Health Professionals Who Are Employees Must Have Personal Professional Liability Insurance

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

We are often asked what we consider to be the biggest problem that a health professional experiences in defending himself or herself in a complaint against their license.  In our opinion, it is not having the financial resources to retain the services of an experienced attorney to defend him or her.  Because of this, we believe that any licensed mental health counselor, psychologist, social worker and family therapist who is an employee of any hospital, skilled nursing facility, home health agency, assisted living facility, medical group, or any other organization must have his or her own personal professional liability policy that provides ample insurance coverage for professional license defense expenses.

We see more license complaints that must be defended than we ever see civil claims for damages filed.

Don’t Assume if You Are Insured by Your Employer That You are Completely Covered.

In our experience, most of the complaints filed against health professionals come from employers.  In many cases, a client or patient will complain to the employer and the employer will file the complaint.  In other cases, the employer initiates the complaint because of substandard performance, documentation problems, allegations of theft or drug diversion, allegations of falsification of documents or records, allegations of inappropriate sexual conduct, etc.  When this happens in most cases, the employer terminates the health professional.  This is why we say that a health professional must have his or her own independent professional liability insurance policy.

Just when you need it the most, you may find yourself out of a job, with no income and no money to pay for a legal defense.  This may ultimately lead to your losing your professional license and your ability to ever work as a mental health counselor, psychologist, social worker and family therapist again.

Many health professionals labor under the incorrect assumption that they are “insured” by their employer or their agency or that their employer’s or agency’s insurance covers them.  This is a fallacy, especially when it comes to defending against a complaint made against one’s professional license.  If your employer or agency is the one that files the complaint against you, you don’t really think that your employer or agency is going to cover the legal expenses associated with your defense, do you?

You Can Afford an Independent Professional Liability Insurance Policy.

Professional liability insurance policies for non-physician licensed health professionals are very cheap, often policies run about ten or 20 dollars a month.  Usual limits of coverage for this small premium payment are one million dollars of coverage for civil suits and $25,000 or more coverage for professional license defense.

Take note, it is not as simple as just purchasing the first professional liability insurance policy you find offered.  Many professional liability insurance policies do not offer license defense coverage.  Or, if they do, it is limited to only complaints where there is also the threat that a patient is going to sue for money.  Still others provide such low limits of coverage for license defense expenses (e.g., $5,000 or $10,000) that it is not worth the money paid for it.

Be very careful when purchasing insurance through your professional association.  Make sure it provides at least $25,000 of coverage for complaint defense and make sure it provides coverage when no claim for damages from a patient or client is expected.  Get this in writing.

We Reccommend Theses Professional Liability Insurance Companies.

We usually tout insurance such as that provided by Nurses Service Organization (NSO) and Healthcare Professionals Service Organization (HPSO) as providing great bang for the buck.  But here lately, we’ve been seeing (and hearing) more and more about CPH & Associates insurance.  Not only does it provide one million dollars in coverage if you are sued in a civil court, but it also provides up to $35,000 in coverage for professional license defense coverage.  Additionally, for a very small additional payment, with CPH & Associates Insurance you can increase that coverage to $100,000 for professional license defense.  The other company we hear good things about is Lloyd’s of London.

If you have a complaint filed against your license and you have to prove your innocense through a formal administrative hearing (trial), this can be very expensive.  Additionally, if you lose at this level, you may have to appeal the results to a higher court.  These expenses can easily cost $75,000, even if you win.  And you are not ever assured that you will get any of this money paid back to you, even if you are innocent and you win the case.  Inexpensive insurance coverage is the only thing that makes since.  Buy it!


We urge all licensed mental health counselors, psychologists, social workers and marriage and family therapists, especially those employed by other organizations, to purchase and maintain their own personal professional liability insurance policy.  It’s tax deductible.  But check to make sure you have coverage for professional license defense, even when there is no claim for damages expected from a patient.  Additionally, pay the extra premium to purchase a higher limit of coverage for professional license defense cases, or buy a second insurance policy for this additional coverage.  You will never regret this decision.

Contact Health Law Attorneys Experienced Investigations of Mental Health Counselors, Psychologists, Social Workers and Family Therapists.

The attorneys of The Health Law Firm provide legal representation to mental health counselors, psychologists, social workers and family therapists in Department of Health (DOH) investigations, FBI investigations and other types of investigations of health professionals and providers.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at


Do you have personal professional liability insurance? Why or why not? After reading this blog, will you consider getting it? Please leave any thoughtful comments below.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.