Often, but not automatically. Before seeing a client in a new state, ask your carrier in writing whether your policy covers telehealth clients located in that state, practice under a Counseling Compact privilege, services delivered while you travel, and licensing board complaints in every state where you hold a license or privilege.
Counselors spend weeks on a second license and about thirty seconds on whether their malpractice policy follows them there. The policy usually does. "Usually" is not what you want to rely on if a client in the new state files a claim or a board complaint, so ask.
Why might a policy not cover another state?
Professional liability policies define what they cover by the services you provide, the license you hold and sometimes the territory where services are rendered. Older policies were written for a counselor in one office. Telehealth and multistate licensure raise questions those forms did not anticipate: Is a session with a client in another state covered? Are you covered for practice under a Counseling Compact privilege, which is not a license? Does the policy follow you if you deliver sessions while traveling?
Policy forms differ by carrier and by year, and the counselor down the hall may have a different answer from yours. The point is to get your answer in writing for your policy.
Five questions for your carrier
- Does my policy cover counseling services provided by telehealth to clients located in states other than the one where I live? Name the states.
- Does it cover practice under a Counseling Compact privilege to practice as well as under a license?
- Does coverage depend on where I am physically located when I provide services? This matters if you travel or ever practice from outside the US.
- Does the policy include licensing board complaint defense, and does it apply to boards in every state where I hold a license or privilege? A board complaint is far more likely than a lawsuit, and defending one in a second state is real money. Check whether that coverage has its own, lower limit.
- Is the policy claims-made or occurrence, and if claims-made, what happens to coverage for past work if I change carriers or retire? Multistate practice does not change this question, but it raises the stakes.
Ask by email and keep the reply with your policy. A phone representative's reassurance does not travel well.
Do any states set their own coverage requirements?
Some do for particular routes. Florida is the clearest example for counselors: to register as an out-of-state telehealth provider under section 456.47, you must maintain professional liability coverage or financial responsibility that "includes coverage or financial responsibility for telehealth services provided to patients not located in the provider's home state." The department then publishes your coverage information. If you are using that route, your carrier's answer to question 1 must specifically include Florida. See Florida's telehealth registration.
Employers, group practices and insurance panels also set minimum limits in their contracts. Those are contractual, not licensing, requirements, but they bind you just the same.
What should you update when you add a state?
- Tell the carrier about each new license or privilege and get the confirmation.
- Update your CAQH profile with a current certificate if you are paneled; see CAQH for counselors.
- Review your telehealth informed consent for the new state's requirements.
- Put the policy renewal date on the same calendar as your license renewals.
White Glove MFT covers the same territory for marriage and family therapists in malpractice insurance for multistate practice. We do not sell insurance or recommend carriers. We do keep track of which states you are authorized in, which is the list your carrier will ask for; our renewal and compliance service keeps it current.
Common questions
- Do I need a separate malpractice policy for each state I'm licensed in?
- Usually not. Most counselors carry one policy, but you should confirm in writing that it covers clients located in each state where you practice and board complaints in each of those states.
- Does malpractice insurance cover practicing under the Counseling Compact?
- Many policies do, but privileges are new and a privilege is not a license. Ask your carrier specifically whether practice under a compact privilege is covered, and keep the written answer.
- Does Florida require malpractice coverage for out-of-state telehealth counselors?
- Yes, for its out-of-state telehealth registration. Section 456.47 requires coverage or financial responsibility that includes telehealth to patients outside your home state.
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