“Do Coaches Need Business Liability Insurance???”

 First –

·       Like to briefly outline general  types of insurance needed by most service businesses:  You can usually purchase a package of coverages, similar to a HO policy which provide most of these in one contract at a very affordable price.

Next –devote the rest of the program to talking about professional liability exposures, risk management steps which will help you avoid claims  and insurance coverage available for coaching professionals.

Many of you have Homeowner’s Insurance or you  may have a business owners package policy :

If you have a home office and work as a sole proprietor you may find some coverage under your homeowners for your business personal property (Not general or professional liability!!)  IMPT- ASK YOUR AGENT- REVIEW WITH HIM/HER!!!

As a business You May need:

Insurance on your Building and/or Business Property – pays to repair or replace your property, any equipment, stock, furniture or fixtures that you own.  Breakdown of your equipment (such as your computer, scanning, phone systems etc.) can also cause you to shut down and loose income – These can all be covered under a Business Insurance Policy.

Protection  against  General  Liability – Protects you from general liability arising out of injuries to your customers or  the general public or for damage to the property of others.  Included are products, personal injury and advertising liability. Payments for defense expenses are also included.

If you lease office space or an apartment or own a condo - you are probably contractually liable for  damage you may accidentally cause by fire or other means. Check your lease or unit owner agreement.

Money and Securities – Are susceptible to theft by employees or others – crime coverage is available.

Optional add-ons usually available are:

·         Accounts Receivable/ Valuable Papers            

·         Separate Computers and Software coverage    

·         ERISA and EBL(For firms offering benefits)

·         Personal effects (belongings)                             

·         Ins. for property that goes off premises or in transit             

·         Coverage for Signs (which can  get expensive)     

·         Other types of insurance  usually written as separate policies, which you may need are:

·         Directors and Officers Liability  (if incorporated)

·         Business Automobile

·          Excess Umbrella Liability

·         If you have employees -  Worker’s Compensation, Disability may be mandatory in your state.

·         You may also want to think about a variety of Employee Benefits – Life Ins., Health, Long T. DBL etc.

·         Insurance to Protect your business against financial  disruption – Key Man or other Bus. Life, DBL for Execs., etc

The Hartford  “SPECTRUM” Program on the  “COACHTALK” Link offers many of these coverages.  The

“Spectrum” is available in the US (Not CANADA or OVERSEAS). The Prof. Liab. rider is offered in most, but not all states, standalone prof. Liab. policies are usually available in those other states.

PROFESSIONAL ERRORS & OMISSIONS COVERAGE for the coaching profession: (-I AM NOT AN ATTORNEY!)

This type of insurance is designed for people who represent themselves to the public as possessing special skills in their profession.

This is different from General Liability – GL insurance covers claims for BI/PD arising out of ordinary negligence. (Ex.-  Slip & fall on your property, or  you pull a chair out for your client to sit too far, you drop a client’s antique vase while looking at it. Every person and business has this exposure)

In professional liability – damage must  arise out of your actions, or inaction as a professional. To determine whether or not a loss is general or professional – look at the type of service or action that caused the loss, is it a professional service performed for others ??  It’s the act itself,  that determines whether or not it’s a general liability or professional liability exposure. Not the title of the performer of the act. (Ex. You may bill your business as John Smith “Lessons in Life” prof. Coach -   renting an office for your business isn't professional act, advising a client to take a yoga class for stress IS!)

Who are professionals? – We Normally think of traditional professions  as Doctors , Lawyers, Accountants, Architects & Engineers. Legal trend is to add many other categories such as:            

 In common law- promoting yourself as a professional creates an obligation for you to demonstrate a higher level of care than that of the  “ordinary man”.  The law holds professionals to certain higher standards of  performance.  (And this is whether or not they have to be licensed)

 Professional claims and/or lawsuits may arise from a variety of reasons. The basic formula is a suit or claim may arise from the following  set of circumstances:

 1) A  legal duty is owed to your client.   

 2) There is some type of breach of that duty and

 3) The breach causes damages  to the client

 What are legal duties owed by professionals ?  (Note – These can be specific to different legal jurisdictions and can change over time with court precedent and the like)  

Implied Duties:

·         Obtain and maintain  high levels of knowledge about  your profession (i.e. stay current- read trade journals, attend prof. Meetings & take continuing ed. Courses, communicate with your professional orgs,.

·          Probe and identify needs and concerns of your clients

·         Duty to apply your knowledge to each clients needs.

·         Communicate  important information to your client using ordinary English.

