Legal Landscape:
Business Insurance 101 for Music Teachers, Part 3
Deborah H. How
MTNA Business Digest, Volume 3, Issue 3
April 2024
Insurance is an essential part of running any business. This four-part series takes a deeper look at insurance for music teachers. In this issue, Part 3 continues with a focus on professional indemnity and sexual abuse and molestation insurance. Click here for Part 1 (overview) and here for Part 2 (general liability insurance).
Professional Indemnity
Professional Indemnity, also known as Professional Liability or Errors & Omissions (E&O) insurance covers 1) legal fees, 2) settlements and judgments, 3) damages due to professional negligence or errors (Insuranks n.d.).
Do independent music teachers need Professional Indemnity/Professional Liability/E&O insurance?
In her 2022 article “What is Professional Liability Insurance? Costs and Coverage” for Investopedia, Julia Kagan writes:
“Who Should Get a Professional Liability Insurance Policy? Professionals and businesses that provide services to customers should get a professional liability policy. These policies cover claims against you and your company for professional errors, mistakes, judgments, or failed service delivery.”
Importantly, Professional Liability Insurance (PLI) covers legal and settlement costs arising from service-related errors. In his 2023 guide, “Professional indemnity insurance: What is it and how does it work?” for Insurance Business magazine, Mark Rosanes notes:
“What does professional indemnity insurance cover? A professional indemnity insurance policy covers legal and settlement costs arising from service-related mistakes. These include: professional negligence…breach of contract…misrepresentation…and professional misconduct.”
Although it may seem implausible that a music teacher could get sued for errors and omissions or misrepresentation or failed service delivery, we do offer a professional service (teaching) and often coach our students for auditions, competitions, festivals and examinations. What if a parent is disappointed with the musical progress and accomplishments of their child? They could file a lawsuit for professional negligence due to the fact that your teaching and publicly claimed expertise did not meet their expectations and/or that their child never achieved your advertised prize-winning student results.
Thimble, an insurance company with products specifically for music teachers offers:
“Why do I need Music Teacher Insurance? As a music teacher, you share the gift of music with your students and make an income doing what you love. You enrich your students’ lives through your instruction, which is a rewarding endeavor…."
“Yet, despite the nature of your business, there’s always the chance that something goes wrong. Being a music teacher does not come without risks…[For example,] you’ve been spending countless hours with one of your students in preparation for Ju[i]lliard. Despite your direction and diligence, the student is rejected. The parents then sue you for breaching the contract, claiming it was your fault that their child did not make the cut…."
“If a student pursues a lawsuit against you, you’ll also have to pay your legal fees out of pocket. These costs can quickly deplete your earnings and put you in a devastating financial position…Professional liability insurance protects music teachers from claims of negligence, errors, or costly mistakes.” (Thimble 2024)
Having a PLI policy may seem excessive, but more and more professional organizations, including MTNA, are offering PLI coverage through partnerships with various insurance carriers. Through the Trust for Insuring Educators (TIE) and Forrest T. Jones & Company, three different Professional Liabiity plans are available to MTNA members depending on state department of insurance regulations: 1) Educators Professional Liability Plan for employed educators, 2) Private Practice Professional Liability Plan for self-employed educators or those engaged in partnerships, LLCs and corporations, and 3) Student Educator Professional Liability Plan for young educators doing student teaching, internships and practicums (Forrest T. Jones & Company n.d.).
Sexual Abuse and Molestation
Sexual Abuse and Molestation (SAM), sometimes called Sexual Molestation Liability (SML) or SAM/SML insurance, covers 1) sexual harassment, 2) verbal abuse and 3) assault (Insuranks n.d.).
Increasingly more schools (public and private), colleges, churches and event venues are now requiring independent contractors, consultants, and volunteers to carry Sexual Abuse and Molestation (SAM)/Sexual Molestation Liability (SML) insurance.
Why would a teacher need SAM/SML insurance? HCP National explains:
“Sexual Molestation Liability insurance can provide protection for claims of sexual abuse made against a policyholder and a policyholder’s employees. Claims that may arise – whether true or false – can be related to abusive behaviors committed by the insured (and/or the insured’s employees), but also can involve a failure to supervise when inappropriate behavior occurs."
“Other claims that an SAM/SML policy might cover include failure to investigate allegations of sexual harassment, misconduct, molestation, or abuse, as well as negligent employment.” (Thimble 2024)
For example, a wind teacher demonstrates breathing techniques by asking her student to place their hands on the teacher’s abdomen to feel how the teacher’s abdominal muscles engage as she releases the air out slowly. The student doesn’t say anything during the lesson, but she then goes home and tells her parents that she felt very uncomfortable not only because she was touching her teacher on the abdomen, but also that she felt pressured to do so, and moreover, the touching was inappropriate. SAM/SML insurance would provide coverage against the false accusation, i.e., help with the legal defense costs.
Through Francis L. Dean & Associates, MTNA offers a new policy specifically for independent music teachers that includes Abuse and Molestation Liability:
“This coverage is added to protect you if someone makes a serious accusation against you, saying you did something inappropriate during your music lessons. This insurance helps you defend yourself legally and shows you’re innocent if the accusation is false (MTNA n.d.).”
Now that you have considered general liability insurance (Part 2 of this series), professional indemnity insurance and sexual abuse and molestation insurance (Part 3 of this series), next up is the importance of carrying separate musical instrument insurance for the business use of your instrument. (Part 4 of this series).
References
Forrest T. Jones & Company. n.d. “MTNA Member Insurance Program: Through the Trust for Insuring Educators.” Accessed February 14, 2024. https://www.ftj.com/mtna/ca#sthash.0HWOoHyO.dpbs
Insuranks. n.d. “Music Teacher Insurance: Liability, Cost, and Quotes from $20/mo.” Accessed August 15, 2023. https://www.insuranks.com/music-teacher-insurance
Kagan, Julia. 2022. Investopedia, “What Is Professional Liability Insurance? Costs and Coverage” Updated September 3, 2022. Reviewed by Margaret James. https://www.investopedia.com/terms/p/professional-liability-insurance.asp
MTNA. n.d. “Member Insurance.” Accessed February 14, 2024. https://www.mtna.org/MTNA/JoinAndRenew/Membership/Member_Insurance.aspx
Rosanes, Mark. 2023. Insurance Business, “Professional indemnity insurance: What is it and how does it work?” January 18, 2023. https://www.insurancebusinessmag.com/us/guides/professional-indemnity-insurance-what-is-it-and-how-does-it-work-433113.aspx
Thimble. n.d. “Music Teacher Insurance.” Accessed February 14, 2024. https://www.thimble.com/industry/professional-services-business-insurance/music-teacher#:~:text=If%20a%20student%20pursues%20a,insurance%20and%20professional%20liability%20insurance.
Deborah H. How, PhD, MBA is a connection builder/fundraising architect for nonprofit music organizations. She is the owner of Westside Music Conservatory, CEO of Musical Etudes and member of the MTNA Business Resource Network.