One of the most commonly asked questions by music therapists new to business ownership and even those who have been practicing for a while and are looking for a change or new company. Here is the what, why, where, and how to get your practice covered quickly.

What is Professional Liability Insurance?

Professional liability insurance covers claims arising from errors, mistakes, or negligence in the delivery of professional services. To trigger coverage under a professional liability policy, there must be an allegation that you or your business made an error or omission in the course of rendering professional services that resulted in harm to a third party.

Why do I need it?

While (in our experience) not the norm, there is the possibility that our music therapy services could cause harm to a client. Because we are a healthcare profession, we need coverage as do other professionals.

If you work in a facility, they will likely require you to provide proof of professional liability insurance (and general liability insurance as well). They want to mitigate risk on their end. If something happens, professional liability coverage protects them and you.

Where do I get it?

There are a variety of companies that provide professional liability coverage to music therapists. In years past, the American Music Therapy Association has championed HPSO, Healthcare Providers Service Organization. In my experience this organization is easy to work with and is ideal for solo practitioners and students. However, it can be quite expensive to add even one employee to your company policy.

Most music therapy business owners prefer other companies including Mercer/Proliability, Lockton Affinity, and Hiscox. My practice personally uses Mercer/Proliability with good success.

How much coverage do I need?

It’s very common to carry limits of Per Incident/Occurrence of $1,000,000 and Annual Aggregate of $3,000,000. If you or one of your facilities has specific requirements, you can adjust the limits. Essentially, per incident means that the policy will pay no more than $1,000,000 per claim that is filed on your policy. Annual aggregate ($3,000,000) is the maximum amount of money that the carrier will pay for all claims within the one year policy period. 

How to apply?

No matter which company you choose, you are going to need to gather some basic information about your business such as address, date established, and entity type (sole prop, LLC, S-corp, etc).

If you employ music therapists, you will need a list that includes

  • names of everyone you want covered
  • whether they hold employee or contractor status
  • their title or role
  • numbers of hours worked on average per week

You’ll also likely be asked for a description of your services, your gross revenue in the past twelve months and an approximate number of “patient” visits during that time.

Some facilities where you work may require you to add them to your professional liability (and possibly general liability) as an additional insured. You can usually do this at any time during the application process or once your policy has been established.

The application may ask some questions about risk assessment and you’ll sign a declaration that the info you provided is true and correct.

What happens next?

You’ll receive a quote by mail, email, or portal. If you agree with the terms, sign, pay, and return the quote. You’ll receive your policy fairly quickly.

Important

You will have to renew the policy every year. Proliability requires the same application be filled out each year during the renewal process. Pro tip: Keep a copy of your application from the year prior so that your information is handy. Then You’ll just need to update the employee list, revenue, and patient visits!

Become Insured!

Obtaining professional liability insurance is a necessary but less glamorous part of our role as business owners. Hopefully you never need to file a claim but professional liability keeps you and your clients protected. Choose a reputable firm or two, get quotes, and become insured!