You insure your car, home, and even electronics. It only makes sense you’d insure your business and secure your livelihood.
As a business owner, you already have overhead, so insurance may sound like just one more expense. You may wonder what the chances are that something will ever go wrong.
And the answer isn’t satisfying: You can’t possibly know if you’ll ever need to use your insurance policy.
But, even if you don’t, having insurance for coaches can relieve some anxiety and protect your bottom line.
Life coaches need insurance
Your business has material, immaterial, and financial value. The material may be easier to see, like your office space, furniture, tech, and more. Then, there are the immaterials, like the services you provide to your clients as a life coach. Your business is also worth something — it’s your livelihood and sells for a cost. All of these values total the asset price of your business.
Insurance is essential because it protects you against any material, immaterial, and financial losses. A life coach covered by insurance can get back to business quickly after unforeseen disasters like a pipe bursting in the office or untimely lawsuit.
More pointedly, life coach insurance covers the following:
- Communication breakdowns: As a coach, you guide clients through a program that acknowledges areas of opportunity and work toward goals. However, clients can misinterpret your coaching advice, make poor choices, and blame you. They may also mistake your coaching services for mental health ones or make major life decisions they think you pushed them toward.
- Force majeure: While we hope your office remains safe and sound forever, you’d want protection from unforeseen circumstances, like fires, burglary, vandalism, or that burst pipe.
- Accidents happen: We know your place of business doesn’t necessarily pose a high physical risk, but it’s best to be protected. A client or employee could have an accident at your coaching location. Insurance will help cover medical costs.
Protecting your coaching practice
If you want to protect your life coaching business, you’ll have to defend yourself against the damages described above. Luckily, industry experts saw you coming and have created insurance for life coaches tailored to your business. Some agencies offer life coach professional liability insurance (also known as life coach malpractice insurance) along with coverage for your space and furnishings.
If you want to put together your own plan, here are the main categories of insurance products you should consider. Even if you get a specialized life coaching insurance policy, you should be familiar with the following types of coverage and policy terms to ensure your plan includes them.
- Professional liability insurance: This is also known as errors and omissions (E&O) insurance. It protects coaches from immaterial damages that result from a misunderstanding, like wrongly interpreted advice. It also protects you against breaches of confidentiality, which is an essential concern for life coaches who handle sensitive information.
- General liability insurance: This type of liability insurance covers third-party bodily injury or property damage, meaning that you're covered if that burst pipe in your office also causes damage to the space next door. You'd also be covered if a client has an accident, like a fall, at your place of business.
- Cyber liability insurance: Even if you use secure systems to store client information, you could be hacked. This type of insurance helps with legal fees if you’ve had a data breach.
- Business owner’s policy (BOP) insurance: This policy combines commercial property insurance and general liability coverage, meaning you can insure your space, protect against property damage, and avoid being held responsible for office injuries.
When searching for an insurance policy, choose something that best suits your business. If you only offer virtual services and don’t have an office, you might prefer to spend more on cyber liability insurance than general liability insurance.
Talk to companies offering policies to determine what’s best for you. Here are a few agencies that offer specialized insurance packages:
- Hiscox: This company’s life coaching insurance plan covers professional and general liability. They also offer a business owner’s policy (BOP).
- Progressive: Progressive Commercial’s life coach policy includes professional and general liability. You can add a BOP or commercial auto policy, too.
- Alternative Balance: This company’s policy covers general liability, defense costs, damage to rented premises, personal and advertising injury, and more. They also offer a cyber liability option.
- CPH: CPH’s life coaching insurance includes professional liability, premises liability, defense, deposition expense, and state licensing board defense coverage.
Get it in writing
To protect yourself further, get new clients to review your policies and FAQs and sign a contract to acknowledge they understand the terms of your service. Here are some essential points to include:
- Payment terms: Explain how much the client will owe and the payment terms, like the acceptable payment period and late fees. Stipulate the number of sessions a client is contracting and what they entail. Be as detailed as possible. You can use a template for this information — just leave an editable space to insert custom numbers and descriptions for each client. This prevents future price disagreements. Consider offering clients flexible payment options with Practice’s package payment plans. Doing so allows clients to purchase your services in installments rather than upfront. It’s easy to set up: simply decide how to divvy up installments, when they’re due, and we’ll automatically send clients invoices or charge their on-file payment method.
- What your services are (and aren’t): You're not a therapist, psychologist, or physical trainer. Make sure your clients know this. This can minimize your risk later on if there’s a dispute about what your services should have entailed or how your advice was interpreted. Explain the scope of your offering in as much detail as possible and clearly state that you’re not providing medical, nutritional, or mental health advice.
- Communication guidelines: Let clients know what your communication boundaries are. Describe when they can contact you and in what ways. Set clear guidelines for canceling individual sessions or services before the end of the contract term.
Ask for help
Making a contract is overwhelming. You want to protect yourself as best as possible, but you’re a coach, not a lawyer, and you may feel out of your comfort zone. Practice offers templates for contracts for coaches so that users can take the task of drawing up legal documents off their (already full) plates.