Professional Liability Coverage, Clearly Explained

Protecting More Than Just Your Practice

Professional liability coverage can be difficult to interpret, especially as your psychology practice becomes more complex. Psychē is here to help you understand not only what your policy includes, but why those protections matter in real-world situations.

From licensing board investigations and HIPAA concerns to billing audits, data breaches, and unexpected events, our coverage is designed to address risks psychologists actually face. The information below explains how these protections work and how they support your practice beyond traditional malpractice claims—so you can make informed decisions with confidence.

Below, you’ll find a detailed overview of Psychē’s professional liability coverages. If you’d like additional context on how these protections work and why they matter, the following resources provide helpful explanations of common risks and insurance concepts relevant to psychological practice:

Learn More About Your Coverage

The following Insurance 101 resources provide helpful context to better understand how coverage works and how different protections apply in real-world practice:

•  Insurance 101: Understanding Additional Coverages (.pdf)

• Insurance 101: Avoiding Common Coverage Mistakes for Psychologists (.pdf)

• Insurance 101: Claims-Made vs. Occurrence Coverage (.pdf)

Psyche Coverage Highlights

Coverage options and limits vary by policy type. Psychē offers dedicated policies for psychology students and for psychologists in research or academic settings. The limits outlined below apply to individual and group practice policies.

Click here for a full features and benefits of Psyche.

HIPAA Claims – Up to $50,000

If you face an investigation or civil proceeding for alleged HIPAA violations (or state equivalents), this coverage helps pay for legal defense and, where allowed by law, fines and penalties.

Board Proceedings – $150,000

If you are called before a licensing or disciplinary board, this coverage pays for legal representation and related expenses. These proceedings can be costly and stressful, even if no malpractice occurred.

Billing Audits Defense – $25,000

If a government agency or insurer audits your billing practices, this coverage helps pay for legal defense and compliance support. Audits can happen even without wrongdoing.

Deposition Expenses – $30,000

If you are subpoenaed to give testimony in a legal case (even if you’re not being sued), this coverage pays for attorney fees to prepare and protect your interests.

Subpoena for Records – $5,000 per proceeding

If you receive a subpoena for client records, this coverage helps pay for legal guidance to ensure compliance with confidentiality laws and ethical standards.

Practice Interruption – Up to $2,500

If your practice is unexpectedly interrupted due to illness, death, or disability, this coverage helps offset expenses during closure.

Privacy Breach Expenses – Up to $30,000

If your practice experiences a data breach, this coverage pays for crisis management, patient notifications, and credit monitoring services.

Assault Expenses – $30,000

If you are physically assaulted in your professional setting, this coverage helps with related expenses such as medical care or counseling.

Fire Damage to Premises – $150,000

If your office suffers fire damage, this coverage helps pay for repairs or replacement costs.

Medical Payments – $100,000

If someone is injured on your premises, this coverage pays medical expenses regardless of fault—helping avoid lawsuits.

Business Premises Liability – $100,000 per claim / $300,000 aggregate

Protects you against claims of bodily injury or property damage occurring at your office. Included at no extra cost.

Telemedicine Coverage

Covers services delivered via telehealth, as long as they comply with state laws and your scope of practice.

Defense Costs Outside the Limits for Claims and Suits

Legal defense costs do not reduce your liability limits—so your full coverage remains available for settlements or judgments.

Sexual Misconduct Defense Sublimited to $25,000

If you are accused of sexual misconduct the policy provides a sublimit of $25,000 of indemnity coverage. Defense costs for such matters are outside of this liability limit.