5 Reasons Why Mental Health Professionals Need Malpractice Insurance
In the dynamic world of therapy where unexpected situations can arise, malpractice insurance plays a crucial role in protecting your practice.
Maria Lulo, Therapist Advocate
February 7, 2024
In the dynamic world of therapy, where unexpected situations can arise, professional liability insurance, often called malpractice insurance or errors and omissions coverage, plays a crucial role in protecting your practice. At Mentaya, we understand the complexities of insurance, so we're here to simplify it for you.
Having professional liability insurance for healthcare professionals is necessary to protect you and provide liability coverage for certain scenarios such as: lawsuits, board complaints, subpoenas, ethical consultations, and data breaches.
It provides a peace of mind and financial protection for all of these professional risks.
Our recommendation for malpractice insurance is: CPH because: quick & easy application online, superior customer support and access to free attorney consultations.
In this article we are going to take you through five potential scenarios that any mental health provider may encounter during the course of their career, and show you how your insurance coverage works to support you in each of these situations.
#1 Malpractice Lawsuits:
An adult client has died by suicide. The clientâ€™s family filed a lawsuit against allhealthcare facilities and professionals involved in the clientâ€™s careduring the time period prior to their death. You arethe person named in the suit as the therapist who most recently provided counseling services to the client.
Here's how your professional liability insurance will work to shield you from this lawsuit:
Legal Defense Coverage: Your insurance company policy will cover the costs associated with your legal defense, including attorney fees and court expenses.
Settlement and Damages Coverage: The policy will also extend coverage to potential settlements or damages that you might be required to pay.
The defense costs will not reduce the liability limits available for damages.
Carrying professional liability insurance not only safeguards you in times of crisis, but it also provides additional benefits including: access to experienced attorneys, professional services and financial protection.
#2 Board Complaints:
In the midst of a custody dispute between the parents of a minor client, Parent A has submitted a complaint to your state licensing board. The allegation suggests that you failed to provide records upon request and exhibited bias in favor of Parent B.
Board complaints are among the most common challenges faced by mental health providers. Here's where your insurance can come to help you navigate this situation:
Legal Defense Coverage: Malpractice insurance typically includes coverage for legal defense in state licensing board investigations and disciplinary hearings. This ensures that you have the necessary help to navigate through the complexities of the complaint.
Filing Claims for Board Defense Coverage: If you receive notice of a board complaint or investigation targeting your license, you have the option to file a claim on your insurance policy. This process activates the licensing board defense coverage, providing you with financial protection and legal representation.
Assigned Legal Representation: A qualified lawyer will be assigned to defend you before the licensing board. This legal professional will offer guidance and real-time support throughout the entire process, ensuring you receive excellent service at every step.
#3 Subpoena Assistance:
Your client, involved in an auto accident and pursuing legal action against their insurance company, has their lawyer issue a subpoena to you for your practice records.
Clients may be involved in a lawsuit where their mental health records are relevant to the case, so in practice it is not unusual for mental healthcare professionals to receive a subpoena to produce records or provide testimony at a deposition. Here's how professional liability insurance policies can provide valuable help:
Legal Guidance Coverage: Professional liability insurance typically includes coverage that pays for an attorney to provide you with advice on the information you should or should not disclose in response to a subpoena. This defense costs ensures that you navigate legal requests with clarity and within the bounds of professional and legal ethics.
Subpoena Assistance: In certain situations, the attorney provided by your insurance company can assist you in attempting to quash a subpoena. This proactive approach helps safeguard your clients' confidentiality and ensures that only legally necessary information is disclosed.
Advisory Support:The attorney assigned to handle your subpoena will guide you through the process, making sure you comply with legal requirements while protecting your professional integrity. Their expertise helps you provide the necessary information without compromising ethical standards.
#4 Attorney Consultation:
During session, an adult client disclosed that they were abusedby sexual misconduct as a minor. This raises the question: are you required to make a mandated report?
Professional liability insurance can be a valuable resource for mental healthcare providers and health professionals facing such ethical dilemmas. Here's how it can assist:
Legal Consultation: If you encounter a situation with a client that hasn't yet escalated to a formal claim but leaves you uncertain about the appropriate course of action, consulting with a lawyer is recommended. This benefit allows you to seek legal guidance to avoid potential missteps that could lead to a claim or complaint.
