In recent years, ketamine has emerged as a promising and effective treatment option for various mental health conditions, including depression, anxiety, and post-traumatic stress disorder (PTSD). Two popular methods of utilizing ketamine for therapeutic purposes are Ketamine IV Infusion Therapy (KIT) and Ketamine-Assisted Psychotherapy (KAP). Both have shown positive outcomes, but they differ in their administration, licensing, and compliance frameworks.
What many ketamine clinics and wellness centers do not realize — until they are
faced with a legal claim — is that their insurance policies may only cover certain types of ketamine treatments. It is crucial for any health professional administering ketamine to understand the different types of insurances needed to protect their business based upon the treatments offered.
In addition to the threat of malpractice claims, KAP practitioners need to understand other major risk factors, which include:
Bodily and property damage incurred by a patient or employee while on the premises.
HIPPA violations resulting from data breaches & cybercrime.
Unlawful employment practices, including claims of sexual assault.
Securities litigation/wrongful acts in managing the company.
In this guide, R&A PSYINS, an independent insurance broker that focuses exclusively on the psychedelic medicinal industry, discusses the various professional liability coverages, factors affecting coverage, and how ketamine clinics can ensure they are fully protected from medical malpractice and other legal claims.
Business Liability Coverages:
General Liability Insurance. Given ketamine’s “off-label” status, practitioners are at high risk for legal claims for a variety of reasons. Whether you offer KIT or KAP, General Liability Insurance is the most essential coverage your business needs to protect you from accidents, property damage, or injuries that may occur on your premises. It can also protect against claims involving slander, libel, and copyright infringement. Your General Liability policy acts as a safety net, covering legal defense costs, settlements or judgments.
An independent insurance broker like R&A PSYINS can research all your different coverage options and develop a customized policy that could include the following:
Coverage A: Bodily Injury & Property Damage (covers the insured’s business operations or premises if it found legally liable for 3rd party bodily injury or property damage)
Coverage B: Personal & Advertising Injury (covers misacts such as libel, slander, malicious prosecution, and copyright infringement)
Coverage C: Medical Payments (covers those who have suffered bodily injury as a result of the insured’s negligence. Legal liability is not necessary for this coverage to be effective and can help deter lawsuits by paying medical costs.)
Professional Liability/Errors & Omissions (E&O) Insurance. While ketamine is generally safe when administered properly, adverse reactions or unexpected complications can and do occur. Inadequate training, improper dosing, or failure to screen patients thoroughly can produce severe consequences, which may result in damaging lawsuits.
Professional Liability Insurance/E&O, also known as Malpractice Insurance, covers claims arising from alleged professional negligence, misdiagnosis, or improper administration of ketamine treatments. It offers financial protection for legal defense costs, settlements, or judgments.
Clinics and Wellness Centers that offer Ketamine IV Infusion Therapy are in the highest risk pool for claims of negligence or harm. KAP typically involves lower doses of ketamine and incorporates therapeutic interventions such as talk therapy, mindfulness techniques, and integration sessions. Regardless, ketamine is a specialized treatment, and errors can occur even with the most experienced practitioners.
It is critical for clinics to secure an E&O policy that specifically insures the type of treatment they are providing.
Cyber Data Liability Insurance. Ketamine clinics store sensitive patient information, such as medical records and payment details, in electronic formats. A single breach can compromise patient privacy and lead to legal liabilities. Cyber Data Liability Insurance helps mitigate financial losses resulting from such incidents, covering expenses related to data recovery, legal fees, and notification to affected individuals. By securing this coverage, ketamine clinics can enhance their cybersecurity measures and safeguard patient confidentiality.
Product Liability Insurance. Product contamination, mislabeled products, false advertising, or defective products can happen anywhere along the supply chain. If your clinic or wellness center is dispensing medication, you need this specialized insurance policy. With proper coverage, your insurance company - not your clinic - will pay for damages and legal expenses if you are sued, up to your policy limits. Your Product Liability policy will also cover any medical expenses for those who are harmed by the Ketamine IV Infusion Therapy. The need for different product coverages depends on the doses you are administering, as well as the legal and regulatory compliance requirements pertaining to the state(s) in which you operate.
As ketamine clinics grow in popularity and number, it becomes increasingly important to avoid damaging lawsuits by securing the right business insurance coverages. The level of coverage your clinic needs can vary depending on multiple factors, such as whether you are providing Ketamine IV Infusion Therapy and/or Ketamine-Assisted Psychotherapy; state laws and regulations, and the specific mental health condition being treated.
By working with an independent broker like R&A PSYINS, who specializes in the psychedelic medicinal/therapy industry, you can rest easy knowing you have the right amount of insurance - not too little, not too much - and the most important coverages for your ketamine clinic. Specialized insurance brokers tend to be more knowledgeable and up-to-date on state regulations, HIPAA Compliancy and mental health protocols and treatments versus traditional insurance companies. We can also help you understand the endorsements and exclusions for each of your policies, so you are fully aware of what is and what is not covered by your insurance carrier.
R&A PSYINS is at the forefront of this new psychedelic movement providing ketamine clinics and licensed practitioners with custom Business Liability Insurances. If you have questions, or would like to schedule a free consultation, please click here or call (954) 790-6604.