Wondering about what insurance is right for you as a life coach? Read on to find out more!

The demand for life coaching services has increased significantly in the last few years, and with that demand has come great opportunities to start your own coaching business. But just like other small business owners, you need to protect your venture from any unforeseen risks and financial damages. That’s where life coach insurance comes in!
Whether you’re looking to switch your insurance package to something more suitable or it’s the first time you’re hearing about the need for insurance as a life coach, we’ve gathered information on everything you need to know to make the right decision.

This article will answer several questions that you may have, including:

  • What is the difference between therapy and life coaching?
  • Does insurance cover life coaching?
  • Why do life coaches need insurance?
  • What types of insurance do life coaches need?
  • How much does insurance cost for life coaches?

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What is the difference between therapy and life coaching?

If you’re in the early stages of starting your small business, you may be wondering what the difference is between therapy and life coaching. While we may think of life coaching as a form of therapy, there is in fact a difference between the two (especially when it comes to what your health insurance may cover).

Therapy, also known as psychotherapy, is a type of behavioural healthcare that is focused on the diagnosis and treatment of psychiatric disorders. It can also be used for personal growth and relationship improvement. However, when you get involved in therapy, the basic assumption is that you are there for the treatment of a mental illness by mental health professionals.

On the other hand, any type of coaching, whether it’s life coaching, dating coaching, relationship coaching, or career coaching, is for the purpose of helping you grow as a person. Coaching aims to help you achieve desired goals and outcomes through a process of gaining self-awareness, developing strategies and skills, and taking actionable steps forward.

Essentially, coaching assumes that you are fundamentally healthy and that you just want to make some positive changes in your life. Therefore, coaching is never considered a “medically necessary treatment” for a psychiatric condition.

However, therapy and life coaching differ most in the fact that therapy is a regulated profession and coaching is not. Therapy can only be conducted by a therapist that is qualified, licensed, and registered to practice behavioural healthcare in Canada. In contrast, coaching is not a regulated profession and there are no requirements around who can provide coaching services.

Does health insurance cover life coaching?

Since medical costs can be high, you may be wondering if life coaching falls within your health insurance coverage. The short answer is no. Since coaching is not considered “treatment” for anything and is not a “medically necessary treatment,” your health insurance will not pay for coaching.

Why do life coaches need insurance?

Now that we’ve discussed some key differences between therapy and coaching, it becomes possible to understand why life coaches need insurance coverage for their small businesses.

Life coaches provide professional advice and guidance to their clients, but do they have liability? Life coaching is a highly unregulated industry and there are no legal requirements to start your practice. However, while life coaches are not responsible for how their advice is taken and implemented, it does not mean that they won’t face lawsuits from clients who raise claims against them.

While a sound contract can set the right expectations beforehand and provide a good reference point for any legal conflicts, a life coach would still need to cover the expenses of hiring a lawyer (even if the case has no basis). This is where liability insurance for life coaches comes in handy!

You may be wondering: do I need insurance to practice as a life coach? If you want to be financially protected, the answer is yes. Insurance protects your small business from liability claims, injury or property damage, and even business interruption. Any of these could bankrupt you and your business without the right insurance coverage.

What types of insurance do life coaches need?

Every company should have insurance to protect them from any unforeseen difficulties that can result in potentially crippling fees, and a coaching business is no different. Insurance covers your small business if you’re sued for performing professional services, even if you haven’t done anything wrong.

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

1. General Liability Insurance

This policy protects your business from any accidents or injuries that may occur within your facility. If a client makes claims against you for bodily injury, damage to property, or personal injury, then you’ll be covered! Commercial general liability insurance covers the costs of a lawsuit, the damage caused, and any medical expenses that a client may need to pay.

2. Professional Liability Insurance

Professional liability insurance protects your business if you’re sued for negligently performing your services, even if you haven’t done anything wrong. This policy is essential as any life coach can be sued for harassment, breaking the confidentiality clause in their agreement, or causing harm with their advice. Professional liability insurance 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.

3. Commercial Property and Auto Insurance

Commercial property insurance and commercial auto insurance protect the assets that belong to your business. This may include, but is not limited to, 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. Whether it’s an accident, theft, break in, or a small fire that causes damage to your property, this type of insurance will cover the costs.

4. Cyber Liability Insurance

Online life coach insurance 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. Cyber liability insurance covers the costs that can come from data breaches and cyberattacks.

5. Workers Compensation Insurance

Workers compensation insurance will protect your business and your employees from any work-related accidents, illnesses, and deaths. Even if you only have one employee, you will need insurance to cover medical costs and lost wages.

How much does insurance cost for life coaches?

Insurance policies are as unique as your business. As such, insurance costs can vary depending on the specific needs of you and your business. Contact APOLLO Insurance today to speak with one of our advisors and get a quote for custom coverage that’s suited to you and your business.


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