It can be tempting to think that you don’t need insurance to be a counsellor, particularly if you’re a sole trader and you provide your counselling services at your clients’ premises and don’t have your own premises.
However, like all other businesses, counsellors face risks that leave them exposed to potential losses and they need to protect themselves. The most important type of insurance for counsellors is public liability insurance, but there are other types of insurance that a counsellor should consider.
This type of insurance protects you if someone makes a compensation claim against you. It pays any compensation awarded as well as paying any associated costs and expenses. It also pays any legal fees which have been incurred and your liability insurer will help defend any claims that are made against you.
Employer’s liability insurance covers compensation claims made against you by your employees. You don’t need it if you’re a sole trader, but if you employ anyone you’re legally required to have it, even if the people you employ are only employed on a temporary or casual basis.
Public liability insurance is similar, but it covers compensation claims made against you by third parties. You’re not legally required to have public liability insurance, but as some compensation claims can cost in excess of £250,000 to settle, it would be unwise to consider this type of insurance optional. Also, you may be required to have public liability insurance as a condition of your membership of a professional body.
Standard public liability insurance covers many of the compensation claims that might be made against a counsellor, but due to the nature of the counselling profession, there are some policy extensions that are required to ensure that the insurance policy fully protects you. These are:
- The financial loss cover extension
- Medical malpractice cover
Financial loss cover
A standard public liability insurance policy covers compensation claims if someone has been injured or if their property has been damaged. However, it does not cover compensation claims where the only loss is a purely economic loss.
A financial loss cover extension addresses this issue because it extends the insurance to provide cover for compensation claims involving purely economic losses.
Another problem with standard public liability insurance policies is that they do not cover compensation claims which arise as a result of professional activities. Malpractice cover deals with such claims to ensure that the counsellor is fully protected.
Personal accident & sickness insurance
If you can’t work because you are ill or your have been injured, you cannot earn and potentially, this means that you would not be able to cover your monthly outgoings. Personal accident and sickness insurance covers your income if you find yourself in this situation so you can concentrate on your recovery rather than worrying about your personal finances.
A weekly benefit is paid while you are off work. If you will be off work permanently, a lump sum is paid instead. A lump sum is also payable in the event of certain injuries such as the loss of an eye or a limb. The lump sum is also payable if you die.
Legal expenses insurance
Legal expenses insurance covers your legal costs if you become involved in legal action. This is important because legal bills can rapidly mount up. As well as covering your legal costs, your legal expenses insurer will also help you handle any legal action.
A range of different types of legal action are covered, including:
- Contractual disputes
- Disputes with neighbours
- Employment tribunals
- Criminal charges being brought against you
- Tax or VAT inspections
Although if you’re working at your clients’ premises, you might think you don’t have much business property to insure, it’s worth working out its value and considering whether you need property insurance to protect yourself in case your business property is accidentally damaged or stolen.