Counselors and therapists face significant liability risks that are unique to their profession. Allegations of improper sexual or romantic relationships are a leading allegation in malpractice cases.

  • Informed consent and documentation are important defensive tactics.
  • It is important to defend against board complaints.
  • Failing to report to third parties can create liability risks.

Counselors face substantial liability risks that may not receive as much attention as other healthcare professionals, and the exposure may be increasing.

The authors of a closed claim report published jointly by the Healthcare Providers Service Organization (HPSO), a division of Aon Affinity, and the insurer CNA, with the support of the American Counseling Association, found that $7.8 million was paid for counselor malpractice claims over a five-year period. The Counselor Liability 2019 Claim Report found that $8 million was paid during the previous 10 years.

The average total cost of malpractice claims was $113,642. Reports of sexual or romantic relationships accounted for 43.9% of malpractice allegations. The average license defense cost was $5,454, up from $3,727 in the 2014 report. There was a sharp increase in deposition assistance and record request matters, up 456% from the 2014 report. (The report is available online at: https://aon.io/30y7td9.)

The allegations of improper sexual or romantic relationships continue to be a primary concern with this group of professionals, notes Jennifer Flynn, CPHRM, manager in healthcare risk management with Aon in Fort Washington, PA. These allegations also were a leading cause of claims in 2014, and there is no indication that the profession is better addressing the problem, she says.

Because it is an ongoing problem, Aon published a guide to help counselors establish boundaries with patients. (The guide is available online at: https://bit.ly/2O4oJpp.)

Other allegations involved not practicing within boundaries of competence, sharing confidential information, and reporting to third parties.

“A lot of these claims involve the informed consent process, which we emphasize with the patient up front, discussing what will come out of the counseling process and what won’t be addressed,” Flynn says. “It also is important to address the policies and procedures of the counseling process so the patient has a good understanding of what he or she can get out of the relationship.”

Complaints against a counselor’s license were more frequent and severe in the latest research, Flynn notes. Counselors are spending $5,400 to defend a claim, she notes. Sexual indiscretion also was a top allegation with board complaints.

“It is important for counselors to defend themselves against board complaints,” Flynn says. “Unlike the professional liability lawsuit, in which a court will compensate a plaintiff with a monetary award, the counselor in a license disciplinary event can face various sanctions ranging from continuing education sources all the way to license revocation. We emphasize the importance of defending yourself against these board complaints because the sanctions can be so severe.”

Risk managers can remind counselors to be mindful of the laws and regulations that govern their interactions with patients, Flynn suggests. Those may include requirements for mandated reporting to third parties and the time frame in which those reports must be made.

“Documentation is always an important consideration,” Flynn says. “It provides the counselor with a defense when the client alleges something that could lead to a lawsuit. It comes down to ‘he said, she said’ a lot of times, and we depend on that documentation to show that the counselor took a particular action related to that client’s course of care.”


  • Jennifer Flynn, CPHRM, Manager, Healthcare Risk Management, Aon, Fort Washington, PA. Email: jennifer.flynn@aon.com.