Throughout their careers, psychologists are faced with myriad ethical questions or challenges, potential complaints to licensing and regulatory authorities, and possibly even threats of legal action. According to estimates by The Trust, which provides professional liability insurance and financial security products for psychologists, over a 20-year career, 40 percent of psychologists will receive a licensing board complaint. Significantly fewer, just under 2 percent, will have a malpractice lawsuit filed against them.

But even a letter of reprimand, the lowest form of disciplinary action from a licensing board, can have serious emotional and financial consequences for a practitioner, says Jana N. Martin, PhD, CEO of The Trust.

"The impact of a licensing board complaint can often be pretty severe in terms of continuing to practice because if you're found guilty or in violation, your license can be suspended or revoked," Martin says. "While it's not likely that a successful malpractice suit will have a direct impact on a psychologist's license, it can sometimes have indirect consequences on licensure."

Martin notes that the top reason for disciplinary sanctions from licensing boards — as well as malpractice complaints — is sexual misconduct and other boundary crossing or multiple relationship violations. Other common reasons for discipline include participating in child custody disputes (particularly when it's outside one's area of expertise), breaches of confidentiality, and patient suicide or attempted suicide.

"We're taught in grad school that the No. 1 malpractice offense is inappropriate sexual relationships with clients, and I think many of us have an image in our head about what kind of psychologist would engage in that — and that it's not us," says APA Practice Director of Research and Special Projects Vaile Wright, PhD. "But the reality is that we're all human, so it's important for early career psychologists to make sure they're familiar with these ethical issues and what the Ethics Code has to say about them."

What do you need to know? We've asked several of psychology's leading ethics experts to share their advice on how practitioners can avoid the misunderstandings, hurt feelings and sticky situations that lead to hearings before ethics boards, lawsuits, loss of license or professional membership, or even more dire consequences.

Engaging in a sexual relationship with a client is the multiple relationship most of us think of, but this category is broader than that. It refers to having more than a therapeutic relationship with a client or trainee, "such as hiring your patient to be your gardener or seeing your gardener as a patient," Martin says. This often becomes most problematic in rural settings, but it's an area where a psychologist needs to be cautious and realize that he or she is increasing the probability of a board complaint if he or she engages in these relationships, she adds.

Martin also says The Trust has started seeing more boundary violations related to the use of technology — particularly social media.

"If a psychologist has a Facebook page, the decision about whether or not to allow a client to friend you on Facebook can lead to a multiple relationship and a loss of objectivity on both sides, and confidentiality can also be compromised in that kind of relationship," Martin says. It's important to discuss social media and let clients know the risks of interactions in that space in your informed consent (see Step 2).

During your first session with a client or patient, establish distinct boundaries as to what services you will provide, and what you can't or won't do, says Stacey Larson, PsyD, JD, APA's director of legal and regulatory affairs.

"A lot of what we see are difficulties with not using a really good informed consent," she says. "It happens with both new and experienced psychologists, particularly those working with children whose parents are divorced or divorcing. They are hired as the child's therapist but then they get drawn into advocating for one parent or the other in a custody dispute, and that's outside the purview of what they do."

Having a comprehensive informed consent is also important when using technology with clients, particularly when it comes to how clinicians deal with emails and texts from clients, Larson says. She encourages psychologists to familiarize themselves with the APA Practice Organization's "Guidelines for the Practice of Telepsychology," and also points to effective informed consent and social media policies by San Francisco-based clinical psychologist Keely Kolmes, PsyD.

Martin agrees, noting that texting with a client — especially if your phone is not encrypted or you are not 100 percent positive the person you're texting is indeed your client — can make a practitioner vulnerable to confidentiality violations.

Psychologists, of course, have much more going on in their lives than their careers. Spouses, friends, children, parents and illness can stress even the most balanced psychologist. The stressors can be particularly acute among early career psychologists who may be experiencing the stresses and excitement of getting married, buying a first home and starting a family, Wright says. The convergence of these stressful personal and professional experiences can often lead to burnout, and perhaps poor judgment.

"All of these new stressors can affect the work that you do, so it's really important for psychologists to think about the importance of self-care, and have strong knowledge of their own limits," she says. That means being able to recognize the warning signs — such as headaches, an upset stomach, a lack of concentration, irritability or anxiety, particularly during sessions with clients or interactions with coworkers or supervisees, which can indicate your personal problems might be seeping into your work. It's at these times that practitioners might be more likely to fall prey to ethical violations, such as inaccurate or careless charting and billing, inappropriate or excessive self-disclosure with a client, or confidentiality breaches, such as leaving client documentation in a public place, Wright says.

Too often, business-of-practice issues such as professional liability and how to protect yourself aren't discussed during in doctoral training, Wright says.

"Because of that, I think malpractice insurance isn't always on people's radar," she says. "I know when I was working at the hospital before coming to APA and someone would ask me about malpractice insurance, I would say, ‘Oh, I'm covered by my organization.' But I'm not sure I actually knew what that meant."

She recommends that psychologists who are employed by others understand exactly what their employers' coverage includes, and determine whether there are gaps in that coverage that they might need to fill with their own malpractice insurance policy.

For example, you want to know what your liability limits are, what happens if the legal costs exceed your employer's limits, and if these limits are shared with other defendants. You should also consider that your employer's insurance may need to act in the best interest of the employer, instead of yours. These factors could increase your own personal financial liability if something happens, Wright says. Other questions to ask include whether you are covered for off-duty work, such as volunteering in a professional capacity, and whether your employer's malpractice policy provides license coverage, in the event that a client or colleague files a complaint with the state licensing board against you.

"That's not a lawsuit per se but your license has been questioned and you will likely still need to consult with a lawyer," she says.

When in private practice, it's also important to think about the kind of coverage you need given the work you do and your finances, and then shop around, Wright says. Cheaper is not always better, she says, and she encourages psychologists to factor in policyholder benefits, such as the availability of consultation services, she adds, noting that The Trust's Advocate 800 Consultation Service provides free confidential ethical and risk management consultation from licensed psychologists.

Psychologists who work with high-risk populations such as patients with personality disorders, severe mental illness or who are suicidal may want to increase their coverage, Martin says.

"There are many things that can go wrong very quickly with these patients, leaving psychologists who work with them more vulnerable to board complaints and malpractice claims," she says.

Given how often changes occur at the state and federal levels when it comes to laws and licensing board issues, it's critical for psychologists to stay informed, Wright says.

Belonging to professional groups — such as APA's Practice Organization and your state psychological association — that keep members up to date on changes that affect practice is a great way for practitioners to stay informed, she says.

Doing so can also lower your malpractice risk. A 2012 study found that the likelihood of being disciplined by a state board of psychology was lower for psychologists who belonged to their state psychological association (see Resources at bottom). What's more, many state associations also offer a mentorship program where early career psychologists can get one-on-one guidance on malpractice and other business of practice issues from a seasoned practitioner.

Larson also recommends contacting your state's licensing board with questions about state-specific policies, such as those about recordkeeping, confidentiality, general licensure requirements, renewals and continuing education. While APA provides guidance on many of these issues, each state has its own requirements governing how psychologists should practice lawfully and ethically.

"The licensing board seems a little scary at first, but they are the experts on the state law. So if you have a question about what the law asks you to do, they can be a really good resource," she says.

The APAPO, a companion organization to APA, advocates on behalf of practicing psychologists.