There’s generally no federal or state requirement for life coaches to be licensed, but this doesn’t mean they shouldn’t be insured. If you work as a professional in the industry, here’s why purchasing life coach insurance is likely a wise decision even though you probably don’t need a license.
If State Licensing Isn’t Required, Why Do I Need Life Coach Insurance?
State Licensure and Life Coach Insurance Serve Distinct Purposes
In most fields of work, licensure and insurance serve two distinctly different purposes.
Licensure generally acts as a legal credential that allows an individual to practice their chosen profession within a given jurisdiction. For example, a counselor may be licensed to offer counseling within the state where they live. While counselors might have to be licensed, life coaches usually don’t have to be.
Insurance normally provides financial protection against covered claims, which could be property, liability or other claims depending on the specific coverages included in a policy. Sometimes such protection is required before assuming a vocation, and it’s often helpful even when not officially mandatory.
Because the two are independent of one another, not needing one doesn’t impact choice regarding the other.
Life Coaches Face Many Risks
For those in the field, life coach insurance is so important because coaches face multiple risks.
One of the bigger risks they face is the potential for a professional liability lawsuit or claim, which would be filed over a real or perceived error in the life coach’s work. For example, the following mistakes could lead to this type of suit:
A hypnosis session goes awry, and the client is injured as a result
A life coach fails to recognize that their client needs mental health counseling and provide a referral to a qualified counselor
A client realizes they don’t like their job during a coaching procession, and proceeds to tell off their boss and lose their job
In any of these circumstances (or almost any other situation), a client might claim that their life coach had a negative impact and try to seek financial compensation for that impact.
Most insurance for life coaches includes some form of professional liability insurance that may help protect against risks like these. This coverage typically helps pay legal defense fees, settlements and judgements associated with covered claims.
Some other risks that life coaches sometimes are exposed to include:
Loss of or damage to business-owned property
Online attacks and data breaches
Common accidents involving third-party injuries
Business personal property coverage, data security coverage and general liability coverage may help protect against these sorts of risks. It’s usually easy to bundle these coverages with professional liability coverage when purchasing insurance for life coaches.
Not Being Licensed May Increase Potential Liability Risks
The lack of a licensure requirement for life coaches doesn’t just do nothing to reduce the above-noted risks. In some ways, not having a formal licensing process could even increase the potential liability risks that life coaches face.
Without a formal licensure requirement, the exact scope of a life coach’s work is somewhat subjective. Even though coaches can try to set clear expectations about what they will and won’t do, some clients may try to use a slightly different list of job duties in order to bolster their case. Should this happen, life coaches normally don’t have a licensing board that they can deflect certain claims against them to. Instead, they’re often left fighting the claim on their own.
Finding insurance that includes robust professional liability coverage is one way life coaches can help shield themselves from these types of claims. An insurance agent who specializes in insurance for life coaches can assist with finding robust professional liability coverage.
Find Insurance for Life Coaches
If you don’t have life coach insurance, contact one of the knowledgeable and independent insurance agents at World Insurance Associates. Our agents are well versed in the nuances of this type of insurance, and they have the expertise to get you the professional liability and other insurance coverages that you need.