a claim against you.
Public liability insurance for counsellors
Public liability insurance is also becoming commonly needed by independent counsellors.
Most counsellors meet clients at their homes, at their clients’ homes or the office. Face-to-face meetings can expose counsellors to liability if clients trip or fall.
Public liability takes care of instances where your client may have had an accident and is now asking for compensation. Alternatively, you managed to damage a client’s property (e.g. knock over an expensive vase) and asked to pay for it.
What does counsellor public liability insurance cover?
Public liability provides legal defence and covers a possible payout if you're found liable for property damage or causing an injury.
Cover includes:
- accidental injury or death
- accidental property damage
For example:
- A client visits you at your home and is injured in a slip or fall
- You see a client at home and ruin their new carpet by knocking over a cup of coffee
Other insurance counsellors buy
As a counsellor, your other insurance coverage needs may differ based on your situation. Do you rely on expensive computer equipment for your work? What if you were unable to work due to illness? Would you be able to handle unpaid invoices? Do you have employees?
Commercial legal expenses insurance
Most commercial legal expenses insurance will protect counsellors against various tax and legal issues you may encounter due to your profession, which are not covered by professional indemnity or public liability.
At Suited, we combined £100,000 of commercial legal expenses insurance with helplines and other tools to better assist counsellors in dealing with these issues. We call this Business Legal Protect, and it’s part of your subscription.
Business Legal Protect offers qualified advice and assistance with:
- Legal and accountancy matters concerning your business
- Criminal prosecution
- Compliance & regulation issues
- Unpaid invoices (over £200)
For example:
- HMRC flags you for an IR35 investigation
- You need legal help chasing a major unpaid invoice
- You need guidance on compliance issues for your business
Electronic business equipment insurance
As an independent counselor, your business operations probably heavily rely on electronic equipment.
Regardless of whether you own or rent this equipment, it is crucial to carefully consider obtaining an electronic business equipment insurance policy that provides coverage for potential damages or replacement costs in the event of any unexpected accidents.
Shopping for counsellor liability insurance
Finding the right insurance for counsellors can be difficult. So, it's helpful to remember the following tips, no matter which insurance provider you decide to go with:
Cheap counsellor insurance
Don't just focus on finding cheap counsellor insurance - consider the quality of after-sales service too. Make sure you can easily reach your insurance provider when you need to. At Suited, we provide multiple contact options and ensure a prompt response.
The reputation of the insurer is important
Having reliable insurance is crucial for those moments when you require it the most. At Suited, we only work with financially stable insurers who hold an A+ rating, ensuring that you receive a payout when you need it.
Many providers charge fees to amend or cancel
Many insurance companies offer low initial prices, but this could be a tactic to conceal additional fees for monthly payments, policy amendments, or cancellations. We at Suited do not charge any other fees, and you can cancel your policy at any time without incurring any additional costs.
Some policy wordings are restrictive or have a high excess
While some insurance providers may offer attractive prices, they may compromise on the coverage provided. Suited's professional indemnity and public liability policies come with a £0 excess, ensuring that you receive the full coverage you need.
