I was told during my coach training that life coaches need insurance.
And as that was in the UK which is far less litigious than the US I duly signed up for coaching insurance when I moved to Florida in 2006.
Then when I came to renew for my third year I stupidly happened to mention that I also practised hypnotherapy.
My premium shot up fivefold.
Clearly, their underwriter had spent too long watching a very dead Bruce Willis hypnotise an equally dead kid – if you haven’t seen The Sixth Sense, that will make zero sense.
Being confident I’d not breach any legal, ethical or moral guidelines and coming at a time when I was struggling to attract paying clients I made the decision to let it lapse.
Then a few years later my wife was on the receiving end of a scam insurance claim.
A pregnant woman claimed to the Police (hours after the supposed event) that my wife had run into the back of her in slow-moving traffic causing her whiplash injuries.
My wife denied it and had 3 witnesses to support her, but the woman wouldn’t even back down after the attorney she hired withdrew because the Police dismissed her claims,
Even though the case never went to court and the woman didn’t get any money, it dragged on for over two years.
I’m not sure what we’d have done without the insurance company fighting on our behalf – big shout out to Progressive Insurance in the US who were brilliant.
It certainly caused me to reassess my situation regarding coaching insurance, or my lack thereof.
Now I am a big proponent of insurance for coaches and here are six reasons why and six types of insurance.
1. Professional liability insurance
As per my example above, being sued or accused of something is a distressing possibility for almost anybody.
That possibility is magnified exponentially for a coach and why professional liability insurance can be an excellent idea.
Whereas offering mental health advice may or may not be illegal depending on where you live and the type of advice you give, it’s ethically dubious at best and reckless at worst.
It could certainly leave you open to a civil lawsuit and an accusation of neglect.
And offering medical or financial advice could potentially leave you open to a criminal and/or civil lawsuit.
I’m going to presume you’d not do any other above but the lines are not always crystal clear and as with the situation involving my wife, people can lie.
Professional liability insurance can cover any legal costs in a criminal case and legal fees and damages in a civil suit.
For less than £10/$10 per month, the peace of mind insurance can bring may be well worth that cost
The case for liability insurance for coaches is pretty compelling when you do a cost/benefit analysis,
But there are other reasons and other types of insurance that may be useful to investigate.
2. General liability insurance
This insurance covers you against third-party claims of physical injury or property damage.
This is essential if clients visit your office or home or if you conduct in-person sessions.
You don’t want some clumsy fucker tripping over one of your dogs and banging her head on a doorframe and then suing you.
Or, tripping over one of your dogs and putting her head through your expensive patio doors and then finding out your home insurance won’t pay.
General liability can also cover you for complaints made against you about your advertising.
3. Loss of earnings cover
I’m no expert, but I suspect you cannot buy loss of earnings insurance coverage until you have proof of earnings in the first place.
But, when you have taken the smart decision of hiring me to help you get clients and you’re making a lovely income, that will change.
Because you don’t want to see everything evaporate because you break your leg skiing in the Dolomites after one too many glasses of Chardonnay.
This is also sometimes known as Business Interruption Insurance
4. Business equipment insurance
Without my laptop, I’m about as useful as a bald, pasty old guy who doesn’t have a laptop.
Meaning, I’m fucking useless for anything other than taking out the rubbish/trash.
I do ALL my writing on my laptop.
I do ALL my coaching on my laptop.
And I do ALL my marketing on my laptop.
So you’d better believe that I have insurance for something going wrong with it.
I not only always buy 3 years’ worth of Apple Care when I buy a new Mac (which I do every 2 to 3 years), but I have accidental damage cover too.
5. Cyber insurance
It’s probably unlikely that an elite North Korean cyber team is going to hack into your laptop, but who knows?
And anyway, data breaches happen every day.
Mostly, they are by accident, but it doesn’t matter whether some careless greedy corporation loses your data, or you do, you can still get sued.
People can get very prickly if you email them to explain you lost all their private details and even a check down the back of the sofa hasn’t unearthed them.
6. Business owners policy (BOP)
A BOP can be a combo of some/all of the above and is usually a bespoke solution rather than something off the shelf.
It may even include property insurance if you own the building you operate from and is worth mentioning to a broker if you use one.
How much does insurance for life coaches cost?
It’s like almost any type of insurance – it depends.
If you’re earning a mega-bucks, own a huge swanky office and employ an army of underlings then it’s going to be very expensive.
But, if you work from home, and never have any clients at your house then you can cover your ass for well under £100/$100.
When I took out insurance for the first time there was nobody offering specific coaching insurance and as such companies weren’t even sure how to classify it.
Insurance companies now know that coaches represent very low risk and there is a lot of competition for the business which has driven prices down.
The conclusion – Do life coaches need insurance?
Life coach insurance is not a necessity unless you live in a country that regulates it.
Or, you are affiliated with one of the coaching organizations like the ICF that insist on it.
But neither is it an absolute necessity for you to have a coaching practice with no website or social media presence, but that doesn’t mean it’s a good idea..
But the reality is, if your ability to build a coaching practice stands or falls on £100 you’re almost certainly going to fail anyway.
And there may be another unintended benefit to acquiring insurance.
You could use it as something that separates you from other coaches on your website.
There is an element of professionalism in saying on your About page that you are fully insured.
I’m keen to know if you have insurance and if so, which type.
And if you don’t, are you going to consider it now or roll the dice?
Please do leave me a comment.