Other Duties:

·         Duty to accurately represent goods or services, their characteristics, uses, benefits (do not misrepresent)

·         Perform in a manner  and at a level that is “customary”, “reasonable” and within the scope of your profession.  Your performance will be measured against the standard of practice in your coaching community.

Types of suits/claims which arise

Two Common types are :

-          Breach of Contract-  Your liability goes back to what you promised you would do, this can be verbal or in writing. failure to attain results promised or contracted for.Sugg.: Talk w/ your attorney.  AND

-          Under Common Law -Negligence in  performance of services . Suits arise because clients perceive they are getting less than promised, or treatment doesn’t work for them.

-          Breach of confidentiality (growing litigation – privacy area)

-          Slander or libel

-          Vicarious liability can arise out of giving referrals . It doesn’t always but can create liability- you (a real example from a coach -You refer your client to a web maker- you have a duty to know the web maker’s capabilities)

-          Suits arise from pure negligent acts, errors or omissions, “mistakes”– you give what turns out to be bad advice which is relied on by your client who then suffers damages, or you forget to do something you promised.

 WHAT CAN YOU DO ??

Risk Management Techniques – are things you can do to either 1) avoid loss 2) mitigate a loss if it happens 3) or transfer your legal liability to pay damages avoiding the financial consequences of a loss.

  See Some Ways to Help Avoid Professional Liability Claims 

1&2) There are many Risk Management Techniques to help Avoid or Lessen  the impact of a  Claim – These include working  w/ a written contract or engagement letter, using hold harmless types of clauses ; don’t work outside your area of expertise – consult w/ other experts and obtain proper licenses; handle complaints promptly; standardize  and keep in writing policies and procedures on dealing w/both clients and employees within your business.  There are many more – subject of a separate program.

A Good approach  - is to use these techniques  along with purchasing insurance for claims that might arise despite all of your efforts above.

3) Why purchase  Professional Liability Insurance?

Professional Liability Insurance  provides protection for wrongful acts, errors and omissions made by the insured in the practice of his/her profession.  (Note- Not everything is covered – you need to refer to the policy language!)

-          Anyone can allege anything and drag you into court. Even if you have done nothing wrong and you win, you will accrue substantial defense expenses.  Most professional liability contracts will include payment for cost of defense. (Differ in how much they will pay – watch for this)

-          Understand that your coaching  fee is only a small part of what you might become liable for –  (Ex. Web site case above – client’s lost opportunity to do business, or in mid-mgr’s case – lost income for time he’s out of work or his reduction in income if he has to take a lesser paying job.

-          Insurance protects your business assets and perhaps you family from financial hardship

      A serious claim can put you out of business.

Other reasons:    

• Peace of Mind

• Provides  you clients financial security – maybe it was your fault, client does have damages

• Experts service by insurance Co’s attorneys to defend you.  

• You client might require you carry it – Ask for Certificate of Ins.?  

• Might give you access to more clients.

 Reach the program:    www.coachinginsurance.com   or call Hartford toll free – 877-492-5142.  

Examples include misunderstandings, misrepresentation, failure to state obligations in contracts, or to perform services as designed or requested or failure of recommendations to be usable by the purchaser. . The SPECTRUM can be further customized to fit your particular coaching business by adding the STRETCH endorsement and other available options.

Miscellaneous E&O Coverage to cover your professional liability. -( This option is currently available in about 36 states call to inquire) . This insurance is designed for people who represent themselves to the public as possessing special skills in their profession. It was created primarily to protect against liability that may arise from claims made for rendering or failing to render, services within the context of your profession. This product provides coverage for claims the insured is legally obligated to pay as a result of a wrongful act, error or omission.

·         Limits start at $300,000 each claim with options up to $2,000,000.  Defense costs are also included.  The minimum deductible is $2500.  Ask about options for 3-year policy or higher deductible policy savings and coverage for prior acts. It is important to see specific exclusionary wording.

( The information and descriptions contained in this site are intended as general information and are not necessarily complete descriptions of all terms, exclusions and conditions applicable to the products offered by the  Hartford/Loomis & Co., Insurance Services program.  The information contained in this web page is not an insurance policy or contract of insurance and may not be available in all states.)  

 INTRODUCING THE  BUSINESS  INSURANCE PROGRAM FOR CERTIFIED COACHES:

This is a plan of protection offered by the Hartford Insurance Company.

It’s easy,  just  Call 877-492-5142 (toll free) for eligibility and your personal quote.

 The HARTFORD SPECTRUM PROGRAM  offers a variety of insurance  coverages needed by the professional coach  all in one policy. The  program is specifically designed to include the option to purchase