General Tips for Practice Risks

First, we want to recognize that the social work profession is truly a noble one—founded on service, integrity, and clinical expertise. At times, it can be stressful and even dangerous.

Practice risks come in all shapes, sizes, and forms. Some risks are severe and costly—such as lawsuits—while others are minor issues such as dissatisfaction with care, licensing board complaints, medical record subpoenas, or general complaints that may amount to nothing. No matter the size or severity, all risks ultimately reach you, and you will experience the consequences of your actions or inactions. Some risks may feel minor at first, but when they directly impact you, they can be painful and disruptive.

The most serious and severe claims are born out of negligence. Virtually every lawsuit Preferra encounters on behalf of its insureds starts with a negligence complaint—often with a licensing board complaint filed first. Dangerous claim incidents arise from mere dissatisfaction with care, all the way to full negligence lawsuits. Remember that proving negligence involves four elements: duty, breach, damage, and proximate cause. These elements have been discussed in numerous Tip of the Month articles.

Given this, the logical step is to review your professional liability policy, general liability policy, and cyber liability policy. These policies are contracts intended to shift risk from you to your insurance carrier. Do not rely solely on an insurance broker for interpretation; brokers are motivated by commission earnings rather than your protection. Publicly traded insurance companies and brokers often aim to maximize profits by narrowly defining what is covered, relying on broad exclusions, imposing low sub-limits and high deductibles, and crafting definitions so tight that coverage becomes difficult to access. The result is that you, the insured, may not be covered when a claim arises because it falls outside those narrow terms.

Many people confuse the insurance broker with the insurance carrier, but it is critical to know which entity is responsible for paying indemnity and legal defense costs. Personally, I would rather have a mutual insurance company like Preferra issue my policy than rely on a publicly traded Wall Street insurance company focused primarily on profits. Preferra is unique because it operates as a mutual risk retention group owned by its policyholders. This means profits are secondary and used to maintain stable premiums, enhance benefits, fund risk education programs, and deliver robust customer service.

Professional Liability Insurance (PLI) is the most frequently purchased insurance product among social workers. Cyber Liability coverage is also increasingly popular due to the rising number of both third-party and first-party information breaches. PLI policies typically only cover first-party breaches, such as HIPAA incidents. Third-party breaches became a more substantial risk under 45 CFR Part 160 of HIPAA HITECH, which holds you liable for breaches caused by third parties handling your records.Here are a few example tips to ask yourself:

Does ABC’s policy cover my General Liability and Professional Liability risks at separate limits like other carriers?

NO. ABC’s policy uses a shared limit for both PLI and GL perils. The limits are not stacked. This means your coverage is weakened. For example, if you buy ABC’s $1MM/$3MM “combined” policy and you have a non-PLI claim, that payout can exhaust your entire PLI limit—leaving you with no malpractice coverage. Likewise, a malpractice claim could use up the limit and leave you with no general liability protection. You are underinsured with ABC’s policy. It is doubtful that a landlord would accept ABC’s general liability coverage once the policy language is reviewed.

Preferra’s PLI policy provides many client-related GL perils at no additional cost. Plus, the Preferra GL policy provides an additional $1MM/$3MM in coverage for major general liability perils. Therefore, if you buy a $1MM/$3MM Preferra PLI policy and a $1MM/$3MM Preferra GL policy, you truly have $2MM/$6MM in total coverage—plus coverage for many perils that ABC’s policy does not include.

If a client is accompanied by someone who slips and falls in my office, does ABC’s policy cover that?

NO. ABC’s policy only covers “Business Invitees,” which is strictly defined. The business invitee must be the actual client who is in your office and actively receiving therapy at the time of the incident.

If the client slips in the waiting room or bathroom, you are not covered.

If a parent, friend, guardian, or anyone else accompanying your client is injured, you are not covered.

Preferra’s PLI and GL policies cover all people in your office or building, regardless of whether they are clients or receiving active professional services. Coverage also applies in hotel conferences, therapy sessions outside the office, training sessions, and more—extremely important in the growing Interstate Compact environment. Providing services to a client in another state could trigger two licensing board complaints, doubling your defense costs. Preferra covers this.

Are psychologists covered under my Professional Liability policy with ABC?

NO. Psychologists are expressly excluded and not listed under ABC’s “Professional Services.”

Preferra’s PLI policy covers psychologists, mental health workers, and social workers, and Preferra’s GL policy covers all occupations in the Allied Health category.

What exclusions in ABC’s Professional Liability policy could hurt me?

Several exclusions may harm you:

• Many carriers do not cover Divorce Mediation Services, or cover them only if you meet strict requirements such as specific notices or legal review at your expense.
• Many exclude damages arising from electronic data, backup tapes, optical media, or portable media.
• Many carriers exclude psychologists entirely.
• Many GL policies cap fire damage coverage at $150,000 total, regardless of number of claims.

Preferra’s PLI policy provides broad coverage for psychologists, mental health workers, and social workers. Preferra’s GL policy covers fire liability up to the full $1 million per-occurrence limit—far higher than most competitors.