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Telehealth Liability Insurance: A Coverage Checklist

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Marcus Reilly Practice Operations Editor 15 min read
Outline

Telehealth liability insurance checklist

Telehealth sessions

  • Coverage question: Does this policy cover a psychotherapy session you furnish by video, and does the same grant cover audio-only?

  • Why it matters: A carrier can say telehealth is included and still tie the grant to your scope of practice and to the laws that apply. On its counselor page, HPSO says coverage includes telehealth, subject to scope of practice and applicable state and federal laws, regulations, and guidelines. On its highlights page, CPH says professional liability follows you in the 50 domestic states wherever your license allows you to practice, including telehealth. Those are two carriers’ sentences. They are not a rule for every policy you might hold.

  • What to ask the carrier: Is telehealth inside the professional liability limit you already bought, or an endorsement you still have to add? Does the grant include video and audio-only? Which exclusion would take a video session outside the policy?

Clients sitting in another state

  • Coverage question: If the client is physically in another state during the session, does the policy still apply, and does that depend on your license authority in that state?

  • Why it matters: Your own move is not the same fact as a client sitting somewhere else. HPSO describes portable coverage as staying with you if you take a second job, change jobs, or move. CPH ties portable coverage, including telehealth, to wherever your license allows you to practice. A video hour with a client in a state where you are not authorized to practice is a license question first. Confirm that authority with the interstate telehealth rules for therapists, then ask the carrier whether the policy follows that authority.

  • What to ask the carrier: If the client is physically in a named state and you are authorized to practice there, is the session covered? If you are not authorized there, is the session excluded even when the brochure says telehealth is included?

The license-defense limit

  • Coverage question: What dollar limit pays for a licensing-board complaint, and is that limit separate from the malpractice limit?

  • Why it matters: A board complaint is not the same event as a malpractice suit, and the defense dollars are often a sublimit. HPSO’s counselor page describes licensure defense expense reimbursement up to $25,000 in aggregate for legal representation arising out of a covered licensure incident. CPH’s highlights page describes state licensing board defense coverage up to $35,000 per year, with options to raise it to $75,000 or $100,000 for an added premium. Those amounts are not interchangeable. Neither one is your benefit until the declarations page says so.

  • What to ask the carrier: What is the license-defense or board-defense limit, is it per year or an aggregate, does it pay defense only or also fines, and does a complaint about a video session use that same limit?

Cyber and data-breach coverage

  • Coverage question: Does this policy pay for a client-data breach, notification costs, or a HIPAA proceeding, or is that a separate endorsement?

  • Why it matters: A malpractice limit and a privacy benefit are different grants. HPSO’s counselor page describes a HIPAA proceedings benefit that helps with patient notification expenses up to $25,000 and, where permitted by law, fines or penalties assessed in a HIPAA proceeding. That page says fines and penalties are not available in New York. CPH sells cyber liability as an endorsement on a CPH professional liability policy, not as a standalone policy. CPH’s cyber page, dated June 29, 2017, with a May 2022 availability note, lists security-event costs, network security and privacy liability, customer notification, and public-relations expenses. That page says the coverage does not include extortion or ransomware, and that it does not cover loss of personal property. Outside New York, CPH lists an $87 option and a $141 option. New York is priced separately on that page. As of May 2022, CPH said the endorsement was not available in Alaska, North Dakota, and New Mexico. Confirm the current endorsement before you treat those figures as your benefit.

  • What to ask the carrier: Is cyber or data-breach coverage on this policy today, or do you have to add it? What is the sublimit for notification, and what is the sublimit for a privacy claim? Does it cover ransomware? In which states will the carrier sell it?

You already hold a malpractice policy, or you are about to buy one. The open question is whether a video hour, a client sitting in another state, a board complaint, and a lost laptop are inside that contract. Telehealth liability insurance is the name of that check. Do not assume every carrier sells it under the same words.

Use the four questions above on the policy in force, not on a sample brochure. If you are comparing the ACA-endorsed HPSO program as a purchase, start with the ACA liability insurance guide. The questions still apply after you bind that policy. An association endorsement is not a substitute for the declarations page.

Read two carriers before you generalize

HPSO and CPH both sell professional liability to counselors and other mental-health clinicians. Their public pages do not match. Treat the table as a reason to call, not as your coverage. Telehealth liability insurance is whatever your issued policy says, not the row that happens to look familiar.

