Protect Your Coaching Business!
You’ve got your shiny, new coaching certification. You've just set up your life coaching business. You're finally working with great clients. Everything is going smoothly, so why would you ever need to think about insurance?
As a life coach, you have the privilege of helping people achieve their goals and live their best lives. However, with great privilege comes great responsibility. While coaching can be an incredibly rewarding career, it's important to recognize that it also comes with certain risks. Why not protect your business from potential harm?
Why Do I Need Insurance?
In CLCI’s Coaching 101 class, you’ll learn that a life coach is not a professional advice giver. Our job is to help our clients reach goals and solutions on their own. However, not all clients come into a coaching relationship with those expectations. This difference in expectations can be solved with establishing a coaching contract early on in the coaching relationship.
(Check out our tips on creating a coaching contract here.)
While a coaching contract helps clarify expectations between the coach and the client, there still may be times when a client pursues legal action if they feel harm has been done. Without insurance, the coach would be financially responsible for their own legal defense and could be held personally liable for any damages awarded by the court. By having insurance, however, coaches can protect themselves against these risks to themselves and their livelihood.
Types of Life Coach Insurance
There are many types of insurance and it can feel overwhelming to sort through them all. Each type of insurance provides specific coverage for different risks associated with your coaching activities. It's important to carefully consider your specific needs and risks when choosing the types and levels of insurance coverage that you need.
CLCI has collected a list of the various types of insurance and put them with example scenarios for how they might apply to your life coaching business
1. Professional Liability Insurance
Professional liability insurance, also known as errors and omissions or indemnity insurance, is one of the most common types of insurance for coaching professionals. Liability provides coverage for claims of professional negligence, mistakes, or errors.
Your success as a life coach is contingent upon you building a relationship with your client so that you can provide support as they work through their journey. While this is a great and necessary aspect of life coaching, it also opens you up to risk from any mistakes you might make that aren't in line with local law or from a client who feels they have been wronged. The private nature of a coaching relationship also leaves space for risk of false accusations. Even if you have the supporting evidence to dispute such claims, you would still need to cover the legal costs associated with defending yourself and your business.
Professional liability insurance can help cover legal costs, judgments, and settlements in cases where clients are suing for emotional or financial damages due to your actions in the session.
2. General Liability Insurance
If you operate your coaching business out of a physical building and meet your clients in person, general liability insurance is for you.
This general insurance covers claims of bodily injury or property damage that may occur during a coaching session (Maybe avoid full-contact coaching or coaching at the gym). These incidents are often accidental and entirely unpredictable. Even if your office is the most OSHA-compliant space, there’s still room for accidents to occur. For example, if a client trips and falls while in your office, general liability insurance can help cover the costs of medical expenses and legal fees associated with the incident.
3. Cyber Liability Insurance
If you use a computer to store client information, meet with clients, or take payment for your coaching sessions then you will want cyber liability insurance.
Think of this insurance as protection for anything related to your computer or the internet (as it relates to your coaching business). This type of insurance provides coverage for data breaches, cyberattacks, and other related incidents that may result in financial loss for your clients. Cyber liability insurance can help cover the costs of notification and recovery, as well as any legal fees associated with the incident./
4. Property/Homeowner's Insurance
Property insurance is the equivalent of homeowner’s or renter’s insurance but for your business. This type of insurance provides coverage for damage or loss of your property or equipment, such as computers, furniture, or other physical items used in your business. It will help cover the costs of repairs or replacement if your property is damaged due to a covered event, such as a natural disaster or fire.
In addition to this, many of us coaches work from home and claim our home office space as a deduction for tax purposes. Some homeowner's insurance will include additional coverage for these existing business expenses that are broad enough to include business property and could even offer reimbursement for lost income if the property is not usable.
5. Workers' Compensation Insurance
If you have employees or contractors who work for you, you will likely need to purchase workers' compensation insurance. This will provide coverage for medical expenses and lost wages if an employee or contractor is injured on the job. Workers' compensation insurance is also typically required by law in most states.
How to Acquire Life Coach Insurance?
So, you know what kind of insurance you want. What’s next?
Luckily, it’s entirely possible to bundle the majority of these insurance types into a Business Owner’s Policy (BOP). A BOP can be a cost-effective way to obtain the coverage you need as a life coach. This is definitely a great option for reducing the overall costs of insurance. Learn more about BOPs including some recommended providers from Nerdwallet here.
Picking an insurance policy involves assessing your specific risks and needs as a life coach, researching, and comparing coverage options and pricing from different providers, and seeking guidance from insurance professionals. There also may be benefits to using a provider that you already have a policy with.
Thinking about insuring yourself can feel scary because it involves assessing the dangers your business faces every day. However, once you have an insurance policy set up, your business will be much more protected.
Not at that step yet and want to get started in your coaching career?
Don't miss out on our 3-day life coach classes, it's an education that is beneficial for life, not just for life coaches! Want to learn more?