What Can Happen if a Clinical Counselor Doesn’t Carry Malpractice Insurance?
Are you a clinical counselor? If so, carrying malpractice insurance is vital to protecting your career in the face of a malpractice lawsuit.
According to the American Psychological Association, around 2% of counselors will face a malpractice lawsuit at some point in their careers. While this percentage may seem small, it means that there is a possibility you will face a malpractice suit, and that you should be prepared for what this suit will entail for your finances, license, and career. Read on to learn the dire consequences that could occur if you choose not to carry malpractice liability insurance.
Consequence #1: You Pay Malpractice Fees Out of Pocket
One of the most severe consequences of not carrying malpractice insurance is that you would need to pay any fees and expenses associated with a malpractice suit out of pocket. There’s no doubt about it—malpractice lawsuits can be expensive. According to a report from 2014, the average malpractice lawsuit against counselors costs around $46,921. However, this cost can be even higher depending on your specific circumstances.
The overall cost of a malpractice case includes your cost to hire an attorney, arbitration costs, and the damages you must pay. Let’s break down three different cost areas that you would need to cover out of pocket should you ever find yourself facing a malpractice lawsuit, then compare it to what a malpractice policy would cover.
Attorney’s Fees
Attorneys typically charge varying fees depending on the type of lawsuit you are facing. Without malpractice coverage, you or your counseling practice would need to hire a lawyer out of your own pockets. As a result, you may not be able to hire the best lawyer for the job, as your budget may only permit an affordable, less-experienced attorney.
Arbitration Costs
Arbitration costs also make up a significant portion of the overall costs involves in a malpractice lawsuit. The arbitration costs you would need to pay depend on several factors, such as the American Arbitration Association rules applicable to your case, your arbitrator’s hourly rate, and how much the other party is seeking within the case.
Generally, there are two types of arbitration fees:
- Administrative fees: Fees you must pay to the American Arbitration Association
- Arbitrator compensation: Fees you must pay to the arbitrator involved in your case
Punitive and Compensatory Damages
If the opposing party wins the malpractice suit, you may need to pay punitive and compensatory damages that the judge settled for within the case. Compensatory damages are those that cover medical expenses and other physical damages that the other party faced.
Punitive damages are the penalty that you must pay for acting recklessly or exhibiting behavior that led to the other party’s suffering. Without liability insurance, you will need to find a way to pay for these damages out of pocket.
What Malpractice Insurance Would Cover for a Clinical Counselor
Paying malpractice costs out of pocket can be incredibly expensive and may not even be feasible for you depending on your financial situation. Instead of having to suffer these expenses alone, we recommend purchasing malpractice insurance as a safety net just in case you ever face a malpractice case.
Malpractice coverage typically provides funds for the following expenses involved in a malpractice lawsuit:
- Medical damages
- Legal fees
- Defense costs
- Arbitration costs
- License Protection
How Much Does a Malpractice Policy Cost?
Paying for malpractice coverage is much more affordable than having to cover all of the costs involved in a malpractice suit out of pocket. Depending on your policy and the type of counselor you are, your insurance policy may cost anywhere from $6 to $30 each month.
In the case that you need to use your malpractice coverage to pay legal and compensatory fees during a malpractice lawsuit, you would simply need to pay a small deductible amount, and your insurer would cover the rest. Typical malpractice deductibles range from $0 to $2,500 each year, and often, the lower your deductible, the higher your monthly cost. The cost also varies based on the incident and aggregate limits you choose. Malpractice expenses above the amount of your deductible that occur within one calendar year will be covered by your insurance, up to the specified limits.
Consequence #2: You Defend Yourself to the Judge or Licensing Board
Let’s say one of your clients begins a clinical counselor malpractice lawsuit against you or reports your behavior to the licensing board, and you do not have insurance to cover your expenses involved. As a result, you decide to defend yourself rather than hire a lawyer or other professional to represent you.
Here we will break down the consequences of trying to defend yourself in court or to the licensing board.
Malpractice Court Case
Defending yourself in court is never a good idea, especially because the opposing party will likely have an experienced, professional lawyer on their side to represent them. Unfortunately, most people who defend themselves in court do not win. Even if you prepare for the case and spend time creating a decent defense, you simply will not have the same expertise that a malpractice lawyer has.
