Your supervisee, who you meet with once a week, had a sexual relationship with a client. You had no idea; their notes were perfect, and they lied to your face. Now the client is suing the supervisee and you, claiming “Vicarious Liability” and “Negligent Supervision.” You assume your policy covers you, but the claim amount is $2 million—double your policy limit.
Key Takeaways
- Vicarious Liability: Legally, the master is responsible for the servant. If you sign off on their hours, you own their mistakes.
- Shared Limits Trap: In many group policies, you and your supervisee share the same $1 Million limit. If the claim eats up the limit on their defense, you have $0 left for yours.
- The “Undisclosed Claims” Exclusion: If you knew (or “should have known”) about the issue and didn’t report it, coverage is denied.
- Defense Outside Limits: Always ensure your supervision policy pays legal fees outside the liability limit, or the lawyer bills will drain the settlement fund.
The “Why” (The Trap): Respondent Superior
The legal doctrine is Respondent Superior (“Let the master answer”).
In 2026, plaintiffs know the supervisee is broke. They sue the Supervisor because you have the “deep pockets” (insurance and assets). The trap is “Negligent Supervision.” Even if you didn’t know about the affair, the lawyer will argue: “You should have dug deeper. You didn’t review enough raw audio.”
[IMAGE: Diagram showing ‘Vicarious Liability’ flow from Supervisee to Supervisor]
The Investigation: Protecting the Mentor
I reviewed the “Supervisor” endorsements of major carriers.
1. American Professional Agency (APA)
- My Analysis: Very strong supervision coverage.
- The Perk: They allow you to add supervisees as “Additional Insureds,” but I prefer requiring supervisees to have their own policy to stack limits.
2. CPH & Associates
- My Analysis: They ask specifically: “How many hours of supervision do you provide?”
- The Risk: If you supervise more people than you declared on your renewal, they can deny the claim for misrepresentation.
3. HPSO
- My Analysis: Good for counselors. They offer a “License Protection” benefit that covers you if the board investigates your license due to your supervisee’s error.
Comparison Table: Structuring Supervision Insurance
| Strategy | Pros | Cons |
| Shared Limit (Group Policy) | Cheaper, easy admin | One bad claim leaves you exposed |
| Separate Policies | Best protection ($1M each) | Harder to track |
| No Coverage | Free | Bankruptcy Risk |
Step-by-Step Action Plan
- Mandate Separate Insurance: Require your supervisee to hold their own malpractice policy with
1M/1M/3M limits. - Get a COI: Keep a current “Certificate of Insurance” from them on file. If it expires, supervision stops.
- The “Hold Harmless” Contract: Your supervision contract should state: “Supervisee agrees to indemnify Supervisor for acts of gross negligence or intentional misconduct.”
- Review Raw Data: Do not rely on their self-report. In 2026, audit one tape/transcript per month. Document that you did this.
FAQ Section
If they lied to me, am I still liable?
Yes, for “Negligent Supervision.” The argument is you should have caught the lie.
Does my insurance cover me if I supervise someone in another state?
Only if you are licensed in that state and the supervisee is practicing legally. Cross-state supervision is a regulatory minefield.
How many supervisees can I cover?
Check your policy. Most caps are around 5-10 before you need a “Group/Corporate” policy.