Carrier pageTelehealth grantLicense-defense figurePrivacy or cyber benefit
HPSO counselor policyIncluded, subject to scope of practice and applicable lawUp to $25,000 aggregate reimbursementHIPAA proceedings benefit; notification up to $25,000
CPH highlights and cyber pageFollows you where your license allows practice, including telehealthUp to $35,000 per year; higher options soldOptional endorsement, not a standalone policy

HPSO also says policy terms may vary by state and are subject to state approval, and that a coverage interpretation does not predict the outcome of a claim. CPH’s cyber figures are the figures on a 2017 page with a May 2022 availability note. If your carrier is neither of these, the table does not describe you. Ask the same four questions anyway.

Does malpractice insurance cover telemedicine

Shoppers still type that question, and they still type telemedicine malpractice insurance. The useful answer is narrower than a yes. On the HPSO and CPH pages linked below, telehealth liability insurance is a grant inside the malpractice policy, not a separate video-only contract.

On those carrier pages, telehealth sits inside professional liability rather than in a policy you buy only for video. HPSO says the counselor policy includes telehealth, subject to scope and law. CPH says the portable grant includes telehealth where your license allows you to practice, for both employed and self-employed clinicians. A physician carrier’s telemedicine policy is a different contract. Do not paste that wording onto a counselor policy, and do not assume an older telemedicine endorsement and a current telehealth grant are the same clause.

Ask the carrier to say, in writing, whether video and audio-only are both inside the limit you already pay for. If the answer is “telehealth is included,” ask what that sentence excludes. Scope of practice, the state where the client sits, and a missing endorsement are the three exclusions worth naming on the call.

HPSO’s counselor page also cites an average total cost of $157,492 for a malpractice lawsuit against a counselor, from the CNA and HPSO counselor liability claim report. That figure is a reason to know your limit. It is not your expected loss, and it is not a premium.

What the premium actually tells you

Telemedicine malpractice insurance cost is the quote for your license, state, hours, and claims history. Neither HPSO’s counselor page nor CPH’s highlights page publishes a base premium you can copy into a budget. CPH’s cyber page lists add-on prices of $87 or $141 per policy year outside New York, and $196 for the New York option. Those figures are not the cost of telehealth liability insurance. They are the price of one optional endorsement, and only if the carrier still sells it in your state.

When you request a quote, ask for three numbers on one page: the professional liability premium, the license-defense sublimit and any extra premium to raise it, and the cyber or HIPAA-proceedings premium if that benefit is not already included. A low professional liability premium that omits board defense and breach response is not the cheaper policy. It is a thinner one.

If you bill insurance for the session, the payer’s telehealth rules are a separate check. Coverage on a claim form does not put the hour inside your malpractice policy. Keep the payer preflight on the insurance billing for therapy guide. Keep the carrier questions on the call sheet above.

Clients in another state

Run the license check before you argue with the carrier about geography. The interstate telehealth rules page is the preflight for where the client sits, which license you hold, and whether a compact privilege is actually live. Come back to the carrier with those facts already written down.

Then separate two sentences that sound alike. “The policy is portable if you move” answers a question about you. “The policy follows a client who is sitting in another state” answers a question about that hour. HPSO’s portability sentence is about your job change or your move. CPH’s portability sentence includes telehealth and stops where your license stops. If your carrier uses the first kind of sentence, ask the second question in those words. Do not treat a moving-with-you clause as permission for a client on vacation.

If you are not authorized where the client will sit, pause the video slot until you are, or arrange care the client can use there. A carrier’s telehealth sentence will not repair a missing license. Record the client’s location the same way you record it on the telehealth consent form. A signed consent is not a coverage grant. It gives you the location, the modality, and the emergency plan the carrier will ask for if a complaint names the session.

The license-defense limit is a sublimit

Clinicians shop the $1 million figure and skip the board line. HPSO’s counselor page lists professional liability limits up to $1,000,000 per claim and $3,000,000 annual aggregate, and a separate licensure defense reimbursement up to $25,000 in aggregate. CPH’s highlights page lists up to $1 million per claim, with $3 million and $5 million aggregates available, unlimited defense costs that do not reduce the liability limit, and a board-defense figure of $35,000 per year. The suit limit and the board limit are not the same bucket on either page.

Ask which bucket a licensing complaint uses, and whether a complaint about a video session, a cross-state session, or a privacy incident falls inside it. Ask whether the limit is defense only. Ask whether fines are covered, and in which states they are not. HPSO’s HIPAA proceedings language already carves New York out of fines and penalties. Your license-defense line may have its own carve-out. Get it read to you from the issued policy, not from a national brochure.

