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A Deep Dive Into Business Owners Policy Exclusions to Avoid Surprises
January 27, 2025
| January 13, 2025
Author: KimberleeEdited by: Kimberlee and Reviewed: Kimberlee
Counselors are service providers who work with a certain amount of risk. Clients can accuse counselors of not performing their duties professionally and take action against them. Without professional liability insurance, counselors are left to deal with these incidents out of their own pocket. Insurance mitigates costs, and the insurance company even provides legal counsel for the counselor’s defense.
Professional liability insurance, unlike general liability insurance, handles claims directly related to the service a professional provides. It protects the professional from claims arising from negligence, confidentiality breaches, misdiagnosis, ethical complaints, and client harm. Essentially, it handles claims that state the counselor didn’t do their job as reasonably expected in a professional manner.
This policy complements a general liability policy, which covers third-party injuries or damages resulting from business operations (not professional conduct). A professional liability policy does not cover general liability claims or workers’ compensation claims.
Depending on state licensing laws and regulations, many counselors may be required to get professional liability insurance to practice. However, this policy is important for more than just the legal requirements. It safeguards a counselor’s finances so that the insurance company pays claims rather than the counselor.
Let’s look at some common risks counselors face as professionals.
Negligence and misconduct are serious allegations for a counselor that suggest the counselor is not performing according to professional standards. An example would be that the counselor ignored a critical piece of information that was important to a diagnosis. This could lead to the wrong treatment or medication suggestion.
Counselors have an obligation to keep information confidential. This means not talking about clients’ situations and keeping records in a safe and secure place. Failing to do so can lead to breaches of confidentiality, which can be a serious problem for the counselor.
Counselors are trained to diagnose different types of conditions. A misdiagnosis can lead to improper treatment, potentially harming the client. Because mistakes do happen, professional liability insurance is there to protect the counselor’s assets.
If a client does not feel that a counselor is acting in a legal or ethical fashion, they can raise a complaint. Keep in mind that professional liability insurance will not pay claims for illegal actions. This means some complaints must be handled by independent attorneys on behalf of the client.
While a counselor cannot prevent all situations of client harm or suicide, he should be able to have an inkling of its possibility with certain clients. This means that they should implement treatment plans to counter this. If treatment plans don’t work, the client or their family may bring a lawsuit against the counselor. This would be covered by professional liability insurance.
Here are some benefits of having a professional liability insurance policy.
Professional liability insurance pays the costs of claims, including legal fees. This means that the counselor’s personal and professional assets are protected. Claims can be tens of thousands of dollars or more, and this would be a financial strain for any counselor without insurance.
Having a professional liability policy tells your clients that you care about doing a good job and are professional enough to implement protections to ensure clients are cared for properly.
Getting a professional liability insurance policy may be required for state licensing purposes. Check with your licensing agency to see how much insurance is required in your location.
Having a professional liability insurance policy gives counselors peace of mind that their practice is protected from honest errors and omissions. It also means that they will have the tools to handle claims and unexpected incidents.
When getting professional liability insurance, you want to evaluate your needs. This starts with understanding state licensing requirements and assessing what your practice needs. Shop policies around with various insurance providers. From there, work with your agent to tailor coverage to meet your specific counseling practice needs.
Getting professional liability insurance is one step in becoming a true professional in your field. While it is required by most states for licensing, it goes a long way to showing clients that you care about their results and are dedicated to running a professional practice. Find the best professional liability insurance companies in our guide.
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January 27, 2025
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