Private Practice Start Up: What Types Of Insurance Do I Need? [Show Notes]

DISCLAIMER: Information is for educational purposes. This is not legal, professional, or financial advice. Please consult with your local legal, licensing board and financial professional for specific guidance and assistance.

Key Concepts Addressed In This Video:

Malpractice insurance for therapists
Liability insurance for private practice
Business insurance for mental health practitioners
General liability policy for private practices
Coverage options for new private practices
Importance of insurance in healthcare businesses
Choosing the right insurance policies for your practice
Legal protection through insurance in private practice
Understanding different types of professional liability coverage

Transcript

Note: This video is transcribed using AI therefore some errors have occurred in the transcription of this video.

Hi everyone! I wanted to pop in quickly to talk about professional liability insurance and why it’s vital when opening your private practice. There are three main types of insurance you should consider:

1. Malpractice Insurance

This is an absolute must for private practice. Malpractice insurance protects you if a client sues you for negligence, abandonment, or malpractice. Make sure the policy you choose includes HIPAA coverage and offers adequate protection for your specific population.

For example, if you work with lower-risk populations, like those experiencing adjustment anxiety, you may not need as much coverage. However, if you work with higher-risk populations—such as individuals with chronic mental or medical health issues, anger management challenges, substance abuse issues, or domestic violence cases—you might want higher coverage. These cases often have more legal complexity, even if they aren’t more likely to result in lawsuits.

When researching policies, be prepared to answer questions like:

Do you work with adoption or fostering cases?
Do you involve animals in therapy?
Do you supervise interns or manage a team?

These factors could influence your premium. I personally use a policy through NASW’s former affiliate, which is now called Prefera. I’ll link it below for your reference. Of course, check with peers in your field, as there might be better options depending on your license and clientele.

2. Cyber Liability Insurance

If you provide telehealth services, cyber liability insurance is crucial. It protects you in the event of a breach, such as your computer being hacked or stolen. While malpractice insurance covers what you’ve done professionally, cyber insurance protects client records and data.

3. General Liability Insurance

If you have a physical office, general liability insurance is important. It covers incidents like slip-and-falls—for example, if someone slips on ice outside your office. If you operate a telehealth-only practice, you may not need it. However, if you have a hybrid practice, clients visit your home, or you visit theirs, it’s worth having this coverage.

From my experience, these policies are very affordable. I just renewed mine for $212 for the year. Even if you add extra coverage, it’s typically well under $500 annually—peace of mind at a great price. Many policies also include limited legal consultations, which can be incredibly helpful.

For instance, when I put my practice on hold during maternity leave, I contacted my provider for guidance on staying legally compliant while my business was paused. Their advice was invaluable, helping me ensure a smooth transition for both myself and my clients.

Bonus Tip: Consider Disability Insurance

While not the same as professional liability insurance, disability insurance is worth considering, especially if you’re self-employed. This can provide financial protection if you’re unable to work due to a medical emergency or other circumstances. Programs like Aflac may be a good option.

When I went on maternity leave, I discovered I wasn’t eligible for state disability benefits due to being self-employed. It’s a frustrating reality for many private practice owners, but planning ahead with savings or supplemental insurance can help mitigate the impact.

Final Thoughts

Having reliable insurance is one of those necessary expenses for private practice. You hope you’ll never need it, but if the unexpected happens, you’ll be grateful it’s there. The three key types to prioritize are:

Malpractice Insurance – Covers professional actions or negligence.
Cyber Liability Insurance – Protects client records in the event of data breaches.
General Liability Insurance – Covers physical accidents, such as slip-and-falls.

I’ll link the provider I use below, but make sure to shop around and find what works best for you. Read the fine print, and ensure your coverage protects you, your clients, and your practice.

Additional Show Links

As a marketing coach and mentor for mental health professionals, I specialize in helping therapists grow their practices through authentic and ethical marketing strategies. By focusing on blogging, SEO, and email marketing, I guide therapists to attract clients who genuinely resonate with their expertise, fostering meaningful connections and long-term success. My mission is to support you in building a practice that not only thrives but also remains sustainable and fulfilling—without the stress and burnout that often come with the journey.

Below is a sample of what I have to offer, if you have any questions please feel free to reach out to me via email at hello@stresslesstherapist.com.

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Product/Service Reviews

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Complete Review of Simple Practice
Is Simple Practice worth it for your private practice? Dive into this detailed review covering its features, functionality, and how it can support your business. Learn more.

Instant Download Course

Mastering Clinical Documentation With Speed and Efficiency
Streamline your notes and reclaim your time! This instant-download course includes templates and strategies to help you document effectively while staying compliant. Start today.

Coaching Opportunities

Private Coaching for Private Practice Marketing
Ready to fill your private practice with confidence? Work with me to create a personalized marketing plan for building a sustainable, values-centered business. Learn more.

Private Coaching for Income Diversity as a Therapist
Expand your income streams with guidance tailored to therapists. Learn how ethically and authentically to add courses, books, or other passive income strategies to your practice. Find out more.

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