Professional indemnity insurance

Having insurance in place means that, in the event of a complaint or legal action, you receive some form of protection from being personally liable and/or legal assistance if faced with disciplinary or complaints proceedings.

The UKCP Code of Ethics and Professional Practice (38) requires registrants to: ‘Ensure that your professional work is adequately covered by appropriate indemnity insurance or by your employer’s indemnity arrangements.’

Trainee members must also ‘confirm that [they] have appropriate professional indemnity insurance to cover [their] area(s) of practice, either personal or provided by [their] employer/NHS Trust.’

What are the different types of insurance?

In addition to first party property insurance (which protects the physical assets of a company), there are several different types of professional insurance for psychotherapists and psychotherapeutic counsellors. Some of these (such as professional indemnity or public liability) are obligatory under UKCP rules and/or those of your organisational member; other types of professional insurance are optional.

Please read through the following explanations carefully before considering any insurance policy. Many insurance companies or brokers ‘bundle’ various types together; some let you choose individual components to suit your exact needs.

What is professional indemnity insurance?

This type of insurance covers you, as a professional, against claims of professional breach of duty, negligence, omission or malpractice in providing therapy, treatment or advice in the course of your normal duties.

Normal duties as a psychotherapist or psychotherapeutic counsellor usually involve providing therapy, professional advice and other duties; giving or receiving supervision; teaching; running workshops; lecturing; or presenting at seminars or conferences.

This insurance usually covers the legal costs and expenses incurred in defending claims as well as any civil damages awarded against you. You may also be covered for loss of earnings if you are suspended or prevented from working because of an allegation until a hearing. However, you would not be covered for any loss of earnings after a disciplinary hearing or a successful claim.

What is civil liability?

Civil liability is the legal obligation that arises from wrongdoing that is not a criminal act. Traditionally professional indemnity insurance policies were written on a negligence basis only, meaning that negligence on your part had to be proved for a claim to be successful. However, under the more modern, broader civil liability wording, most civil liability claims made against you would be covered, unless it is specifically excluded in the policy wording. Civil liability policies typically include cover for breach(es) of duty of care, contract, trust, nuisance, fiduciary duty or statutory duty.

What is public liability?

If a client or any third party is killed or injured or has their property damaged arising out of your professional activities – through negligence or otherwise – this policy would cover your legal liability to pay damages as well as the costs incurred in defending the action.

If you work from home, the public liability section of your normal home insurance policy might not cover you for claims arising out of your professional activities. If you run a clinic or a business space for members of the public, you may be required by the local authority (or similar) to have such insurance in place.

What is products liability?

If a client or any third party is killed or injured or has their property damaged arising out of the use of a product supplied by you – regardless of whether you manufactured the product or not – you are legally responsible for any liability arising. This policy would cover your legal liability to pay damages as well as the costs incurred in defending the action.

What is libel and slander insurance?

If you are engaged in activities such as writing or contributing to articles, reviewing books, speaking at conferences, running workshops or seminars, or if you have leaflets, a blog, social media channels or a website, you may wish to consider insurance to cover you if you were sued for comments that you made (written or spoken) which someone might consider to be defamatory.

What other insurances can I get, or might I need?

• Employers’ liability insurance: If you employ someone, even part-time, you must have employers’ liability insurance to cover any claim by that employee against you arising directly out of that employment. This is a legal requirement and, if you are in any doubt as to whether you need this insurance or not, please contact your insurance broker/company immediately.
• Non-payment or requests for refunds of fees: This could cover you if a client refuses to pay you or requests a refund of fees paid to you professionally, especially if your insurer believes that, by doing so, this will avoid a future legitimate claim for a greater amount.
• Complaint investigation: This could be relevant where there is not yet any formal legal claim against you, yet you may have to undertake considerable time and expenditure to respond to your professional association. You can get some of the costs of this preparation work reimbursed.
• Run-off cover: If you cease practising (because of, say, retirement or taking a sabbatical), claims can still be made against you for up to (usually) three years for personal injury claims or six years for other types of claim (these limitation periods can be longer particularly if you work with children and young people). Run-off cover insures the liabilities relating to work carried out while you were practising in respect of any claims made after you stopped practising. This may be included as a part of your professional liability insurance but if not, you should ensure you budget for the additional premium payment as part of your succession plan. Supplementary cover is also available to cover claims brought after the expiry of the six-year limitation period as some claims might still be able to be brought if the Limitation of Actions Act 1980 is applicable.
• Directors and officers: Claims and prosecutions can sometimes be brought personally against a director or officer of a company and/or association where it is alleged they have committed a wrongful act or been negligent in their capacity as a director or officer. This policy could cover the legal costs of defending against civil proceedings and/or criminal prosecution.
• Charity trustees’ liability: This policy has the same intention as directors and officers’ liability – covering the trustees’ personal liability arising out of their actions as a trustee.
• Release of confidential information: If a court, tribunal or any third party asks you to release, or disclose notes of a confidential nature, certain insurance policies will reimburse you for any additional costs and expenses incurred in doing this and/or help you to resist the request in certain circumstances. Sometimes the costs can be recovered from the court, or the prosecutor or defence, and your insurer may expect that you recover in this way instead of claiming on the policy.
• Fidelity: You can get insurance that will pay out certain, usually capped amounts, if you experience any direct loss from the dishonesty of an employee, where there is a clear intention to cause you damage or obtain personal financial gain over you.
• Loss of documents: The cost of replacing lost documents or documents for which you are responsible, in the absence of any further fault or wrongdoing on your behalf or someone else being liable.
• Public relations: Sometimes the insurer will pay up to a certain amount where the use of a public relations expert could minimise or reduce the risk of a claim.
• Suitable car insurance: If you are travelling to a workplace, business or client/supervision appointment, you should have suitable car insurance that includes business use.

