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What Types of Insurance are Mental Health Counselors Required to Carry?

What Types of Insurance are Mental Health Counselors Required to CarryThose who practice counseling or psychotherapy may be concerned about the types of insurance mental health counselors are required to carry. That makes sense because these professionals carry a great deal of responsibility in their positions. They help individuals to manage their most personal issues and concerns.

It’s possible that the emotional state of clients can be so strained that they become a danger to themselves or those around them. There are laws of compliance that regulate the mental health field; therefore, it’s important that counselors be vigilant in displaying professional conduct at all times. Unfortunately, mistakes can happen. Misunderstandings occur.

Additionally, working full time to assist others with their struggles can have an affect on a counselor or psychotherapist’s mental health and everyday life. This can lead to personal days and other forms of self care. That’s why practitioners should always have some type of insurance policy in place to help protect them and their assets. The right protection and insurance company for both mental and physical safety can make a big difference.

Types of Insurance for Mental Health Counselors

Mental health counselors should arm themselves with liability insurance, also sometimes referred to as malpractice insurance. There are two types of insurance that fall under this category. These are professional liability insurance and general liability insurance.

Professional liability, a popular insurance product for mental health counselors, covers issues related to the professional practice of one’s job. These include such things as inaccurate advice, negligence, misrepresentation, and violation of good faith. In addition, sexual misconduct is associated with professional liability. General liability refers to things that could occur related to one’s general business practices such as property damage, bodily injury and associated medical costs. This type of insurance coverage assures that a mental health professional is not solely responsible in any of these cases.

Why Mental Health Professionals Need Malpractice Insurance

Both of these types of liability insurance are for the protection of counselors. They help professionals to manage costs associated with lawsuits and can potentially save an individual from losing their home or business due to litigation. We live in a litigious society in which many are quick to file lawsuits when they feel they are wronged.

This matters to mental health practitioners due to the sensitive nature of their work. Counselors are there to help people who are seeking assistance in managing problems that are adversely affecting their daily lives. Such issues are sensitive and can expose a counselor to potential allegations or risk.

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Specific Benefits of Insurance for Mental Health Counselors

If a mental health counselor is hired to work for a hospital, school, etc, they may be offered an insurance plan from the company. It is important to know exactly what is covered and deemed insurance products. If a mental health counselor chooses to practice in their own private practice, it is equally if not more important to have the best insurance to protect themselves.

Insurance for Mental Health Counselors Means Legal Help No Matter What

Mental health insurance provides practitioners with legal help in the form of attorneys that is well-versed in their specific area of practice, which the American Psychological Association shares can help counselors to avoid lawsuits. They can even help to intervene on a counselor’s behalf in order to protect practitioners. This is often done in the form of letters or other formal correspondence. Even if a settlement is reached or a jury verdict is not in the favor of a mental health practitioner, insurance will pay for costs up to the policy limits. This can save professionals from being liable for such costs out of pocket.

Insurance for Mental Health Counselors Means Peace of Mind

A major benefit of professional liability insurance for mental health practitioners lies in the peace of mind it provides. Knowing a policy is in place to cover costs related to potential lawsuits helps professionals to focus on the job of helping their clients. It provides a sense of financial security, as well. Having such insurance just makes financial sense. It also makes professional sense, as malpractice insurance can assist in handling any complaints to licensing boards or risk of losing one’s license.


It may be important to keep these things in mind when considering what type of insurance you need. The question of what types of insurance are mental health counselors required to carry is one every professional should take seriously. If you’re looking to get started or get a quote on an insurance policy, you can head on over to the American Counseling Association for some quick links and important information.

Related Resources:

How Do Private Practice Counselors Afford Health Insurance?

How Do Counselors Handle Lost Income Due to Taking Sick Days?

Are Counselors Bound by HIPAA?

Is Counseling Always Kept Confidential?