The 4 Pillars of Your Practice

First, we want to recognize the behavioral health and social work professions as genuinely noble, founded on service, integrity, and clinical expertise. The profession can often be stressful and very dangerous. The nation is grateful for what you do—AND SO ARE WE! Thank you!

Pro-Tip: Practice for Business; or is Business the Practice?…or both?

There is a ubiquitous philanthropic purpose and benevolent spirit within social workers and their professional services. Caring is a critical intrinsic quality among social workers. Humanitarian care is the bedrock of social work and compassionate caregiving for the common good in society. However, a pragmatic element of self-sustainability still exists among social workers. We all need to live, eat, and have a home. The business side funds these needs, or pillars, of social work practice. Pragmatically, an asymptotic balance evolves where the client’s and practitioner’s well-being coexist.

Considering the practitioner side, let’s navigate the four business pillars of your social work practice from the perspective of insurance risk mitigation. Businesspeople face four typical pillars of business risk—yes, social work practitioners are businesspeople, too. The four business pillars are Liability Risk, People Risk, Property Risk, and Financial Risk.

Liability Risk:

Liability risk is the most widespread category because it has so many versions. Let’s look at it in terms of internal and external risks. Internal risks can include direct types of risk such as client therapy and sessions, malpractice, charting, licensing board complaints, and client records management. External liability risks outside of direct therapy can include indirect types of risk such as slip and fall incidents in your office, client property thefts during sessions, third-party property damage, client injuries in general and related medical costs, malpractice and negligence by employees and contractors, and client records breaches by you or your vendors who handle client records.

Liability risks and claims from clinical practice are typically the most frequent and severe. Therefore, with a comprehensive Professional Liability policy and a solid Help Line that Preferra Insurance Company offers is a fundamental platform. A good General Liability insurance policy with a fire peril limit of $1,000,000 is also essential, even if you do not have an office. Preferra Insurance Company’s General Liability policy is the only market policy with a $1,000,000 sublimit per occurrence. Unlike other policies, it covers client property losses in all locations while you are delivering professional services.

A simple Cyber Liability policy is essential if you rely on a third party to handle your client records, such as a mover of your paper files or a digital warehouse containing your client records. Preferra Insurance Company offers an array of inexpensive Cyber Liability policies that provide the critical coverage you need under HIPAA HITECH CFR Part 160, which holds you accountable for third-party breaches of your client records. You may want to explore Employment Practices Liability Insurance (EPLI) policy coverage if you employ many people. These policies deal with wage and billing issues and labor issues. EPLI premiums and claims are expensive, so only some insurance carriers offer EPLI.

People Risk:

People are human capital in business terms, and there is People risk in any organizational enterprise. Consider these People risk categories: clients, employees, office visitors, and contractors. Your General Liability policy covers you for the accidents and damage that occur. Your Professional Liability policy may or may not cover your employees and contractors. You need to understand the meaning of “Additional Insured” in your insurance policy and what the policy language says. The dominant theme is that human capital is a business pillar and human service for your clients. So, keep everybody safe, happy, and feeling accomplished.

Property Risk:

Property risk and loss are headaches and can be severe. Your General Liability and Professional Liability policies protect you from third-party property loss to some extent. If you want property, contents, and inventory coverage, consider a Business Owners policy. Homeowners’ insurance policies are another example of how your contents and building are covered and a coverage solution for home office-based practitioners. Property insurance, such as a homeowners policy, allows you to add certain items through an Endorsement to the policy.

For example, some practitioners use specific equipment devices or musical instruments during therapy sessions. You can add these items to your Homeowners policy or a Business Owners policy to cover them in the event of damage or loss. You must check with your carrier(s) because they vary. Depending on the coverage selected, the additional Endorsement premium you pay gives you the right to collect up to 100% of the replacement cost, which is particularly important because some equipment, such as musical instruments, can cost $25,000 to replace. Generally, you must submit a written letter to your insurance carrier from the supplier or equipment manufacturer for underwriting that attests to the replacement value.

Financial Risk:

The financial risk from damage or loss, such as liability, wage loss, and property loss, is a general and core peril arising from all insurance claims. And they all have a cost. They bring a combination of indemnity costs and legal defense costs. Fire damage, particularly fire liability damage to a third party’s property, is a significant expense. That is why all insurance carriers, except for Preferra Insurance Company, have a low General Liability fire peril limit in the $250,000 to $350,000 range. Preferra Insurance Company’s General Liability policy covers fire liability with limits starting at $1,000,000 and $2,000,000 per incident–an essential feature in these inflationary times because you will be underinsured if your office causes a fire that damages your neighbor’s property.

In closing, stay on top of these four pillars of your business practice. Together, they support your business and practice roof. They will become weak if neglected, and a “cave-in” is likely. So, monitor your insurance policies for ample coverage. As your business or practice changes, so should your insurance coverage.