Liability policies will often include cover for legal costs (solicitors and if needed a barrister) to defend certain types of incidents or claims brought against you. Sometimes this type of insurance is tagged onto home insurance, travel insurance or motor insurance. In addition, some credit cards provide Legal Expenses Insurance. The insurers may expect you to use a particular law firm however the law says that where you are entitled to this type of cover to defend, represent or serve your interests in any inquiry or proceedings, the insured shall be free to choose its lawyer (or other person), in which case the insurance will cover the costs of your preferred lawyer (subject to terms and limits specified in the policy).

What are the usual exceptions for insurance claims?

Insurance policies have detailed lists of exclusions and each policy should be read carefully to ensure you understand what is not covered. However, the following exceptions apply to most insurances:

• Prior knowledge: where you knew, or ought to have known, about significant details prior to the start of the policy such as a potential claim (made, threatened or intimated) and failed to present this information to the insurer the insurance will not cover those claims, and it might not respond at all if you deliberately failed to present the information.
• Deliberate or fraudulent acts: if you did something deliberately (for example, something that caused injury, loss or damage), spitefully or something criminally liable, which resulted in a claim the policy will not respond. This can also impact on your eligibility for any future cover and will also exclude cover for professional discipline cases where you have a conviction or are accused of dishonesty.
• Various specifically excluded legal liabilities: these exclusions would be covered in the policy terms and conditions and you should read the small print carefully.
• Various significant exclusions or limitations: this could include acts of terrorism, or items left in unattended vehicles – again, read the small print carefully.

You will also usually expect to pay an excess – the first part of any claim on your insurance policy.

What insurance do I need if I am based outside the UK?

Overseas members must have arrangements in place to ensure that their professional work is adequately covered by appropriate indemnity insurance. All members including those based outside the UK must ensure they are indemnified against a claim from any client including those residing overseas for any period.

You must be aware of, and comply with, the appropriate regulation/laws related to the practice of psychotherapy/psychotherapeutic counselling in the country where you are practising or residing. This could be challenging as many countries have different qualifying criteria for the title psychotherapist or psychotherapeutic counsellor and some countries may not recognise the title. You may need to discuss the expected compliance with your insurance company and be clear in your engagements with clients..

As you might need to tailor your insurance to suit your working conditions and country/ies you operate in, you should speak to your insurance provider to discuss your situation in detail. If you are struggling to get appropriate insurance when working overseas or with clients who are based overseas, you should obtain specialist legal advice.

What insurance do I need when working with clients who are abroad?

If you intend to work with clients based outside the UK (either in person, or remotely), you should consider the implications of local jurisdiction and working internationally. This can be a complex area for consideration.

Even if you are based in the UK, you may still need to check if the country in which the client is located has any laws relating to who can use the title, advertise or practice as a psychotherapist or psychotherapeutic counsellor in that jurisdiction.

Therapists should recognise the need to obey the law of the country/area in which they practise. UKCP cannot offer advice on laws or regulations in countries outside of the UK.

We recommend that you contact the relevant professional body in the country you wish to provide therapy in, as they may be able to give you relevant and up-to-date advice. For queries about practice in Europe, the European Association for Psychotherapy (EAP) has a useful set of guides on practising psychotherapy in various countries on their website.

You must ensure that you are appropriately insured for your practice. You should contact your professional indemnity provider before undertaking any work with an overseas client and discuss your situation in detail as you might need to tailor your insurance to suit your working conditions and the country/ies you operate in. If you are struggling to get appropriate insurance for working overseas or with clients who are based overseas, you should obtain specialist legal advice.

For more information about working from home or online, please refer to UKCP’s Security and Confidentiality Guidelines.

What insurance do I need when working with clients online?

UKCP has published Guidelines for Working Online or Remotely. This document provides more information about insurance requirements as well as general recommendations when working internationally or in an online environment. However, we recommend that you speak with your insurer to check your cover.

What is the best policy for me?

Some companies specialise in insuring psychotherapeutic practice. It is advisable to get several quotes. Discuss your personal and professional needs with the companies in detail and look carefully at the level of cover offered before buying.

The price of insurance policies varies between providers and often depends on the type and level of cover provided. Some insurance brokers create ‘bundles’ of different types of insurance policies. Some of these may be useful to you, some not, so check that you are not paying for something that has been included in the package ‘bundle’ that you don’t need.

Where can I get further help?

Insurance companies increasingly provide a 24-hour helpline offering a wide range of advice. This is sometimes separate from the actual insurance company and is usually staffed by paralegals with access to solicitors, barristers or legal executives, often access with multilingual facilities as well.

Insurance providers

We are not authorised to recommend an insurer, provide advice on which insurance to get or provide advice about your personal circumstances. Please contact the individual insurance companies if you would like to discuss your insurance needs in more detail.

To support our members’ professional practice and help them to manage costs, we are negotiating special rates on professional indemnity insurance for UKCP members with leading insurance companies.

This is a member service to support your professional practice and help you manage the costs. We don’t receive commission from any insurance companies.

Companies that currently provide special rates for UKCP members are:

• Balens Specialist Insurance Brokers
• Howden Insurance
• Towergate Insurance

Other companies providing insurance for psychotherapists and psychotherapeutic counsellors include Howdens, Oxygen, Holistic, Hiscox and PPS. This list is not exhaustive and inclusion does not imply any endorsement by UKCP. See full disclaimer below.

Disclaimer

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