Why You Need Counselor Liability Insurance

counselor liability insurance

The Importance of Counselor Liability Insurance

If you are delivering psychotherapy, you need counselor liability insurance. Regardless of whether you are student or associate level LPC LCSW or LMFT, you need malpractice insurance. In many cases, organizations will require it.

Counselors get sued. Broadly speaking, we are sued for some form of perceived ethical misconduct that caused damage. Clients view us as expert professionals. They put their care in our hands. Sometimes they believe they have been harmed. 

They could also file an ethics complaint to the licensing board. While not directly related to a civil suit, a licensing board can use evidence collected with the civil suit in making decisions about the alleged ethics violation. It is important to understand this because your career can often survive a lawsuit, but a license suspension or revocation could prevent you from practicing. 

We can be sued by other therapists. Even friends could file a civil suit against us for incorrectly believing our conversations with them constitute psychotherapy. 

Some professional entities require we carry malpractice insurance. Most if not all, third party payers (HMO's, Medicaid and other federal government programs, numerous others) require we provide proof of malpractice insurance every few years.  

For associate professional counselors, peers supervising us toward licensing often require proof of counselor liability insurance. As an experienced clinical supervisor of LPCs, my aim is to make your supervision proceed as smoothly as possible. Part of that is that both of us carry malpractice insurance.

Graduate school counseling programs require internship students to carry liability insurance.   

PRO Tip: Expert Peer Consultation and Disclaimer

This post is in no manner intended to be legal advice. Consult your attorney. I have made formal judgements on over 200 Georgia Board licensing complaints and  provide expert peer consultation. I can assist you with many issues related to Social Work or LPC ethics complaints in Georgia. I can also help you sort out when you have a dilemma related to your board issued license and alert you to how it could result in a lawsuit and make attorney referrals.

Commonly Used Professional Counselor Liability Insurance Companies

Georgia mental health professionals frequently use CPH and Associates, HPSO and American Professional Agency. Some of these are insurance brokers. If you prefer, jump down the page directly to the remainder of this article for additional info on these LPC malpractice insurance companies and how to choose.

What is counselor malpractice/ insurance?

Counselor liability insurance covers our professional work. As long as it is through the course of practice, it is intended to protect us financially and professionally if we are sued.

It usually does not cover general liability insurance unless we purchase it separately. For example, if a client is physically injured in our office due to a fall it is not considered malpractice. General liability insurance is informally referred to as 'slip and fall' coverage. Your office landlord may require you carry it. 

Many policies' benefits include legal representation. In other words, we may not have to pay out-of-pocket for legal defense because the insurance covers it. However, there are limitations to that coverage.

Who needs malpractice coverage. 

Everyone who is doing some form of professional counseling or psychotherapy should carry professional liability insurance. As mentioned above, sometimes it is required anyway. 

As it applies to the counseling profession this would include psychologists, social workers. marriage and family therapists and professional counselors OR anyone including graduate students in pursuit of a state license to provide emotional treatment and mental help.

Why LPCs, LCSW, Psychologists and MFTs are sued.

The reasons therapists must defend themselves in a civil suit are numerous. The most obvious are sexual boundary crossings with clients and other gross ethical misconduct. Here are some of the less obvious reasons you should know about: 

Client Abandonment

A client feeling abandoned usually results from a therapist's struggles with setting boundaries and insufficient termination of care. You can never get enough continuing education in boundaries ethics. --just when we think we have every blind spot covered, another one develops. 

It is the therapist' responsibility to manage the counseling relationship. We must be sure this relationship does not stray from our sole responsibility of treating their emotional and mental struggles. Clients may unwittingly attempt to move the counseling relationship into one of friendship. When the relationship begins to resemble a friendship, we are headed for trouble. 

Boundary crossings can developing gradually and in a subtle manner. A healthy counseling relationship will minimize the chances that a client will feel jilted or abandoned and file a civil suit against you. Personal psychotherapy and ethics and boundaries training will help you maintain healthy client relationships. 

