Do Coaches Need Liability Insurance?

Ben Dean, Ph.D.
CEO and Founder, MentorCoach

More than once, I have heard coaches argue that they do not need liability insurance.

Some reasons they have advanced have been that unlike therapists, coaches do not need liability coverage

*Because coaches work with high-functioning clients.

*Because–they contend–no coach anywhere has ever been sued by anyone.

At the American Psychological Association convention in Boston several years ago, I heard a former therapist, now a full-time coach, argue that liability insurance was unnecessary.

He said he had surrendered his license, no longer did therapy, and now worked exclusively with high-functioning clients. He did not feel the need for such protection and did not recommend it to other coaches.

I strongly disagree. Unlike most coaches and consultants, active clinician-coaches *do* have a license to protect, a license that we could theoretically lose.

Also, since anyone can sue anyone at anytime over anything, it is only a matter of time before someone somewhere sues a coach for some disappointment or conflict.

So I would highly recommend the conservative position of carrying a reasonable amount of liability insurance that covers your coaching practice.

This applies to non-clinician mental health professionals and–in my opinion–to wise professional coaches from all other discipline as well.

Are You Already Covered?

Does your current clinical liability insurance also cover you for coaching and other consulting services?

It may indeed. Check with your insurance carrier and see.

For example, the American Psychological Association Insurance Trust (APAIT) definitely covers psychologists for both clinical work and for coaching.

Your carrier may also. To find out, send your carrier a letter describing the coaching you are doing or considering doing and ask them to respond with a letter indicating whether coaching is covered.

If you are not satisfied with the answer you receive, do two things:

1. Write your professional association and encourage them to include coaching and other consulting services in their coverage.

2. Buy liability coverage elsewhere. Start with Or contact an insurance broker and get “errors and omissions” insurance.

How Much?

What is an “adequate” amount of insurance? I have been advised that a reasonable amount for an individual coach is the same $1,000,000 (per incident) to $3,000,000 (aggregate per year) that is typically recommended for a clinical practice.

In this issue, we’re talking about liability insurance alone, of course. While this may seem obvious, I’ll point out that we need *all* our insurance needs reviewed–including coverage for our business, employees, health, disability, life, etc.

Is Insurance Enough?

Adequate liability insurance is, of course, only a start.

In addition, we need to follow good sense in managing our practices.

This includes being deeply familiar with the spirit as well as the letter of our state and national professional association ethical guidelines.

It also involves getting training in legal, ethical, and risk management issues as they apply to coaching. This is especially true for those of us who work in the cutting edge areas of virtual coaching (coaching by phone with fax and E-mail backup) with a national/international clientele.

A Good Rule of Thumb

If you are ever in doubt–as in your clinical practice– consult with colleagues (experienced coaches, lawyers who are steeped in these issues, ethics experts in your state/national association.)

If your “gut” tells you there may be a problem… listen. There may *be* a problem. Use that cue to consult with others.

In the MentorCoach Program, for example, we offer training in ethics, legal, and risk management issues. We bring in guest experts on legal and ethical issues. And we refer our students to national experts in these areas whenever they have questions.

My Recommendation

It may be true that coaching high-functioning clients carries less risk than a clinical practice.

It may be true that virtually no coaches anywhere have ever been sued.

However, to be on safety’s side, I recommend that you pair highly ethical coaching practices with adequate liability insurance.

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