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Top 4 Providers of Malpractice Insurance for Psychologists and Counselors

As practitioners of the mind, psychologists work with patients to sort out a number of mental and emotional challenges. The main treatment for those who visit a psychologist is ‘talk therapy’ in which a patient tries to track down the origins of their unwanted habits, feelings, and points of view. Psychologists usually see patients with behavioral disorders, anxiety, depression, and learning issues. They are also prominent in the marriage counseling and family counseling trades. 

All of these areas are fraught with conflicted patients whose problems can sometimes become your problems, especially if you make a mistake or become emotionally entangled with a client. This is why it’s vital for you to carry malpractice insurance for psychologists. Thankfully, this insurance is widely available and there are many insurers dedicated to covering these medical professionals.

What is Malpractice Insurance for Psychologists?

Malpractice insurance for psychologists is essentially a type of professional liability insurance that protects you against claims of poor care or neglect. These claims can come from a patient or a patient’s family members. Not all is doom and gloom though. According to the American Psychological Association (APA) only 2% of psychologists will be sued over the course of their careers. 

It is simply important to carry malpractice insurance in case you need it. A good malpractice insurer can also help you in a number of other ways, including:

  • Intervention before a lawsuit by acting as mediators/sending notices
  • Paying for defense in a court trial
  • Paying for defense during a state licensing board review
  • Potential payment for income lost on court days
  • Protection from sexual misconduct, advertising liability, and personal injury claims
  • Protection for services provided as part of an organization or committee
  • Optional general liability insurance for injuries that occur at the office

Who Else Needs Malpractice Insurance?

There are other industries where malpractice insurance is a good idea for practitioners. Most people are familiar with medical malpractice insurance for doctors, such as internists, surgeons, and obstetricians or nursing malpractice insurance for nurses from registered nurse, to nurse practitioner, or nursing students. But, other medical and care providers who deal with mental and emotional problems should also consider coverage. Many insurers for psychologists can also help with:

  • Malpractice insurance for therapists
  • Malpractice insurance for counselors
  • Malpractice insurance for psychiatrists

Is Malpractice Insurance for Psychologists Different From Malpractice Insurance for Counselors? And Why?

You may be wondering if it is a better idea to get malpractice insurance for counselors over malpractice insurance for psychologists. While these two areas are slightly different, the position of counselor can overlap with that of a psychologist. The term counselor isn’t protected and doesn’t require licensing in most places. Many kinds of professionals can also provide counseling services, such as social workers, pastors, and psychologists. 

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When it comes to obtaining insurance, it may be better to get malpractice insurance for psychologists if you are a state licensed psychologist. Insurers dedicated to this particular branch of mental health can provide targeted legal advice for the risks that come with practicing psychology. 

If you are a counselor with a different degree or certification, it may be better to get malpractice insurance for your specific field. General counselors or those who have unique certifications can still find malpractice insurance for counselors through a few insurance companies:

  • American Professional Agency, Inc: Provides insurance coverage to psychologists, addiction counselors, clergy counselors, bodywork counselors, rehabilitation counselors, and mental health counselors.
  • CPH & Associates: This insurer also covers psychologists and a wide range of counselors in drug and alcohol, nutrition, wellness, mental health, and educational fields.
  • Hiscox Insurance Company, Inc: An international insurance company, Hiscox provides coverage for psychologists, and for counselors in the mental health, substance abuse, and credit repair industries.
  • Lockton Affinity: Another option to consider is Lockton, which offers professional liability insurance for counselors and therapists, among many other branches of healthcare malpractice insurance.

When Do Psychologists Need Malpractice Insurance?

All practicing psychologists need professional liability insurance to protect against claims. You may also need liability insurance as a graduate student and post-graduate in training. Students do provide supervised care for patients and can be at risk for a malpractice lawsuit. At this level, you will likely be covered by the school’s liability insurance or the group insurance policy at the practice where you are receiving training. However, these policies may only cover settlements or might not have a high limit. Additional malpractice insurance for students and graduate students can help cover the gaps.

