Counselling insurance protects counselling businesses against unexpected business losses. There are a wide range of risks that can lead to these unexpected losses.
In some respects, counselling insurance is the same as the insurance that all other businesses need. Like all other businesses, for instance, counsellors face the risk of their business property being damaged or stolen. They face the risk of unexpected solicitors’ bills if legal action is taken against them. They face the risk of being unable to earn if they cannot work due to an injury or an illness.
However, because the counselling profession is unique, there are a few differences in the risks that counsellors face and this is why counsellors need a specific counselling insurance policy, and should not rely on a standard business insurance package.
What different risks do counsellors face?
All businesses come into contact with members of the public but because counselling is a people business, there’s a lot more contact with members of the public than there is with most businesses. As a result, the chance of a member of the public being injured or having their property damaged is increased and given this, there’s an increased chance that a compensation claim will be made against them.
Counselling is also about giving advice to people and, no matter how careful or qualified you are, there’s always a risk of giving bad advice. In the event that bad advice is given, it’s possible that a compensation claim can arise.
Liability insurance covers you in the event that a compensation claim is made against you because someone has been injured or had their property damaged as a result of something that you have done or failed to do. They may have injured themselves by tripping over your briefcase, for instance, or by slipping on a recently cleaned floor in your business premises.
Compensation claims can be expensive to settle. Some serious accidents can result in compensation awards of over £100,000, and the actual amount can be even higher once legal fees, lost wages and other associated expenses are taken into account.
Because counsellors see members of the public on a regular basis, it’s important to make sure that they have the best liability insurance possible. This should include a financial loss extension because standard liability insurance only covers compensation claims involving injuries or property damage. The financial loss extension extends the cover so you still insured if the accident leading to the compensation claim has only resulted in purely economic losses.
Standard liability insurance covers you if a compensation claim is made against you because something you have done or failed to do, but it doesn’t include compensation claims arising out of bad advice that you have given.
Malpractice insurance seeks to fill in this gap. A combination of public liability and professional indemnity insurance, malpractice covers claims made for bodily injury, mental and psychological damage from both physical procedures and advice, or a combination of the two.
Other types of insurance
As well as covering the specific risks that counsellors face, counselling insurance also covers the full range of standard risks that all businesses face.
This includes stock and equipment insurance, which covers your business property against losses due to accidental damage or theft. Stock and equipment includes your business contents, fixtures and fittings. It also includes business equipment such as computers and phones.
Legal expenses insurance is available as an optional extra. This covers you against unexpected legal bills if you become involved in legal action. This would include legal action due to contractual disputes, employee tribunals, tax/VAT inspections and criminal charges being brought against you.
You can also protect your income by extending your counselling insurance to include personal accident insurance. This pays a weekly amount if you cannot work because you’ve been injured or are ill. The insurance pays a lump sum if your injury or illness will prevent you from working permanently.