Every business needs insurance to protect it against any unexpected losses that may arise and counsellors are no different. Although you can adapt your working practices to reduce the chance of an unexpected loss arising and take steps to ensure that the damage is limited if the worst happens, it’s not possible to completely eliminate the risk of unexpected losses.
Many of these unexpected losses can be covered by standard business insurance policies. The risk of your business property being lost or damaged, for instance, can be covered by standard a property insurance policy. You can cover yourself against the risk of unexpected legal bills via a legal expenses insurance policy. You can protect your income with a personal accident insurance policy.
However, due to the unique nature of the counselling profession, counsellors face a slightly different set of risks. This is why counsellors should have counselling insurance that has been tailored to their specific needs rather than relying on a standard business insurance policy that may leave them with uninsured exposures.
How is counselling insurance different?
Counselling is a people business and counsellors come into contact with members of the public on a daily basis. Whenever you come into contact with a member of the public, there’s the risk that you’ll injure them or damage their property. If that happens, that member of the public could decide to make a compensation claim against you.
A standard business insurance policy will include public liability insurance which handles such compensation claims. However, because counsellors come into contact with members of the public on a much more regular basis than many other businesses, the public liability insurance in a counselling insurance policy has been tailored to provide an enhanced level of cover.
Additionally, counselling is also all about giving advice. Compensation claims arising due to advice that has been given are usually excluded from a standard business insurance policy. Counselling insurance usually includes malpractice insurance to cover such claims.
Financial loss insurance
Public liability insurance covers compensation claims that are made against you. It is a vital type of insurance for any business because compensation claims can be extremely expensive to settle. Fairly minor injuries such as broken bones can easily result in five-figure settlements, and it is not uncommon for more serious injuries such as spinal injuries to end up being settled at six-figure sums.
However, most standard public liability insurance only covers compensation claims involving injuries or property damage. Compensation claims that only involve purely economic losses are not covered.
This is a problem for counsellors because, due to the increased contact with members of the public, there’s an increased chance of a compensation claim being made against them. In turn, this means that there is an increased chance of a compensation claim for a purely economic loss being made against them. If the counsellor had a standard public liability insurance policy, such a claim would not be covered.
To address this issue, the public liability insurance in a counselling insurance policy should contain a financial loss extension. This cover extension plugs this gap in cover by providing cover for compensation claims where the loss is purely economic.
The counselling profession is all about giving advice and this creates the second problem for counsellors because standard public liability insurance policies exclude cover for compensation claims that arise out of defective advice that has been given. This means that many of the compensation claims that might be made against a counsellor would be uninsured.
However, counselling insurance usually includes malpractice insurance. This type of insurance covers compensation claims that arise from bodily injury, mental and psychological damage from both physical procedures and advice, or a combination of the two. This cover is a combination of public liability and professional indemnity to provide adequate cover for counsellors, without any gaps.