Picking a Professional Liability Insurance Provider
I really could have used some guidance when starting my mental health and career counseling practice and needed to pick a professional liability insurance carrier. I hope you find this post useful in making this decision.
Why do you need insurance?
You need professional liability insurance to protect yourself from malpractice claims, sexual misconduct claims, complaints to your licensing board, and other claims related to your work as a mental health professional. You may also want general liability insurance to cover property/personal injury to others in your building, and personal injury to clients.
NOTE: Forming a Limited Liability Company will NOT protect you from all of the above claims. You still need insurance even if you form an LLC. Don't believe anyone who tells you otherwise!
What level of coverage do you need?
I can't give you too much guidance on how much coverage you need - you need to figure that out based on your own needs. Most of the insurance carriers I looked at had one or two liability maximums. If you have a lot of assets to protect, consider getting the highest maximum. If you are a high net worth individual and don't already have umbrella insurance, consider looking into that, though be sure to find out if your umbrella insurance covers claims related to your counseling business. Some of the insurance carriers offered additional coverage for purchase that covered licensing board defense and/or sexual misconduct defense. Again, here it's up to you to consider your risk profile - do you engage in sex therapy or work with a particularly vulnerable population? Consider touching base with your licensing board or a lawyer versed in licensing board defense in your state; it's possible that upping your board defense coverage from $35,000/claim to $75,000/claim will make no impact if most board investigations only take a few hours and don't usually involve a lawyer.
Are you a person or a person and a corporation?
Your insurance needs will vary not just on your coverage needs but on your business structure. Most insurance carriers offer discounts for part time work (generally under 20 hours per week) and for recent graduates. If you created a corporate structure for your counseling business, even if it's a sole-member LLC, and you want to insure that corporation, you won't qualify for part-time or recent graduate discounts.
But why do I need to insure my sole-member LLC separately if it's just me? Doesn't the LLC protect me? Those are great questions, and I tried to get some answers from lawyers, accountants, and insurance companies. If you have a sole-member LLC, which for all intents and purposes the IRS sees as a "non-entity," in that is it's no different from you as a person, insurance companies still suggest you insure that business because, they state, someone could sue you and your LLC, and if the LLC wasn't insured you could be personally liable for damages. As for the second question, which I'll get into more in another post, no, your sole-member LLC will probably not protect you and your personal assets in some cases, like negligence.
Bottom line: insure your business as well as yourself. Or just don't create a separate business entity! There's no shame in being a sole proprietorship with your own name on it.
What options are available?
While looking for insurance for myself, I found three insurance companies that appear to target mental health professionals as their customers. They were HPSO, CPH, and APA. I got quotes from all of these companies, doing my best to control the coverage values and other variables. I am not endorsing one company over another - I know professionals who use all of these companies and are quite happy with them. I also got quotes from an insurance broker and from some general insurance companies directly.
HPSO
Healthcare Providers Service Organization, or HPSO, provides professional liability insurance for mental health professionals. They also appear to have a partnership with the ACA (American Counseling Association), in that during your student internship you can get insurance through them for just the cost of an ACA membership. However, once you graduate, despite that ACA "endorsement," the entity who benefits the most from that connection is HPSO themselves. Many counselors assume that the connection to the ACA means that they will get the best deal from HPSO - I found that not to be the case for me.
HPSO had the highest quote of the three mental health-specific insurance companies. Their quote also did not include slip-and-fall general liability insurance - that would have cost extra. They did, however, offer discounts for part-time work and recent graduates, but as I had formed an LLC, this didn't help. My impression of their customer service was that it was automated and not super personable.
American Professional Agency
American Professional Agency, or APA, provides professional liability insurance, and offered the lowest quote that I could find - about 1/6th the cost of HPSO. They also have a PDF on their website that just lists all of the coverage options and the associated costs, which makes comparison easy. That said, it appeared to me that one could not get slip-and-fall general liability insurance through them as well. When I called to try to clarify what coverage they offered, and whether there was different coverage for individual professionals vs a corporate entity, they were fairly brusque with me and I was unable to get clear answers. What's even weirder is that a colleague got insurance from them and says her coverage definitely covers slip-and-fall.
Despite the lack of clarity over general liability and corporate entities, APA seems like a great choice if you are just starting out, maybe sharing an office with someone, or otherwise aren't seeing clients full time in your own practice. Also, if you work at a clinic that requires you carry your own professional liability insurance, this could be a low-cost option.
CPH & Associates
CPH & Associates, sometimes just called CPH or CPH Ins, is another provider of professional liability insurance. Their quote was about 3/5 of the cost of HPSO's quote, although adding the slip-and-fall general liability coverage brought it in line with HPSO's, except HPSO's didn't include slip-and-fall. My impression of their customer service was that they were friendly and very agreeable, especially when I kept adjusting my quote to be able to better compare to the other options. They also offered discounts for new professionals, but like HPSO, recommended that I get coverage that included my LLC corporate entity.
I ended up choosing CPH, and am pretty happy with my choice. They send out a newsletter that contains information I consider to be valuable. They cover issues like limiting your liability and practicing ethically, but the real value is in the webinars on topics like building a cash pay private practice.
Note: since I didn't end up using the other insurance companies, there's a possibility they also have useful newsletters - I just don't know.
Other Options
In the insurance industry, most smaller carriers are actually passing on their liability to another, larger, insurance company. Such companies are ones like Hiscox, Hartford, and a few others. I tried getting quotes directly from these companies, from my own local insurance broker, and from a few insurance quote websites. I obtained quotes for both professional liability insurance and for slip-and-fall general liability (to make up for American Professional Agency saying they didn't cover it). The results were really weird - general liability alone was about the cost of my entire CPH quote that included general liability, and professional liability insurance plus general liability was exactly twice the cost of CPH's quote - whew! The numbers I got from these different non-mental health-specific insurance carriers were so weirdly aligned with themselves and with multiples of themselves I suspect they're all just using the same bigger insurance company.
Pick Something!
If you're just getting started, don't let this decision hold up your process for too long! If/when your needs change you can always switch insurance carriers at a later date. If you've been using one carrier for a while and feel like you're paying too much, check out some of the other options and see if they might work for you.