What you need to know
Professional indemnity insurance for psychologists is a legal requirement in Australia.
If you are accused of a negligent act, error or omission in your job, professional indemnity insurance can pay for legal and court costs, as well as any damages awarded.
If you are a registered psychologist working in Australia, you need to have professional indemnity insurance in place that meets the Psychology Board's professional indemnity insurance registration standard. This means that you need professional indemnity insurance if you:
- Are self-employed
- Perform a combination of employed and self-employed roles
- Work in an unpaid role
You won't need professional indemnity insurance if you are employed and your employer has cover in place. If you are a registered psychologist but you're not practising for a specific period of time, you don't need professional indemnity insurance. You also don't need it if you are registered in Australia but are practising overseas.
Psychologists can provide incorrect treatment to a patient, fail to provide adequate supervision, misdiagnose a behavioural problem or even breach a patient's privacy and share confidential information. This opens you open to being sued if you make an error, omission or breach of professional duty that results in a client suffering a loss.
This is where professional indemnity insurance comes in. It provides cover for court and legal defence costs and includes cover for any damages or compensation. Professional negligence lawsuits can be very costly to defend against, and without cover in place, you run the risk of ending up in a dire financial situation.
You need to have enough insurance coverage to pay for compensation if a successful claim is made against you. This specific amount that you will need then, depends on your specific circumstances and a number of factors such as:
- The area that you work in
- The services that you provide
- The risks involved in your job
A broker will be able to work out how much insurance you need by asking you a series of questions about your role.
There are several other types of insurance cover that psychologists should consider getting.
- Public Liability Insurance. This is different from professional indemnity insurance because it protects you from damages related to the physical surroundings and property as opposed to the specific services you provide. For example, if a client slips and falls while at your office and they submit a claim against you, public liability can protect you.
- Commercial property insurance. This covers you for repairs if your property and its contents are damaged by fire, theft or some other insured event.
- Cyber liability. This protects you from claims made against you if you are the target of a cyber attack and your client's information is compromised.
- Business interruption. If your business is unable to operate, business interruption can pay you for the losses incurred.
Find more types of business insurance
When you're looking for a professional indemnity insurance policy, there are a number of factors to consider. Shop around and find a policy that is suited to your insurance needs.
Research insurance providers
Look for a company with a trusted name and reputation, and preferably one that is backed by plenty of experience. You will need to decide whether you want to go with a general insurer or one who specialises in this field. There are certain insurance companies that specialise in professional indemnity insurance for certain occupations, so check to see if one of these providers may be able to offer the cover you need.
Take advantage of comparison sites to review specific policies
Use online comparisons sites to weigh up the pros and cons of a number of policies. This will involve looking at the features, benefits, limits and exclusions of competing professional indemnity plans to find the most suitable option. Investigate the limit of indemnity of each policy, a figure which is typically between $1 million and $20 million. Would this limit be enough to cover you in the event that you found yourself the subject of a costly lawsuit?
Check the level of cover for 'inquiry costs'
It's also a good idea to check the level of inquiry costs offered on each policy. The most common investigation psychologists face is a hearing at the Psychology Board of Australia. The costs incurred in such hearings is referred to by insurers as inquiry costs, but while some policies will offer cover equal to the limit of indemnity you have selected, other policies will offer a significantly lower limit. Be sure to pay attention to the fine print.
Other features to look for include free legal advice and run-off cover.
Find out more about professional indemnity insurance
If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.