Insurance for psychologists

Professional liability insurance—sometimes referred to as E&O Insurance—offers a number of potential benefits to practitioners, including coverage against alleged or actual negligence, bodily injury, defense costs, personal injury (i.e., libel and slander), claims arising from past-rendered services and more. While fraudulent acts and property damage are not covered by professional liability, this form of insurance is essential for anyone who provides a professional service or regularly advises clients, such as psychologists. 

• Sexual misconduct: A client has been seeing you as their psychologist for years and starts speaking and acting as if the relationship is more than just therapy. Then, you recognize that this is happening and ask that the patient find a different therapist. The client sues for abandonment and claims that you initiated the inappropriate relationship. Professional liability insurance could protect you against claims of negligence even if you haven’t done anything wrong.

• Negligence: Your services were requested by a quarreling family. The father is short-tempered and abusive, and the teenage daughter is volatile and rebellious.  You are working on their communication issues. After several sessions with you, the daughter runs away from home and the father says that you are to blame. He wants his money back and he is also suing for damages. Professional liability insurance could protect you if such a claim is made.

Should a client react negatively to treatment, accuse you of breaching confidentiality agreements or otherwise feel that they've been damaged in some way by your services, the risk of being sued is present. The solution can be found in professional liability insurance—a crucial tool for providing peace of mind and stability for licensed psychologists.

In addition to the many instances in which psychologists can benefit from having professional liability insurance, there are a number of scenarios that aren't covered under this type of policy. General liability, also commonly referred to as commercial general liability (CGL), covers your business against claims of bodily injury, any associated medical costs and property damage. 

• Bodily injury: A client sits back in an office chair too far and loses her balance. She falls to the tile floor causing herself an injury. General liability insurance could protect you against third-party claims for bodily injury and related medical costs.

• Personal injury: One of your employees is at lunch. He talks to the owner of the shop about one of your clients in a false and unflattering way. The client learns of this discussion and sues for slander. We will cover the subsequent claim, up to your limits of liability, and pay for an attorney to defend you if necessary.

• Property damage: While you are in a client’s home, you trip and tear an expensive painting. We may cover the cost to replace the painting, up to the limits of your liability.

Though your own property is not covered under general liability insurance, damage sustained to a third-party property—including via actions taken by your staff—will be covered. Learn more about general liability insurance costs for your business.