I know coaches who have insurance, and I know coaches who do not. There are a lot of reasons some coaches don’t have insurance. One reason is they don’t have many clients. Another reason is that their clients aren’t the type of people who often sue. A third reason is that they feel like the risk is minimal.
In my many years of coaching and training coaches, I don’t know any coach who has ever been sued. That does not mean it hasn’t happened or won’t happen to you. Or worse, to me!
The International Coaching Federation has a video on this topic. It is an important resource that every coach should watch.
Kristin Kelly, the assistant director of ethics, policy and compliance for the ICF interviewed Bob Weil, the legal counsel for the ICF. In this video, Bob says you should have insurance. I think in general, he’s right, but I also wonder what size your coaching business should be before you take steps to protect it.
As part of protecting myself, I wondered if it was time to set up an LLC (limited liability company). If a business has an LLC, the members of this company are not personally liable. In simple terms, you can’t lose your house. To my surprise, when I approached both a lawyer and an accountant, they thought an LLC was unnecessary for my situation. Two reasons they gave were that I didn’t make enough money yet and that I didn’t have any employees.
NOTE: My official position is you should do everything possible to avoid liability. Don’t sue me if you get sued. (This is both a joke and not a joke.)
Here are a few nuggets from Bob Weil from the ICF video:
- The question to ask yourself is “How much risk are you willing to accept?”
- You need liability insurance.
- You need to meet with your insurance professional in person once a year.
- Read your policy to see what it covers and what it does not cover.
- If you have a claim, report it immediately.
- It does not cover criminal activity, intentional acts, recklessness, fraud, malice, or services to professional athletes.
- If you live outside the US, you should still have insurance.
- If you are a business owner, set up an LLC.
- The ICF does not require members to have insurance.
Here’s my challenge to you: Make a decision about insurance.
Don’t default to no insurance because you’ve never accessed your risk. Talk to a lawyer. Talk to an accountant. Talk to an insurance agent. If you decide not to have insurance, then understand that if you get sued, you are on your own. No one is going to come and help you. Some people can live with that risk. Most people cannot.