Breaches of Confidentiality

Breaches of psychotherapy confidentiality are a violation of the law. A breach is also an ethics violation under the Georgia Composite Board's Code of Ethics. In fact, most states' ethics and professional association codes of ethics address confidentiality breaches.

However, there are types of violations of patient confidentiality that are more likely to result in either a licensing board ethics complaint or lawsuit.

1) Sharing content of sessions with a third party one would reasonably expect the client would object.
2) Sharing client records or information that could cause direct emotional harm.
3) Sharing information that could be used against a client or otherwise weaken their position in a separate legal situation. For example, obtaining public benefits or financial settlement.
4) When spouses are engaged in divorce proceedings, sharing information about either's mental health treatment without consent.

Georgia Does Not Have a Duty to Warn/Protect Law.

Georgia Code § 24-5-501, "Privileges" limits communications between us and our patients as evidence admissible in legal proceedings, however there are exceptions to these communications that have been established through Georgia case law (for example, Bradley Center v Wessner ). In addition, there is no Georgia law mandating a duty to protect with immunity. Same for psychologists: duty to warn and protect is in our codes of ethics, but not in law. 

So we have a right, but no immunity, and are required by our licensing boards codes of ethics to warn and protect. This poses a dilemma for therapists. 

These are general clinical guidelines. Note this is in no manner legal advice, but simply effective proactive measures to help you practice responsibly and ethically and minimize risk: 

1) Greater risk is posed for therapists in independent practice settings especially when there are no medical staff on site. Coordinate your care with the patient's psychiatrist whenever possible.

2) Be trained in properly executing a 1013 / 2013. 

3) In my ethics workshops I teach a concept, "redundancy".  It refers to having backup systems in place for all of your clinical work. Don't treat a patient with severe mental conditions in isolation. Involve the psychiatrist, other treating clinicians and relevant family.

Ethical Use of Georgia Form 1013 /2013, Order For Involuntary Evaluation

As of 4/21/2014, Georgia LPCs can legally sign 1013 / 2013 forms. The amended SB 65 was signed into law by governor Nathan Deal. It is formally named, "Certificate Authorizing Transport To Emergency Receiving Facility". For your convenience you can download this form-fillable Georgia 1013 form.

Georgia law now allows LPCs to sign a 1013 form "on the basis of a mental disorder and substantial risk of imminent harm to self or others".

The law also allows lpcs to sign the 2013 form "on the basis of substance use disorder and substantial risk of imminent harm to self or others". 

With this right comes a great responsibility and legal vulnerability.

1) You are arguably most vulnerable if you work in an independent practice setting and many of your clients have severe mental illness and addiction. Essentially, there is a gap in service in this setting. Stay in contact with your clients psychiatrist. If you are in a private independent practice office, consult with a 1013 experienced peer.

2) If you have a physician or psychiatrist at your job, you can ask them to sign the 1013. It is routine work for a psychiatrist. You can also complete the form, have the physician review and sign it. Here are instructions on how do I complete the Georgia 1013 form.

3) Always consider that if you are accused of malpractice, you should be confident that you acted within a standard of care and within your scope of practice. Understand there is general misconception and attitude that since masters level therapists are not doctors, their qualifications are limited despite the fact that Georgia LPC's can legally diagnose mental disorders. 

Counseling Beyond Your Scope of Practice

A central theme with my APCs in supervision toward license is to "stay in your lane."  This means practice in areas where you are trained and experienced. If you want to expand your practice to another specialty, get trained in it first. Attorneys use an expression regarding safe legal practice: "if you want to be sued, be a generalist".

If you keep your practice simple, you will have fewer complications and less stress and worries. Be confident in what you know, but understand your limitations.

For example, treating eating disorders is highly specialized. There are factors known only to experienced eating disorder therapists such as dietary concerns and that symptoms can rapidly escalate. Suicide rates among eating disorders are among the highest of all mental disorders.

Eating disorders are observed disproportionately in females. They are frequently young females. 

What if you are providing treatment to a female minor with an eating disorder, don't specialize with this population, and they die by suicide? Be prepared for the possibility of needing to defend A LOT in court or licensing board ethics complaint. 

