Therapy and Counseling Business Insurance
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Professional liability / medical malpractice insurance for therapists

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Medical malpractice insurance

Medical malpractice insurance provides healthcare professionals with financial protection from legal claims related to professional negligence and mistakes. It’s a form of medical professional liability insurance.

Professional liability insurance guards against the cost of errors

A simple mistake – such as a therapist misreading a client – can result in major legal consequences. If a client or relative files a lawsuit, your small practice could face a draining legal battle.

Professional liability insurance provides the protection your therapy or counseling practice needs to continue offering its services while resolving a legal matter. In the healthcare industry, you may see it called malpractice insurance.

This policy provides liability coverage related to:

  • Advice or guidance that caused harm
  • Accusations of negligence
  • Mistakes or oversights that harm a client
  • Additional risks, such as telemedicine
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What coverage can professional liability provide for therapists and counselors?

Advice or guidance that caused harm

An accusation of poor advice can have tremendous repercussions. For example, an occupational therapist could recommend that a client return to work before the client is ready. If that client is injured, the therapist could face a lawsuit.

Professional liability insurance can help cover attorney’s fees, settlements, judgments, and other legal costs if a client claims your therapy or counseling services caused harm.

Accusations of negligence

Speech therapists, faith-based counselors, and other therapy and counseling professionals are highly vulnerable to claims of negligence. For instance, a client battling addiction could claim that a counselor failed to prevent a relapse. If the client sues, professional liability insurance can cover the cost of hiring a lawyer and other legal expenses.

Mistakes or oversights

An allegation of a professional error – including a false accusation – could result in a costly malpractice lawsuit for a therapist or counselor.

Professional liability insurance can cover legal defense costs, settlements, and other expenses related to an alleged error or oversight.

Other specialized coverages

Professional liability insurance for mental health professionals can include additional types of coverage for unique risks, such as:

  • Professional license defense coverage
  • Biomedical defense coverage
  • HIPAA defense coverage
  • Sexual misconduct defense coverage
  • Telemedicine coverage

How much does professional liability insurance for therapy and counseling businesses cost?

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Most therapy and counseling businesses pay a median of about $40 per month for professional liability insurance, but you could pay more or less depending on your risks.

Insurance costs for counseling professionals are based on a few factors, including:

  • Therapy and counseling services offered, such as occupational therapy
  • Business equipment and property
  • Revenue
  • Location
  • Number of employees

Other important policies for therapists to consider

Professional liability insurance provides financial protection against accusations of errors and negligence, but it does not provide absolute protection. Accidental injuries and property damage are daily risks when you work with patients. Other policies to consider include:

General liability insurance: This policy can pay legal expenses related to client property damage and injuries, along with advertising injuries such as slander.

Business owner’s policy (BOP): This policy bundles general liability insurance with commercial property insurance at a lower rate than if the policies were purchased separately.

Workers’ compensation insurance: Workers’ comp can cover medical costs for work-related injuries. State laws usually require this coverage for small businesses with employees.

Cyber liability insurance: This policy covers financial losses from data breaches and cyberattacks. It's recommended for any small business that stores personal information.

Commercial auto insurance: This policy covers the cost of accidents involving a vehicle owned by your therapy practice. Most states require this coverage for vehicles owned by a business.

Get free quotes and buy online with Insureon

Are you ready to safeguard your therapy clinic or counseling business with professional liability insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.

Updated: September 21, 2022
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