Without malpractice coverage, you may not be able to put up the quality defense necessary to receive the best outcome from your case. As such, you may choose to adhere to the opposing party’s demands without going through a trial at all.
Malpractice License Case
Often, if a counseling client is unhappy with their counselor for any reason, they will report the counselor to the licensing board rather than begin a malpractice case. While the consequences of a complaint to the licensing board are not quite as severe as those of an actual malpractice lawsuit, they can still create a negative impact on your license or cause you to lose your job.
Many counselors, especially those without malpractice coverage, feel tempted to defend themselves to their licensing board rather than hiring a lawyer. However, attempting to represent yourself places you in a vulnerable position in which you could say the wrong things or accidentally worsen your position. Hiring a legal professional is the best way to receive a positive outcome from the board but doing so can be expensive without insurance.
Consequence #3: You Spend More Time on Your Lawsuit Than Your Patients
Navigating a medical malpractice lawsuit can be incredibly burdensome and time-consuming without a lawyer on your side. If you choose to represent yourself to the judge instead of hiring an attorney, you will need to spend many hours preparing your case, collecting evidence, evaluating documentation, and making your claim to the judge.
Malpractice suits involve a lengthy timeline, which could cause you to spend more time on your lawsuit than you do on your patients. As a clinical counselor, you probably know how stressful canceling counseling appointments can be for your regular clients. Your clients may choose to see another counselor instead or leave your practice altogether. Even if you do maintain all of your appointments, you probably will not be able to dedicate as much attention and compassion to your clients because of the lawsuit looming over your head.
Malpractice Lawsuit Timeline
If you think that malpractice lawsuits are quick and easy, you are mistaken. A thorough, successful malpractice case includes the following key steps:
- Filing the lawsuit
- Filing an offer of proof
- Collecting evidence, evaluating legal claims, and questioning both parties
- Mediation and negotiation
- Trial
Even if the court sets a specific trial date at the beginning of the case, you can expect that date to be postponed several times before the actual trial occurs. Once the trial starts, you can expect it to take several days of back and forth between you/your defense and the opposing party.
How Long Does a Malpractice Lawsuit Take From Beginning to End?
The exact amount of time that your lawsuit will take depends on various factors, including the nature of the case, the severity of the damages, and the claims the opposing party holds against you. However, because both sides must follow a strict, intensive process, you can expect your case to last anywhere from six months to several years from beginning to end.
Throughout the entirety of your malpractice lawsuit, you will not be able to dedicate your full attention to your career. As a result, your existing client load and overall career will suffer, regardless of the outcome of the case. However, carrying malpractice coverage can allow you to hire a legal team to take much of the burden off of your shoulders in the event of a lawsuit. A lawyer can spend all of the necessary time and effort filing paperwork, collecting evidence, and defending you, allowing you to continue focusing on your career.
Consequence #4: The Risk of an Expensive Lawsuit Follows You Everywhere
If you are a counselor, you may be reading all of this information thinking, “Okay, malpractice lawsuits are expensive without insurance. But I’m always careful, so I don’t think I’ll ever encounter a malpractice suit myself.” Unfortunately, this is very dangerous thinking in the mental health field.
Malpractice lawsuits are often challenging to prevent. Many clinical counselors face these lawsuits even when they have done nothing wrong and tried their best to avoid a suit at all costs. A client, or client’s family member, could believe that you acted irresponsibly and start a lawsuit against you with no real cause.
Not Having Insurance Can Be Stressful
Even if you are not currently facing a malpractice lawsuit, not having insurance can be stressful throughout your career as a counselor. You must always consider the fact that a lawsuit could occur despite your best efforts, and that this expensive ordeal could drain all of your savings and prevent you from moving forward in your career.
Instead of dealing with this stress and anxiety, you can simply purchase a malpractice policy and have the protection you need in the case that a malpractice suit occurs down the line. Having insurance takes away this stress and prepares you for the worst-case scenario. While you may never need to use your insurance, if you do, you will be prepared.
At NOW Insurance, we make the process of securing medical malpractice insurance as seamless and easy as possible. If you do not yet have a malpractice policy in place, now is the day to begin your insurance policy and have the coverage you need in case you ever encounter a malpractice lawsuit. Get an online quote in under 3 minutes from our online application.
Learn more about our policies for counselors and mental health professionals.
Contact NOW Insurance today with questions about coverage.