If you are a professional psychologist who is employed at a larger practice, hospital, or organization, you are also likely covered by your employer. However, the same concerns may be valid for you too. Always check with your human resources department to see if you are covered under their policy and how much coverage is available.

>>MORE: Best Professional Liability Insurance Companies for Small Businesses

How Much Does Medical Malpractice Insurance for Psychologists Cost?

The premiums for malpractice insurance for psychologists tend to be very affordable compared to those for medical doctors. According to Good Therapy, the average cost of annual premiums for therapists is between $350 to $1,750. Your premium rate will depend on a few factors, including:

  • Whether or not you see high-risk patients
  • Your desired policy limit
  • How long you’ve been practicing
  • Your previous claims history
  • The state where you live and work

Where to Find Medical Malpractice Insurance for Psychologists?

As there are about 106,000 licensed psychologists in the United States (APA), there is plenty of demand for malpractice insurance. You’ll find that there are lots of insurance companies offering this kind of policy for therapists.

The Trust – Insurance for Every Stage of Your Career

Established by a group of psychologists in 1962, The Trust is one of the most recognized providers of insurance for those in the mental health industry. They provide a range of insurance policies for practicing psychologists, post-graduates, and graduate students. You can check out their rate tables for claims-made policies and occurrence policies online. 

A quick look at a claims-made policy for a psychologist in Ohio with a $1/$3 million limit for the first year of coverage shows an annual premium of about $171. After five years, that policy premium rises to $743. The same psychologist getting an occurrence policy would pay $1,215 per year with effectively no rate increases. For a more exact premium quote, you can contact the company directly by phone or you can also fill out their application online.

American Professional Agency, Inc. – Largest Underwriter in the Country

First established in 1940, American Professional Agency, Inc. is an insurance brokerage with a special focus on serving those in the mental health industry. With approximately 100,000 policy holders, they are also the largest underwriter of professional liability policies for mental healthcare providers. 

American Professional Agency, Inc. also makes their general rates tables available online. A claims-made policy for a psychologist in Ohio with a $1/$3 million limit has an annual premium of $184 for the first year of coverage. By the fifth year, the annual premium is $798

CPH & Associates – Support and Customer Service

An insurance company that offers coverage to providers in a range of health and wellness industries, CPH & Associates is focused on great customer service. You can apply online and get your insurance documents electronically. They also have online contact forms and two contact numbers, one of which is a toll-free number. CPH also provides two free hours of consultations with an attorney via their Avoiding Liability Helpline.

Site visitors can click the ‘Get a Quote & Apply’ button on the homepage under ‘Allied & Mental Health Malpractice Insurance’ to start a rate quote. An Ohio-based psychologist with a Masters Degree working more than 20 hours a week can get a policy with $1/$3 million limit and an annual premium of $525. There are also additional options for discounts to lower the premium, 

Hiscox Insurance Company, Inc. – Wide Range of Policy Coverages

Since 1901, Hiscox Insurance Company, Inc. has been providing business insurance to professionals in a range of industries. They offer general liability, professional liability, and property insurance with a number of additional coverages, in case you might need it. These can include cyber liability, crime and theft, and even kidnapping & ransom coverage for individuals and organisations around the world.

You could potentially pull a quote from online, but the server kept producing an error code at the time of writing. They also offer a toll-free number to speak with an insurance agent.

>>MORE: Top 5 Providers of Optometry Malpractice Insurance

Final Thoughts:

  • Psychologists treat mental health and behavioral disorders, such as anxiety and depression. They may also provide marriage counseling and family therapy.
  • Malpractice insurance can protect psychologists against the expenses associated with lawsuits and damages claims.
  • There are many insurance companies offering malpractice insurance for psychologists, including Hiscox, CPH & Associates, American Professional Agency, and The Trust.
  • Graduate students and post-graduate students may also want to obtain malpractice insurance for additional coverage if they are working with patients.
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