If you expect board exposure because you practice across state lines, price the higher board-defense option before you need it. CPH sells increases to $75,000 or $100,000 on its highlights page. That option is CPH’s, not a market standard. Ask your carrier whether a higher sublimit exists, what it costs, and whether it can be added midterm.

Cyber coverage is often an endorsement

A video platform, a client portal, and a laptop in a car create a different loss than a malpractice allegation. Do not assume the malpractice limit pays for notification letters, credit monitoring, or a privacy suit.

On HPSO’s counselor page, the privacy-related grant described is a HIPAA proceedings benefit: patient notification expenses up to $25,000, and fines or penalties where the law permits them to be insured. That is not the same product as a cyber endorsement. On CPH’s cyber page, cyber liability is an add-on to a CPH professional liability policy. It is not sold alone. The page lists security-event costs, damages you are legally obligated to pay from a security or privacy breach, customer notification, and public-relations expenses. It excludes extortion and ransomware. It does not cover loss of personal property.

Two practical consequences follow from those pages, and only from those pages. First, “we include HIPAA coverage” can mean a proceedings benefit with a notification cap, not a cyber endorsement. Ask which document you would tender after a breach. Second, a cyber endorsement can be unavailable in your state even when the malpractice policy is available. CPH’s May 2022 note named Alaska, North Dakota, and New Mexico. Ask your carrier for the current list, and do not rely on a 2022 footnote as today’s map.

If you store recordings, transcripts, or intake packets on a vendor platform, ask whether a breach at that vendor is your claim, the vendor’s claim, or neither. The carrier pages cited here do not answer that vendor question. The call sheet is where you write the answer you actually get.

Employer coverage and the practice entity

A W-2 job does not retire the question. HPSO’s counselor page says coverage offered through your employer may leave gaps. Ask the employer carrier, in writing, whether you are a named insured or only a person the employer may choose to defend. Ask whether a board complaint against your license is inside the employer’s limit. Ask whether telehealth you furnish on a side caseload, or after you leave, is inside that policy at all.

If you have formed an LLC or a professional corporation, ask a second question. CPH’s private-practice page says an individual policy will not cover the business entity for claims arising from your professional services, even when you are the sole owner, and that you cannot add a business you own as an additional insured. CPH’s remedy on that page is a corporate policy. That is CPH’s underwriting position, not a rule every carrier uses. Ask yours whether the entity needs its own limit, and whether a shared limit with you is enough when both names appear on a complaint.

Write the entity name, the individual name, and the employer name in three separate lines on the call sheet. A single “the practice is covered” from a broker is not an answer you can file.

What to write down after the call

A phone assurance expires. The note you can use later has six lines, and you can copy them from the call sheet. That note is your telehealth liability insurance file for the client whose location triggered the call.

  1. The policy number and the date the carrier answered.
  2. Whether video and audio-only are inside the professional liability limit.
  3. Whether a client in a named state is covered, and which license fact that answer used.
  4. The license-defense dollar limit, and whether it is per year or an aggregate.
  5. Whether cyber or HIPAA-proceedings coverage is on the policy today, the sublimit, and any state where it is not sold.
  6. The document that will prove it: an endorsement, a revised declarations page, or an email from the carrier that quotes the form number.

Store that note with the chart for the client whose location triggered the call, and in the practice file where you keep the policy. If the carrier will not confirm in writing, do not treat the phone call as the grant. Pause the cross-state slot until the writing arrives, or keep the client in a location you have already cleared.

Review the note when the policy renews, when you add a state, when you change platforms, and when a client travels. A renewal can drop an endorsement you added last year. The call sheet is short enough to rerun.

The names and the dollar line in that note are a filing example, not a determination by HPSO, CPH, or any other carrier. Your call produces your numbers. If the written answer conflicts with the phone answer, keep the writing and call again.

Keep the written answer with the chart

The coverage note is useless if it lives in a personal inbox. Put the carrier’s email, the form number, and the session decision where the next clinician or biller can find them beside the encounter. File the telehealth liability insurance answers with the consent and the session, not in a side folder. If you want that record in one chart, start a free trial.

Renew the check when the client travels again. A cleared Tennessee hour does not clear an Ohio hour, and a cleared Ohio hour does not clear the next state.

References

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