Key Takeaways from The Counselor Claim Report

Counselors are crucial to the mental healthcare community. And over the past few years, the profession and their roles have evolved and expanded as more people seek mental health treatment. Today patients and healthcare providers increasingly rely upon counselors’ knowledge and experience to help ensure safe and effective care. However, this additional responsibility can translate into greater risk. 

To help you navigate these changing professional risks, HPSO and CNA have released the Counselor Professional Liability Exposure Claim Report: 3rd Edition. The goal of the report is to equip counselors with data and tools that can help them enhance their practice and minimize their professional liability exposures. This valuable resource looks at claim cost trends over time, practice-specific risks, trending allegations, risk management best practices and more.
 

Here are the top findings from the report:

• Counselor malpractice claim costs are increasing. The average cost of a malpractice claim against a counselor is $157,492 – a 40% increase from the 2019 dataset.
• Malpractice claims with high settlements are becoming more common. The percentage of claims with payouts of $500,000 or more has grown significantly, from 1.4% of the 2019 dataset to 7.0% of the 2024 dataset.
• Private-practice related malpractice claims are becoming more common. Private practice-related claims increased from 10.1% in the 2019 dataset to 21.9% in the 2024 dataset.
• More malpractice claims are occurring outside of the “traditional” office setting using virtual technology. In 2024, 3.9% of malpractice claims involved telebehavioral health counseling.
• Claims related to telebehavioral health show a high risk of severe losses and more unfavorable outcomes for insured counselors. The total incurred – the combined cost of the payout and related legal expenses – for telebehavioral claims cost an average of $317,516.
• Violations of the counseling relationship continue to lead in all malpractice claims. Allegations related to breaches of the ACA Code of Ethics, section A, remained the most common type of claim in both 2019 and 2024.
• Malpractice claims related to evaluation, assessment and interpretation are rising. Allegations in this category (ACA Code of Ethics, section E) accounted for 9.4% of claims in 2024, with an average total incurred loss of $460,671.
• Subpoena assistance matters are a significant factor in claim payments. They represent nearly two-thirds (66%) of the claims that closed with payment.
• The average payment for license protection matters has remained stable. It increased by just 1.3%, increasing to $5,524 in the 2024 dataset.
• Common issues lead to licensing board complaints. Sexual misconduct, failure to maintain professional standards, and breach of confidentiality were the most frequently reported licensing board complaints.
• Most license protection matters result in no action from the Board. A total of 64.6% of cases closed with no action taken, indicating a successful defense for the insured counselor.