Insurance for Mental Health Counselors

Professional liability insurance—sometimes referred to as E&O Insurance—offers many potential benefits to mental health counselors, such as coverage for negligence, defense costs, personal injury (i.e., libel and slander), claims against past-rendered services, bodily injury and much more. While fraudulent acts and property damage are not covered by professional mental health counseling liability insurance, this form of insurance is essential for anyone who regularly provides a professional service or regularly advises clients, such as therapists.

• Protection even if you haven't made a mistake: A concerned parent hired a substance abuse counselor for her son who is having problems with drug and alcohol use. The treatments start and the son reports back to his parents that the treatment is working. It becomes apparent the son has continued his behavior when he is arrested again for a DUI. The parents are irate and sue the counselor for negligence. Professional liability insurance could protect you against claims of negligence even if you haven’t done anything wrong.
• Sexual misconduct: A client has been seeing a mental health counselor for years and begins to speak and act as if the relationship was more than therapy. The mental health counselor recognizes that this is happening and asks the patient to find a different counselor. The client sues for abandonment and claims the mental health counselor initiated the inappropriate relationship. Professional liability insurance protects the counselor against illegitimate claims.

When a client reacts negatively to treatment, accuses you of breaching confidentiality agreements, or otherwise feels that they've been damaged in some way by your services as a mental health counselor, the risk of being sued is constantly present. You can protect yourself by obtaining professional liability insurance—a key vehicle for providing peace of mind to small businesses.

In addition to times when mental health counselors can benefit from having professional liability insurance, there are many scenarios that are not covered under this type of policy. General liability insurance—also referred to as commercial general liability (CGL)—covers your therapy business against claims of bodily injury, any associated medical costs and property damage.

• Client's property damage: A mental health counselor is visiting a client’s home for a session and accidentally knocks over a tablet. The tablet shatters into pieces. The counselor’s general liability policy could cover the subsequent claim, up to the policy's limits of liability.
• Bodily injury: A substance abuse counselor rents office space in a medical office. A young patient becomes very upset during her counseling session and jumps up out of her chair, knocking it over and injuring herself. General liability insurance could protect the counselor against third-party claims for bodily injury and related medical costs.
• Personal injury: The receptionist of a mental health counselor is out for a meal. He talks to the owner of the restaurant about a client in a false and unflattering way. The client learns of this discussion and sues for slander. Hiscox may cover the subsequent claim, up to the limits of liability, and pay for an attorney if necessary.

Though your own property is not covered under general therapy liability insurance, damage sustained to a third-party property—including actions taken by your staff—will be covered. Learn more about general liability insurance costs to make a smart and forward-thinking decision for your business.

Mental health counselors, particularly those who see clients in an office, face-to-face, should consider a business owner’s policy, sometimes called a BOP.

A BOP includes general liability coverage for third-party claims of bodily injury or property damage, as well as coverage for your own business property.

Here’s an example of how a BOP could protect a mental health counselor. As a specialist in counseling families with a child with ADHD, a counselor often has young, very active children in their office. One day, a family is in the office, including a five-year-old child who is running around the office. The child runs into a bookcase, which falls over and lands on the child. The child is hurt, requiring medical attention, and several items that were on the bookshelf are broken.

The counselor’s BOP could cover the child’s medical costs as well as the cost to replace the insured’s items that were broken.

Since general liability coverage is included in a BOP, you don’t need both.

Mental health counselors may not think they are vulnerable to a cyber attack or data breach, but every business faces this risk.

Mental health counselors typically maintain a website and use email to communicate with customers, so threat actors may be able to gain access to their systems. This means their clients’ data, including personal health information and payment information, could be compromised.

Cyber security insurance can cover the costs associated with a data breach or cyber crime, including the cost to restore data and the cost to notify affected parties. A Hiscox cyber security insurance policy also includes tools to prevent an attack from happening in the first place, as well as expert breach response services to assist if an incident occurs.