Life Coaches: Can They Bill Insurance?

Life coaching is a highly unregulated industry, and there are no legal requirements to start your practice. However, life coaches are not immune to lawsuits from clients who raise claims against them. While a sound contract can set the right expectations, a life coach would still need to cover the expenses of hiring a lawyer. This is where liability insurance for life coaches comes in.

Life coaches face multiple risks, including the potential for a professional liability lawsuit or claim, which would be filed over a real or perceived error in their work. For example, if a life coach fails to recognise that their client needs mental health counselling and provide a referral to a qualified counsellor, a client might claim that their life coach had a negative impact and try to seek financial compensation.

There are five kinds of insurance that a life coach should have: general liability insurance, professional liability insurance, commercial property and auto insurance, cyber liability insurance, and workers' compensation insurance.

Life coaching is not considered treatment and is not covered by insurance

In contrast, therapy is a type of behavioural healthcare that focuses on the diagnosis and treatment of psychiatric disorders. Therapy can be used for personal growth and relationship improvement, but the basic assumption is that the client is there for the treatment of a mental illness.

While therapy is a regulated profession, coaching is not. Therapy can only be conducted by a licensed therapist, whereas there are no requirements or regulations around who can provide coaching services.

Life coaches do not need to be licensed to practice, but they may still face lawsuits from clients who raise claims against them. This is why it is important for life coaches to have insurance, to protect themselves from financial damages.

There are several types of insurance that life coaches should consider, including general liability insurance, professional liability insurance, commercial property and auto insurance, cyber liability insurance, and workers' compensation insurance. These policies can protect life coaches from lawsuits, accidents, property damage, data breaches, and other risks.

Life coaches need insurance to protect themselves from liability claims and lawsuits

Life coaches can be sued for negligently performing their services, even if they haven't done anything wrong. For example, a life coach can be sued for:

• Harassment
• Breaking the confidentiality clause in their agreement
• Causing harm with their advice

There are five kinds of insurance that a life coach should have:

• General Liability Insurance: This policy protects your business from any accidents or injuries that may occur within your facility.
• Professional Liability Insurance: This policy is essential as any life coach can be sued for negligence. It helps protect your business by covering the costs of legal defence by your lawyer, as well as any settlement or damage that might come up in your case.
• Commercial Property and Auto Insurance: This type of insurance protects the assets that belong to your business, including office buildings, equipment, furniture, laptops, and electronics that are used for work, and the car that you drive to get to your clients and business meetings.
• Cyber Liability Insurance: This policy is essential, as it protects your small business in the event that someone hacks into your computer to access private and confidential information about your clients.
• Workers Compensation Insurance: This policy will protect your business and your employees from any work-related accidents, illnesses, and deaths.

There are five types of insurance life coaches should have

Life coaches provide guidance, motivation, and support to their clients to help them achieve their goals and improve their lives. However, life coaches can also face lawsuits from clients who raise claims against them. Therefore, it is essential for life coaches to have the right insurance policies in place to protect themselves and their businesses. Here are five types of insurance life coaches should consider:

• Professional Liability Insurance: This type of insurance, also known as malpractice insurance or errors and omissions insurance, covers life coaches if they are sued for negligently performing their services, even if they haven't made a mistake. It covers defence costs, negligence claims, and personal injury claims (e.g. libel and slander). It is crucial for life coaches as they can be sued for causing harm with their advice or breaking confidentiality.
• General Liability Insurance: General liability insurance protects life coaches from claims of bodily injury and property damage. For example, if a client trips and falls during a session, injuring themselves, general liability insurance would cover the medical expenses and lost wages. It also covers damage to third-party property.
• Commercial Property & Auto Insurance: Commercial property insurance covers damage to business-owned property, such as office buildings, equipment, furniture, laptops, and other electronics. Commercial auto insurance covers vehicles used for business purposes. Together, these policies protect life coaches from accidents, fires, theft, and other incidents that may damage their property or vehicles.
• Cyber Liability Insurance: Cyber liability insurance is essential for life coaches as their sessions often involve discussing personal and confidential information. This type of insurance covers the costs of cyberattacks, data breaches, malware, and phishing attempts. It also covers lawsuits from clients if their confidential data is leaked.
• Workers' Compensation Insurance: If a life coach has employees, workers' compensation insurance is crucial. It covers medical costs and lost wages for employees who suffer work-related accidents, illnesses, or even death. In most US states, providing medical insurance and sick leave for employees is legally required.

Life coaches face multiple risks, including professional liability lawsuits

Life coaches can also face risks such as:

• Loss of or damage to business-owned property
• Online attacks and data breaches
• Common accidents involving third-party injuries

Life coaches need insurance to protect their small business from liability claims, injury or property damage, and even business interruption. Without the right insurance coverage, any of these could bankrupt a life coach and their business.

Life coaches can follow steps to bill insurance for their services

Life coaches cannot bill insurance for their services, as life coaching is not considered a "medically necessary treatment". However, life coaches can follow certain steps to become qualified to bill insurance for health coaching services.

Health coaching is a distinct service from life coaching, and is considered a legitimate part of the healthcare system. The American Medical Association (AMA) has approved three "Category III" CPT (Current Procedural Terminology) codes for health and well-being coaching:

• 0591T Health and Well-Being Coaching face-to-face; individual, initial assessment
• 0592T Individual, follow-up session, at least 30 minutes
• 0593T Group (two or more individuals), at least 30 minutes

These CPT codes are temporary and reimbursement by private payers, such as insurance companies, is optional. However, life coaches can take steps to become qualified to bill insurance for health coaching services using these CPT codes. Here are the steps to follow:

• Obtain a certification in health coaching: To be recognised as a health coach by the AMA, individuals need to be certified by either the National Board for Health and Wellness Coaching (NBHWC) or the National Commission for Health Education Credentialing (NCHEC). Obtaining a certification will involve graduating from an approved program, completing a certain number of coaching sessions, and/or accumulating work experience.
• Register for a National Provider Identifier (NPI) Number: The NPI is a unique 10-digit identification number for healthcare providers, which is required for reimbursement of claims. Individuals and organisations can apply for an NPI number online for free.
• Provide clients with relevant information: Different insurance companies will have varying rules and criteria for which services they will cover and reimburse. It is important to match the health coaching services provided with the relevant CPT code and inform clients of the applicable codes for reimbursement.
• Get approved as an in-network provider: Becoming an in-network provider with insurance companies will streamline the billing process. Contact the insurance company and follow their requirements to get approved.

By following these steps, life coaches can position themselves to bill insurance for health coaching services using the approved CPT codes. It is important to stay updated with any changes or renewals to the CPT codes, as well as any new opportunities for reimbursement.

Frequently asked questions