Your Malpractice Insurance….

Professional liability and risk management tend to be some of the more stressful topics for most clinicians. Receiving a license to practice involves years of study and significant investments of energy and money. It is thus understandable that most clinicians go to great lengths to protect their ability to practice. Often this involves frequent anxiety about liability, licensure, and the ways in which exposure can be minimized.

Clinicians’ concerns notwithstanding, mental health practice remains one of the less risky health professions. This is due to a number of factors, including the physically noninvasive nature of treatment, ongoing training in ethics, and a professional culture that looks favorably upon consultation and supervision. Most clinicians are very concerned about limiting the ways in which they are personally, professionally, and financially exposed to litigation and it is because of this the vast majority of clinicians carry professional liability insurance.

Professional liability insurance is an important tool for limiting exposure. Many policies also offer additional “perks” to curb risky behavior, such as telephone numbers for policy holders to call to receive consultation. These consultations are usually helpful for the insurer as well as the insured. They provide the insured with an easily accessible resource and a cost effective means for the insurer to advise policy holders and minimize litigation-related costs.

As a general matter, most clinicians immediately think of malpractice lawsuits when they consider possible legal actions. This is a correct association, as a malpractice action is a claim alleging that a clinician violated a legal duty. However, a malpractice claim is only one of several different legal actions that clinicians might face. Examples of other actions include claims of liability for physical injuries that occur outside of clinical treatment, such as a slip and fall in the office.

Perhaps the most feared action by clinicians is one before a licensing board, which is a somewhat different area of law, called “administrative law.” Administrative courts on both the statewide and federal level are technically within the executive branch of government, and because of this function somewhat differently than courts under the judicial branch. In California, administrative agencies such as the Board of Psychology and Board of Behavioral Sciences follow a series of rules that are articulated in several different locations, including the California Statutes, the body of regulatory law that these agencies promulgate, as well as several other sources. Administrative law is also a specialty within the legal profession.

Administrative matters are generally subject to different rules than those before a court under the judicial branch of government. For example, the rules of evidence and procedure may be quite different than those under the judiciary. In addition, an administrative or regulatory board has latitude in whether to abide by the recommendations of the administrative officer who hears administrative matters. The judiciary is generally very reluctant to overrule administrative decisions. These differences, as well as others, account for some of the concern with which clinicians view administrative actions. Administrative matters are generally unfamiliar to most mental health practitioners.

Many practitioners are surprised to learn that some professional liability policies provide only limited funding for a defense against administrative actions, with additional or expanded coverage only available as an option. A legal defense against administrative actions can be quite involved, and because of this many practitioners choose to enhance their coverage. It is always a good time to review your professional liability policy to be sure your insurance matches your concerns.

Lest this unduly raises anyone’s anxiety, some reality testing may be in order: relative to the number of licensed professionals in California, the number of administrative investigations opened is small, and the number of citations and adverse decisions are even lower.

For most clinicians, however, any reasonable step to mitigate exposure (civil, administrative, or otherwise) is a wise investment. This is particularly the case when it comes to reevaluating professional liability insurance. It takes a minimal amount of time to reread one’s policy. Additional steps, such as seeking consultation, continuing education courses, and maintaining an awareness of developments in the relevant research literature can pay dividends.

** A similar version of this post appeared in the 2007 March/April newsletter of the San Francisco Psychological Association newsletter.

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