Tutoring Companies Need Insurance – But What Kind?

Tutoring companies face the not uncommon risk of lawsuits and insurance claims - a good reason why every smart tutoring company (and many tutors) should know why it’s important to know what you can insure – and why.

Like any business, tutoring companies have to be attuned to risks common to their line of work, especially when offering a professional service.

Buying insurance reduces or prevents the worst from happening if anything does happen, from a client or third party suffering a bodily injury to a legal claim for professional negligence or misconduct. All of these risks should be taken seriously, in light of the time and cost any business can lose to dealing with such claims.

So, what insurance do tutoring companies need? There are four types of insurance policies to look into:

1. Professional liability insurance – sometimes called “errors and omissions” insurance, professional liability insurance protects a tutor from work-related claims.

Work-related claims include for professional negligence, or malpractice: where a tutor fails to provide a duty of care owed to a student. (It’s important to know that professional negligence isn’t just when a tutor fails to do something, like achieve a desired outcome for a student.)

But still, claims, legitimate or not, are expensive – and professional liability insurance covers both. Whether it’s for professional negligence or any number of work-related claims, professional liability insurance ensures that tutoring companies are adequately protected when any claim arises.

What’s more, professional liability insurance will generally cover all legal expenses related to a claim, including lawyers’ fees, court costs, and any settlement or judgment.

Some professional educators may have access to insurance policies through their school district or the NEA. But that insurance doesn’t apply outside of their professional responsibilities within their job. If that educator is also a tutor outside their school district, the insurance won’t cover any claims related to their tutoring.

2. General liability insurance – also called commercial liability insurance, general liability insurance covers a tutoring company’s liabilities for any bodily injuries or damage caused to your property.

If your tutoring company rents or owns a commercial space, it’s critical (and, depending on your state and landlord, required) that you obtain general liability insurance. You’re covered when, say, a client or stranger slips on your property. Medical and legal costs are generally paid for as well.

Some insurance companies also offer a business owner policy, which combines professional and general liability policies in one package suitable for small businesses.

3. Workers compensation insurance – your tutoring company may need to purchase workers compensation insurance, depending on the state in which your business operates and the size of your staff (including associate tutors and admins).

Workers compensation is basically a no-fault insurance fund for claims made by your employees for job-related injuries and illnesses.

4. Commercial property insurance – if your business owns equipment, such as computers and other electronics, it’s wise to take out insurance to cover the value of your business’s equipment in the event that equipment is lost, damaged, or stolen.

Investigate early on what insurance is right (or required) for your tutoring business. That will save you the trouble and potential ramifications you or your business might face later.

In the end, the decision comes down to weighing the possible risks against the relative costs and benefits of each type of insurance. For most tutoring companies, the benefits of buying adequate insurance may be well worth the costs.