A client tells you they are microdosing psilocybin (mushrooms) to help with depression. You offer “Integration Coaching” to help them process the insights. The client has a psychotic break and harms themselves. The family sues you for “Aiding and Abetting” illegal drug use and professional negligence.
Key Takeaways
- Illegal Acts Exclusion: Insurance never covers illegal activities. Psilocybin is Schedule 1 federally (in 2026, despite state changes). If the court views your coaching as “facilitating” use, coverage is denied.
- Harm Reduction vs. Guiding: You can support the person (Harm Reduction), but you cannot support the drug use (Sitter/Guide).
- “Sitter” Liability: If you are present while they are under the influence, you assume a massive “Duty of Care” that is likely uninsured.
- State vs. Federal: Even if legal in Oregon or Colorado, federal illegality allows insurers (who are interstate corporations) to deny claims.
The “Why” (The Trap): The Federal Law Gap
Insurance contracts adhere to Federal Law.
Even if you are in a decriminalized city, the “Illegal Acts” exclusion in your policy references Federal statutes. If you are viewed as a “provider” of the experience (even just sitting there), the insurer will wash their hands of you.
[IMAGE: Map of US showing ‘Decriminalized’ vs ‘Legalized’ vs ‘Illegal’ states for psilocybin in 2026]
The Investigation: Finding Coverage for Integration
I explored the emerging market for psychedelic risk.
1. Alternative Balance / Wellness Policies
- My Analysis: They cover “Integration Coaching” if it is strictly talk-based, post-experience.
- The Line: You cannot provide the substance, recommend the dosage, or be present during ingestion.
2. Hudson Insurance (Surplus Lines)
- My Analysis: Some specialized “Surplus Lines” carriers are writing policies for Ketamine clinics and Psilocybin service centers in legal states.
- Cost: Very high ($5,000+). Not for solo coaches.
3. Psychotherapy Policy
- My Analysis: If you are a licensed therapist, discussing drug use is covered under standard “addiction/substance use” counseling. But “Guiding” is not.
Comparison Table: Psychedelic Risk
| Activity | Insurance Status | Legal Risk |
| Sourcing/Providing | Denied (Criminal) | Jail |
| Sitting/Guiding | Denied (High Risk) | High |
| Post-Trip Talk (Integration) | Covered (Usually) | Low |
Step-by-Step Action Plan
- Strict “Hands-Off” Policy: Never touch, supply, or measure the substance.
- Harm Reduction Language: Your contract states: “Coach does not condone illegal substance use. Services are for educational and safety purposes only.”
- No “Sitter” Services: Do not be in the room while they are high unless you are in a state-licensed facility with specific insurance.
- Consult a Lawyer: Before advertising this, pay a lawyer to review your website copy. One wrong word (“Guide”) can ruin you.
FAQ Section
Is Ketamine integration covered?
Ketamine is legal (Schedule 3). If prescribed by a doctor, integration is covered more easily than mushrooms.
What if they tell me they plan to buy drugs?
You generally have no duty to report simple possession (unlike imminent violence), but check your state’s mandatory reporting laws.
Can I take mushrooms with them?
Absolutely not. That is immediate license revocation and total loss of insurance coverage.