4. Malpractice Insurance, What To Get & Where
Every psychologist needs malpractice insurance. It just comes with the territory. But purchasing malpractice insurance can be daunting. So, to simplify the process, we created this guide on which company we use and which level of coverage to purchase. Thus, removing the daunting part of the process.
What to choose
For malpractice insurance, Psychology House is currently using Trust Insurance. You are free to shop around, of course. This is just who we use. We chose them simply because we’ve used them in the past at the individual psychologist level. As for the amount of coverage needed, we ask our psychologists to at least have One Million Dollars per occurrence and Three Million Dollars aggregate (1m/3m). When you are looking through coverage options, this will likely be one of the selections. Naturally, you are free to choose more coverage than this if you would prefer. This is just the minimum we ask for.
Types of coverage
While shopping around or through Trust Insurance, you may see different types of coverage. Two common types are Claims-made Coverage and Occurrence Coverage. The difference between the two is:
Claims-made Coverage - Covers you for claims that are made while the policy is active. So long as a claim against you is made after the start date of your policy, and while you still have an active policy with the company, then they will cover you for that claim
Occurrence Coverage - Provides coverage for incidents that happened during your policy, even if it’s reported years later. It does not matter if the policy is active when the claim is reported, it only matters that the policy was active when the alleged incident occurred. This extended coverage is sometime referred to as a “Tail”
Which coverage type you choose is up to you. We do, however, recommend Occurrence Coverage due to it’s larger window of protections. This, of course, does come with higher yearly premiums (Trust Insurance is as high as $790/year for Claims-made Coverage and $1,215/year for Occurrence Coverage). Keep in mind, these yearly malpractice insurance premiums are tax write-offs. So they should cancel themselves out after tax time.
