Professional Indemnity Insurance for Psychologists

Psychologist indemnity insurance: do I need it?

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
• Volunteer

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.

Finder survey: How often do Australians compare or switch their professional indemnity insurance?

What does professional indemnity insurance cover?

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.

How much professional indemnity insurance cover should I have?

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.

Other types of psychologist insurance to consider

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

How to compare cover for psychologists

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

Talk to a broker about professional indemnity insurance

Frequently asked questions

• What is run-off cover?

  Run-off cover means your insurance policy can protect you against claims that are made after you stop practising and which occurred while you were still working. Check before you buy a policy that run-off cover is included.

• What happens if I don't renew my insurance policy?

  The Psychology Board can prevent you from practising if you don't have sufficient professional indemnity insurance in place. You need to let them know within 7 days if your cover has lapsed or been cancelled and you can't practice again until you have a policy in place.

• Am I covered by my employer's professional indemnity insurance cover?

  If you work for an employer, it's likely that they will already have professional indemnity insurance in place, but you should check with them to make sure.

Written by

Gary Ross Hunter

Editor, Insurance

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

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