Guidance on Ethical Situations: Ethical challenges may encompass a range of areas, including questions about confidentiality, child abuse reporting requirements, patient access to records, dealing with dangerous patients, and other crucial topics for your practice. Consulting with a malpractice attorney can help you navigate these complex scenarios with a clear understanding of legal and ethical considerations.
#5 Cyber Liability:
A hacker has gained access to the server where you store electronic health records. You are unsure if any of your clients files were affected.
With cyber attacks becoming more prevalent, it is more important than ever to ensure that you are covered should you experience data breaches. Cyber liability coverage is specific data breach coverage that helps you when a third party gains unauthorized access to your electronic health records stored on a computer or server. Here are the next steps you would take:
Legal Consultation: contact your insurance company to understand the cyber liability insurance options available to you. This proactive step ensures that you are informed about the coverage you have in place.
File Claims: If you become aware of a data breach, promptly file a claim on your insurance policy to initiate the process of receiving assistance. This ensures that you can access the necessary help to navigate the aftermath of the cyber attack.
Forensic Investigation: Upon filing a claim, a forensic team will be engaged to investigate the breach thoroughly. Their role is to determine whether client files were affected and to assist you in notifying both clients and regulatory bodies of the breach. This professional investigative approach helps mitigate the impact of the breach and facilitates the necessary steps to address the situation.
The best professional liability insurance for mental health counselors:
Among the many things to do as you're building your practice, selecting the right liability insurance is one of the most important decisions. At Mentaya, we've done our research and helped source the leading provider of professional liability insurance for mental health professionals throughout the US: CPH Insurance.
Readers of this blog get a discount on your professional liability insurance by applying via this link https://cphins.com/mentaya.
What can you get with CPH? The standard policy with CPH includes professional liability insurance, licensing board defense, subpoena coverage, and 2 free hours of attorney consultation. With options to add cyber liability and general professional liability coverage. CPH offers competitive rates, excellent customer service, and a customer account with 24/7 access to download policy documents, make policy changes, pay, and file claims.
Here are 3 ways CPH makes insurance easy:
Direct Access to an Agent: if you have a question about coverage or the application, you can give them a direct call!
Electronic Application: You can apply directly through their website and receive your policy documents electronically.
Free Attorney consultations. You're not left in the dark once you have a policy. CPH offers two free hours of attorney consultations through their Avoiding Liability Helpline to discuss situations with clients that could potentially lead to a lawsuit.
What is professional liability insurance for counselors / psychotherapists?
Malpractice insurance isn't only for medical professionals. In these litigious times psychotherapists are encouraged to carry professional liability insurance (or malpractice insurance for therapist) to safeguard from a claim or lawsuit as well. If a client, their spouse, or parent/guardian files a complaint or lawsuit, malpractice insurance for counselors / psychotherapists provides unlimited defense coverage and state licensing board defense coverage to protect your job and assets.
Are telehealth services covered?
Yes, the professional liability policy with CPH covers telehealth services provided such services are being performed legally within the scope of your state license. You should confirm with your state licensing board and the licensing board of any state in which you may be providing professional services, that they are covered within your scope of practice.
What is the difference between occurrence and claims-made coverage?
Occurrence coverage: lifetime comprehensive coverage of malpractice claims for the policy period. If a claim or suit is brought against you, as long as you were insured at the time of the incident or treatment that resulted in the claim or suit, the cost of this policy will still apply to covered claim.
Claims-made policy: only covers claims that occur while the policy is in effect. It is recommended that you purchase "tail coverage" or an "extended reporting period" when you end a claims-made policy so that you can extend the amount of time during which you may report and pay a claim.
Do you offer general liability insurance?
Yes, CPH offers optional general liability insurance that can be added to a business or professional liability insurance policy. General liability insurance for business, also known as "slip and fall" insurance, provides coverage for bodily injury and property damage liability at your business premises.
What licenses and occupations do you cover?
CPH provides comprehensive insurance coverage for individuals in the healthcare industry such as therapists, mental health counselors, psychologists, social workers, case managers, and many more other professionals in healthcare industry! Check out the full list of professions they insure here.
What other services do you cover?
Coverage highlights: professional liability occurrence form, supplemental liability, state Licensing Board Defense Coverage, Unlimited Defense, Portable Coverage, Telehealth Coverage, Deposition Expense, Medical Expense, Assault Coverage, First Aid Coverage, Sexual Misconduct, Attorney Helpline.
Optional coverage: General Liability, Business Personal Property / Contents, Additional Insureds, Business Income & Extra Expense Coverage, Cyber Liability Coverage.
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