Maintaining professional liability insurance

“Maintain professional liability insurance” (NBCC, 2027 task 6.12)

Professional liability (malpractice) insurance protects counselors and their clients if a claim of negligence or a board complaint arises. Counselors should understand what their policy covers and keep it active. The exam tests the basics of coverage types and who needs coverage.

Key points

Professional liability insurance covers legal defense and damages for covered claims of professional negligence; many policies also include license defense coverage for board complaints.
Occurrence policies cover incidents that happen during the policy period regardless of when the claim is filed; claims-made policies cover claims filed while the policy is active, so ending one may require tail coverage.
Employer coverage may not cover a counselor's private practice or may not protect the counselor's individual interests; many counselors carry their own policy.
Insurance panels, employers and some supervision arrangements require proof of coverage; check whether your state or setting requires it.
Supervisors should confirm their policy covers supervision, and students usually need coverage during practicum and internship.
Notify the insurer promptly of a potential claim, subpoena or board complaint, as the policy requires.
Insurance does not cover intentional wrongdoing or criminal acts.

In practice

A counselor leaving agency work to open a private practice buys an individual policy and confirms that it includes license defense coverage and covers telehealth across the states where she is licensed.

A counselor with a claims-made policy retires. She buys tail coverage so that claims filed after retirement about earlier services will still be covered.

Check yourself

What is the difference between occurrence and claims-made policies?

Occurrence policies cover incidents during the policy period whenever the claim is filed, while claims-made policies cover only claims filed while the policy is active.

Why might a counselor need tail coverage?

To cover claims filed after a claims-made policy ends for services provided while it was active.

Is an employer's liability policy always enough for an employed counselor?

Not always, because it may not cover outside work or protect the counselor's individual interests.

NBCC's knowledge and skills for Domain 6

Knowledge of: State laws (state licensure law, supervision requirements, abuse reporting, license renewal, CAQH); Federal laws (e.g., HIPAA, FERPA, immigration policy, HI-TECH, ADA, NPI); Codes of ethics; Third-party reimbursement, insurance and billing (e.g., CPT codes); Counseling Compact; Emerging technologies in Counseling; Crisis policies and procedures; Recording keeping and reporting requirements and procedures; Appropriate logistics for telemental health services; Scope of practice (e.g., letters of support, working with special populations); Alternative medical-assisted/pharmacological interventions; Accessing state licensure board; Executing voluntary and involuntary commitments.

Skill in: Maintaining confidentiality; Discerning reputable training providers and programs; Troubleshooting technological difficulties during telemental health session (e.g., session disconnects, video not working); Billing and third-party reimbursement.

A study guide written by ExamDragon from NBCC's published task; not NBCC material and not part of the exam.