Keep your practice simple and stay in your lane. 

Inadequate Informed Consent

In short, informed consent in psychotherapy means your client knows the treatment they are receiving and have agreed to it. For example, if you are treating a patient using EMDR (eye movement desensitization and reprocessing), you should inform them in writing they will likely experience distress after the session.

Physicians are sued because they did not thoroughly inform their patients of potential consequences of their treatment. You should do the same. 

PRO Tip: Maintain a Relationship With an Attorney

It is wise to find an attorney when you become licensed even if you don't need their services at that moment. It is best to get a referral from another therapist. Your attorney can also represent or refer you to one who can assist in incorporating, reading or helping you develop contracts and agreements and assist with other small business matters.

Child Custody Issues

Counselors involved in divorce proceedings while treating a minor child are often sued. A common scenario is when the judge' decree regarding child custody is not in favor of one of the spouses. That spouse upset about the outcome, sues the therapist because notes in the child's treatment records suggest questionable fitness to parent. 

Inadequate Documentation

Therapists can be sued when damage arises from poor documentation. For example, not documenting information that proves you acted in a clinically responsible manner. Not documenting:

1) referrals you have made for other treatment services
2) assessment of suicidality and interventions
3) client's refusal to seek help for addiction
4) other

Incompetence

The public isn't necessarily entitled to quality (though they should receive it). The public is however entitled to competence. 

Incompetence is in every profession, but it is especially serious when one is issued a license to practice a healthcare profession. None of us can understand how to treat every condition. Don't advertise you can treat every mental illness from A to Z and that you work with children, adolescents, adults, couples and families if you don't have that education training and experience. It is guaranteed you will be incompetent in at least one of those specialties and are therefore inviting a civil suit.

Civil Suits and State Licensing Boards

Whereas, Georgia's Composite Board of Professional Counselors, Social Workers and Marriage and Family Therapists does not explicitly require we have liability / malpractice insurance, we must report all lawsuits to the Georgia board. The board usually requires you to provide an explanation of the civil action.

A licensing board action often depends upon the nature of the reported lawsuit. In other words, a board will view differently if it was a frivolous suit that was dismissed by a judge versus a large financial judgement in the favor of the client in a sexual misconduct allegation.

How Counselor Liability Insurance Protects You

Basic counselor malpractice liability insurance primarily covers incidents arising directly from the profession your policy covers e.g. professional counseling. Essentially, malpractice insurance protects you against events arising between you and your clients that are related to your treatment of their mental condition.

Many carriers provide supplemental coverage for property damage and personal injury, but it must be as a direct result from professional practice. So this usually excludes civil action from business disputes, actions as a business owner or employer and actions taken by your managed care panels. You can purchase the amount of coverage you need. Malpractice insurance carriers offer other types of coverage usually at an additional cost.

Insurance coverage you should consider purchasing that is not related to practice includes office liability and  fire and casualty. 

How Do I Choose Which Counselor Malpractice Carrier is Best For Me?

The "best" is what is best for you. Therapists needs differ. Different work settings and arrangements. Different clinical work. The following carriers are among the most commonly used in Georgia.

Perhaps the majority of professional counselors in Georgia use CPH and Associates. This is partly due to the discount offered if you are a member of the state professional association, LPCA of GA. CPH and associates offers coverage for part and full time self employed counselors, counselors working as agency employees, graduate interns and post masters in supervision towards full LPC license. Contact them for a policy quote at 800-875-1911. 

HPSO Professional Liability Insurance

HPSO malpractice insurance for counselors provides complimentary coverage to students who are members of ACA (American Counseling Association). They also provide coverage for assault. They can be contacted at 800-982-9491

American Professional Agency, Inc (APA)

American Professional Agency provides coverage for school counselors, employed counselors, self employed counselors, certified hypnotists, and bachelors in mental health. They can be contacted for a rate quote at 800-421-6694.

Summary

There are many other areas of counselor liability I have not addressed here including vicarious liability, liability arising from dual relationships and boundary violations. I have also not discussed risk of vicarious liability for LPC supervision / supervisors. I will expand on these in a future article.