Why do life coaches need insurance?
Your clients come to you for your life coaching advice and to effect positive change in their lives and careers. In some ways, they put their life in your hands, and many will follow your advice faithfully.
However, assisting your clients with their life-changing ambitions might sometimes not work out. Disputes can arise, and if your client attributes their demise to your professional advice, then accusations may turn into legal disputes.
Blame for a bad outcome
As a life coach, you can significantly influence your client’s life. Your clients may blame you and demand compensation if their life has turned out for the worse.
Failing client expectations
As a life coach, you’re there to make a difference. If your client feels that their sessions with you brought nothing to the table, they may demand a full refund. If you refuse and the amount is substantial, they could also claim through the courts.
Something you said is taken out of context
As a life coach, you conduct a lot of one-on-one sessions. If you say something is taken the wrong way, you may face legal action.
Damage to your work equipment
Many life coaches rely on their electronic equipment to deliver sessions, create supporting material and track details of their clients. If something happened to your laptop or business computer, could you afford to pay the repair or replacement costs?
If a legal dispute arises
A client pursuing their claim against you can represent several legal, financial and reputational problems.
You may also need to hire a solicitor if your client hires one. Solicitor fees start at hundreds of pounds per hour, and you are likely to require many hours of their time to deal with an issue properly.
In the meantime, your reputation might be at risk. Angry clients might look for ways to vent their anger by posting unfavourable reviews about you online, which could jeopardise your business's future. You will need a way to respond quickly and control the damage effectively before the situation gets out of hand.
Professional indemnity insurance for life coaches
Professional indemnity insurance for life coaches is a key cover for this profession. It protects life, career and executive coaches and mentors against professional mistakes, accusations of negligence, breach of confidentiality and more.
The price of professional indemnity insurance for life coaches is very reasonable compared to the possible costs of situations that could arise. Good PI cover will give you the peace of mind that if something goes wrong, you are suitably backed financially and legally.
What does life coaching professional indemnity insurance cover?
A life coach can face various accusations stemming from their work with clients—the advice you give or the assistance you offer can sometimes lead to a legal dispute. Professional indemnity insurance provides legal and financial protection in those situations.
Cover includes protection against accusations of:
- Failing your duty of care
- Acting negligently
- Giving the wrong advice or recommendation
For example, you face a legal demand for compensation because:
- Your advice caused your client’s business to fail
- Your sessions yielded no results, and now you’re being asked to pay back all fees
- You shared confidential information about your client with an unauthorised party
- You acted in a discriminatory or offensive manner
When do I need professional indemnity insurance as a life coach?
Sometimes, life coaches are under the impression that life coaching insurance isn’t necessary because they only volunteer or provide services to clients with whom they have a good relationship.
Just because you’re unpaid doesn’t mean you don’t still have professional responsibilities to those you coach. Your actions, whether paid or not, can still be questioned.
Whilst it may be challenging for your client to prove guilt and win compensation, you will still have to respond legally to any accusation. Legal action can be costly, with representation running into several hundred pounds an hour. Without professional indemnity insurance, you must fund any legal action from your pocket.
Does professional indemnity insurance cover my life coaching activities worldwide?
Your professional indemnity policy's ‘territory or geographical limits’ and ‘jurisdiction’ sections specify if your life coach 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 life coaching 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 life coach insurance provider, be sure your new policy covers your past work; this is called “retroactive cover”.
Should I keep professional indemnity insurance if I take a break or retire from life coaching?
It’s wise to keep your professional indemnity if you’re taking a break or retiring from life coaching. 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 life coaching you did and the likelihood that a client might bring a claim against you.
Public liability insurance for life coaches
As a life coach or mentor, you see many clients face-to-face at various locations. Accidents sometimes happen and can lead to injuries or property damage. Public liability shields life coaches from claims of this nature and pays compensation if they become liable.
What does life coaching public liability insurance cover?
Suited public liability insurance is backed by an excellent insurer and a legal team provided by a specialised law firm should you encounter a situation with your client or a member of the public.
Cover includes:
Public liability protects you against legal accusations and compensation demands when either your client or a third party alleges that you have caused:
- accidental injury or death
- accidental property damage
For example:
Someone may claim compensation because during a session with you:
- You knocked over something valuable when visiting your client’s home
- You failed to warn them of a step, and they tripped and injured themselves
Other insurance life coaches buy
As a life coach, any additional insurance coverage you require will depend on your situation. Are you financially capable of replacing any lost, damaged or stolen computer equipment? Would you be able to handle a legal dispute if it arose? Would you be prepared to deal with a tax audit from HMRC?
Commercial legal expenses insurance
Most commercial legal expenses insurance will protect life coaches 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 you in dealing with these issues, and it’s part of your subscription.
Commercial Legal Expenses 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
Portable electronics insurance
In today's world, life coaches rely heavily on various electronic equipment to deliver their services effectively. If your business is also dependent on such equipment, it is crucial to consider taking portable electronics insurance to safeguard your valuable tools against any potential damage or loss.
This insurance policy can provide you with the much-needed protection and peace of mind to continue providing top-notch services to your clients without any interruptions.
Shopping for life coaching insurance
Whether or not you decide to use Suited life coach insurance to protect your business, it’s worth keeping the following in mind:
Cheap life coaching insurance
When getting life coaching insurance, don't just look at the cost. Good after-sales service matters too. Check if your provider is easy to reach. Suited offers multiple options and responds quickly.
The reputation of the insurer is important
When it comes to insurance, it's crucial to have a reliable insurer that will be there for you in times of need. The reputation of the insurer's payout is of utmost importance. Suited partners with financially stable insurers that hold an A+ rating.
Many providers charge fees to amend or cancel
Often, insurance providers may charge additional fees for amending or canceling policies, which may not be apparent at the outset. However, at Suited, we have a transparent policy with no hidden fees. You can cancel your policy at any time without incurring any further costs.
Some policy wordings are restrictive or have a high excess
Some providers will offer attractive prices, but it is at the expense of cover given. Suited professional indemnity and public liability have £0 excess.
