Do Coaches Really Need Insurance?

Counting the CostAs someone who was burgled, losing all my personal jewellery accumulated in the form of presents and heirlooms over many years, it was a relief to have a household contents insurance policy. No one could replace the sentimental value of the items but at least there was some recompense. This may be a personal experience but one which holds true professionally too.

Naturally, insurance companies are in business to make a profit and most do rather well. Professional indemnity insurance is a necessary requirement. All professionals whether accountants, doctors, therapists, lawyers etc know the value of carrying professional indemnity insurance.

Professional indemnity insurance covers you against professional negligence or malpractice. It is important that all self employed coaches have suitable professional indemnity cover. Defending oneself even if the case is found in favour of the coach is a costly business, let alone one that can cause a considerable amount of emotional distress. Many corporate sponsors in their contracts with coaches now ask the coach to confirm they have such cover. You may be covered when you visit a corporate sponsor’s premises by that organization’s public liability but you are not covered for negligence or malpractice.

It is also important (if you see coaching clients at home) to remember that you need to check with your insurance company to see whether running your practice from home affects your contents policy. This is an area that many coaches do not think about but one that does have ramifications. Some insurers will not cover you when you run a business from home, while others place a waiver on the policy or provide a separate special insurance policy for home workers. Such a waiver may state that the policy will only pay out if it can be proven that there has been forced entry. This kind of waiver is meant to avoid the idea that clients leave the premises with your goods when they visit. Failure to check your policy could mean you find yourself not covered even if it is a genuine burglary. There are now a number of insurers who provide specialist home workers policies so it is worth investigating these.

If you are practising from rental premises you should also check what insurance is actually carried by the landlord; it may be only accidental damage to the premises itself. It almost certainly won’t cover any contents belonging to you and may not cover injury to third parties.

Illness or injury to a self-employed person can also have a devastating effect. No income is received but many personal and business expenses are still incurred. A few days are manageable but a few months could ruin your business and what happens to your clients? When this happens, the differences between being employed and being self-employed can be appreciated. There is no six months on full pay and six months on half pay or whatever employment conditions prevail. You are in deep trouble and the worry of losing your business can add to your problems and perhaps lead you to return to work before you are fully recovered. Again, this can be covered through appropriate insurance.

However, the downside of these policies can be the cost of contributions. It may prove more economical to keep a minimum of three months money in a building society earning interest to be called upon should you be unable to work. Most bouts of illness that are likely to keep you from working are probably going to be of between 1 and 6 weeks and therefore a reserve fund of 12 weeks should be more than enough to provide the financial cover you will require.

Thus, there are a number of insurances that may well be applicable. These being: building and contents insurance if you see clients at your home, Public Liability (accidents to third parties on your premises), Professional Indemnity Insurance (against negligence and malpractice) and Illness/loss of earnings.

For insurance advice, use a specialist coaching Insurance Broker in whom you have confidence. Many professional bodies such as the Association for Coaching have arranged discounts for members with preferred suppliers of such insurance.

Do not be afraid to shop around to get the best quotes. State clearly the services that you offer and the cover you are looking for. The onus is then on the insurance company to dispute this when you insure and if they do not it makes it more difficult for them to wriggle out of paying subsequently.

Ignoring the aspect of relevant insurance is probably a risk most coaches would just not want to take.