The demand for life coaches has increased significantly recently, and many people have started their coaching businesses. However, many of these business owners wonder whether life coaches need insurance, and the answer is a resounding yes, to protect the business from unforeseen risks and financial damages.
However, not all insurances apply to this profession, so we must know what coverages are required to make the right decision when contracting them.
What is the difference between therapy and life coaching?
We can think of life coaching as a kind of therapy, but the truth is that they are two different things, especially when we talk about insurance. Therapy, or psychotherapy, is behavioral healthcare that focuses on diagnosing and treating psychiatric disorders.
It can also be used for personal growth or to improve relationships among mental health professionals.
Any coaching, on the other hand, has the objective of helping us to grow as people. In these cases, they seek to help us achieve our goals and desired results through a process of awareness and development of strategies and skills to take practical steps forward.
Coaching assumes that we are healthy and only want to make positive changes in our lives. This is never considered a treatment for a psychiatric condition and is not a regulated profession, so there are no specific requirements for who can practice this activity.
Does health insurance cover life coaching?
Medical costs can be high, so many people wonder if their health insurance covers life coaching. But, the answer is no because it is not considered a necessary treatment, so no health insurance will pay for this type of counseling.
Why is insurance necessary for these coaches?
Life coaches offer their clients professional counseling and guidance services, and this is an industry that is unregulated, with no requirements for their practice. However, this does not mean that life coaches will not face lawsuits from clients who may file claims against them.
A solid contract can set the right expectations, thus avoiding legal disputes. However, costs such as hiring a lawyer must be covered, which is where insurance comes in handy.
The purpose of taking out insurance is to be financially protected, and an insurance will protect our company from liability claims, injuries, or property damage. These costs could bankrupt the company if adequate insurance coverage is not in place.
Insurance that life coaches need
Every business should have insurance to protect against any unforeseen circumstances, and there are five types of insurance that every life coach should have:
General Liability
This policy will protect our business from any accident or injury within the facility. If a client files claims against you for bodily injury, property damage, or personal injury, these expenses will be covered by this type of insurance.
Professional Liability
This type of insurance will protect our business if a claim is filed for negligent performance of services, even when nothing wrong has been done. This is an essential policy because any coach can be sued for harassment.
This insurance allows you to cover your legal defense costs with an attorney. In addition, any settlement or damages that may arise in your case would aslo be covered.
Commercial property and vehicle insurance
These insurances will protect our business’s assets and may include office buildings, equipment, furniture, and many others. We should also have a policy covering the vehicle used to reach clients or have business meetings.
If there is an accident, theft, or fire on the property, the insurance will be covering these costs and thus offer great versatility.
Cyber Liability
Cyber insurance is essential because it allows us to protect our company if someone hacks into our computer. This insurance will cover all costs arising from data breaches and cyber-attacks.
Worker’s compensation
This type of workers’ compensation insurance will protect against any work-related accident, illness, or death. Even if we only have one employee, it is essential to have this insurance to cover medical costs and lost wages.
What is the cost of this type of insurance?
We must keep in mind that insurance policies are as unique as our business, so it is difficult to calculate the approximate cost of the policies. For this reason, it is always best to consult an insurance agent to determine which policy best suits our needs and business.
Normally, these coverages are completely customized because they will depend on many factors related to our business. In addition, it will depend on the coverages that we contract, since the more coverages we have for our business, the higher the price of the policy will be. The same applies if we are looking for a high level of coverage.