Business Insurance for Psychics
It’s important to get business insurance for psychics straightened out before any trouble starts, if you are engaged in business as a psychic practitioner, medium, hypnotist, tarot card or palm reader, or faith healer.
While it is true that business has been booming for several years, there has also been an uptick in the number of cases where lawsuits have been launched claiming some form of malpractice or damage.
In this short article, we will try to set out what areas of insurance you should be focussing on and how much you should be budgeting.
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Each main section of the insurance market that you need is explained below.
Required insurance for your psychic business
Every business is different, and this is especially true for highly specialized activities like psychic consultations, tarot card or palm reading, and healing.
For this reason, we cannot specify specifically what your particular insurance needs are.
We don’t make a definite recommendation of what levels of cover you should be taking out.
Small Business General Liability Protection:
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The table below lists average insurance requirements and costs for small businesses such as psychic practitioners.
|Insurance type||Basic level of cover||Expected range of annual premium|
|General Liability||$2 million full year
$1 million for a single claim
|$450 – $700|
|Errors & Omissions||$100,000 full year
$30,000 single claim
|$750 – $1200|
|Commercial auto insurance*||Per replacement cost||$1500 – $2000|
|Commercial property insurance*||As per value||$800 – $1200|
|Digital Liability||$10,000||$120 – $200|
|Business Interruption||$10,000||$200 – $350|
|BOP insurance*||As per value of property||$800 – $1200|
*These are totally dependent on the value of the assets being insured
Where do you start to find the right insurance for your psychic business?
Suppose you are only now starting up your psychic consulting as a business or have never considered the need for insurance before.
In that case, it is a good idea to check around with the insurance agents and brokers that operate in your city.
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Talk to your bank, and get some advice from lawyers whether psychics need licensing, which is already the case in some counties in Nevada, or police permits, as is the case in San Francisco.
A different rule may apply to where you intend to open a shop.
Check in the US Government Small Business Administration website to discover what is relevant for you.
What are you insuring in your psychic business?
Errors and Omissions
Errors and Omissions insurance gives you protection in case something unexpected or unavoidable happens as a result of your business dealings with a customer.
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For someone interacting with members of the public all the time, who are coming for help in managing their own lives, problems and hopes, they bring with them a very high level of expectation and even though you may be providing them with the best possible service, the end result can be a dissatisfied and unhappy customer who claims that you acted wrongly, or in bad faith, and launches a lawsuit against you.
There was a case just a few months ago where a man in Los Angeles sued his psychic in a Property Fraud lawsuit.
Since this case is still pending, there’s no way of knowing how it will end up for the psychic practitioner.
In the meantime, if she doesn’t have the right insurance, she is having to defend the lawsuit at her own expense.
If it goes against her, she will have to meet not only her own legal costs, but the plaintiff’s legal fees as well as any damages awarded – and there are no limits to how much a jury can award when they are judging on emotional issues like this.
The policy will defend you and your business in any claims of negligence and financial loss arising from mistakes or omissions in the delivery of your services (errors and omissions).
The most important feature for you is that defense against any claim is the insurance company’s responsibility.
This means that you are guaranteed expert legal advice and actions at the company’s cost, regardless of the outcome.
General Liability insurance policy protects your business from claims by a third party alleging some injury or damages not directly related to your services, or copyright infringement and advertising claims.
For example, if a client visits your home where you are conducting your psychic business for a consult, together with a family member, and that relative (the third party) trips over a loose carpet or steps in the entrance, then you can be sued for any consequential damages, including medical costs, emotional stress, lost income, rehabilitation expenses etc.
Similarly, suppose you are conducting your business in a commercial site, then the moment anyone steps across the front door into your domain.
In that case, you have the ‘duty of care’ that leaves you liable in case of any accidental injury or loss that may be attributed to your negligence.
Cyber liability insurance covers any claims by customers or other third parties that information relevant to them and disclosed professionally to you in consultation has been released into the public domain.
For example, if details published in a blog were derogatory of someone else, or provocative.
In any instance where information in your care is stolen, it will pay for any extortion costs, along with any valuable business data lost.
In the event of digital disruption, you can claim of lost income.
In any event where normal psychic business operations are halted because of a defined event, your normal running expenses that must still be paid, such as rent, utilities, interest on mortgages or bank loans etc. plus a reasonable income, are reimbursed under this policy.
Events like a fire, earthquake, severe weather and other natural hazards are the normal scope of designations.
When you are operating your psychic business out of dedicated premises, whether it’s a reserved room inside your home, or is owned or rented commercial space, you should be taking out a Commercial Property policy.
It should insure the property’s value against natural occurrences like fire, weather storms, earthquakes, and human acts like vandalism, sabotage, and arson.
Business Owner’s Policy (BOP)
A BOP combines the main elements of General Liability, Commercial Property, and Business Interruption insurance.
It protects your physical assets as well as your business’ economic value.
It can be an excellent alternative option to separate insurances because it gives increased coverage and is generally cheaper than different policies.
Other special insurances
If you employ full-time, part-time or casual workers, you are probably required to carry Workers Compensation insurance.
The rules, rates and levels are set individually in each state.
Workers compensation covers you in cases where an employee suffers some work-related accident or illness.
They can claim for lost wages and costs of any resulting medical treatments, along with rehabilitation.
In many states, workers compensation insurance also gives you employer liability coverage.
Suppose you use a private vehicle to travel to and from psychic consultations.
In that case, you need to replace your personal auto insurance with a commercial auto policy, since most private car insurance explicitly excludes business-related claims.
Commercial auto insurance provides the same coverages for collision, theft, medical and third-party.
Suppose you have followed the advice of most consultants in setting up your psychic practice and incorporated it as a Limited Liability Company (LLC).
In that case, you should also take out Directors & Officers insurance, which provides coverage for your personal assets in any case where your decisions in running the company may be challenged in a court case.
Suppose one aspect of your psychic business is arranging, organizing, or participating in public events and gatherings.
In that case, special events insurance may be necessary.
It provides coverage in situations like event cancellation, injury to guests, alleged breach of contract, or damage to the event location.
Where did the boom in psychic business come from?
Business is booming for mediums, psychics, palm and tarot card readers and hypnotists because more people seek guidance in times of change or uncertainty.
And the revolution in technology means instead of meeting face-to-face, new clients are flooding in over channels like Zoom, FaceTime and Skype.
For some psychics, work has almost doubled because of this changing time and the number of people looking for a new spiritual connection.