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March 12, 2024

Common Medi-Spa Insurance Coverages

Medical spas are a booming business. Acumen Research and Consulting says the medi-spa market was worth an estimated $16.3 billion in 2022 and it’s expected to reach $63.4 billion by 2032 as demand for non-invasive cosmetic procedures grows. Growth of this magnitude will bring risks as well as opportunities. Let’s take a look at the most common medi-spa insurance coverages to help mitigate those risks.

Medical Spa Malpractice Liability Insurance

Yahoo News says a man was awarded $1 million in a lawsuit against a skincare spa. According to the lawsuit, a chemical peel he received at the spa severely burned his face. In another case, Law.com says a Pennsylvania court issued a judgment of $1.2 million against a spa over botched chin injections administered by a nurse with a suspended license.

Although medi-spa professionals may not face the same risks as surgeons or OB-GYNs, there is still a chance a treatment could go wrong and result in a lawsuit. Medi-spas may also face unfounded lawsuits that are nevertheless expensive to fight in court. Medical spa malpractice liability insurance provides coverage against such lawsuits, making it one of the most important coverage types for this industry.

Commercial Property Insurance

Commercial property insurance is important for any business with a physical location, including medi-spas. If a fire, storm, burst pipe, or other covered peril damages the property, commercial property insurance covers the building itself as well as the equipment, furniture, inventory, and other business property.

Since commercial property insurance excludes some risks, medi-spas may need additional property insurance. As well as standard commercial property insurance, medi-spas should consider securing coverage for flood damage, earthquake damage, and equipment malfunction.

Business Interruption Insurance

If a medi-spa experiences severe property damage, it may need to halt operations until repairs are complete. This requires canceling appointments, resulting in lost revenue. Business interruption insurance can provide compensation for the lost revenue. Since it’s typically tied to commercial property insurance, it covers perils that this insurance also covers.

General Liability Insurance

Malpractice liability insurance covers claims related to the services the medi-spa provides. General liability insurance covers other types of claims involving bodily injury, property damage, and personal and advertising injury. While there are a wide range of exposures, two common claims involve slip, trip, and fall incidents on the premises or lawsuits alleging copyright infringement in one of the medi-spa’s advertisements.

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) provides important liability coverage for employers. It covers a wide range of employment-related claims, including allegations of wrongful termination, discrimination, harassment, and breach of contract.

Workers’ Compensation Insurance

The medi-spa industry isn’t especially dangerous for workers, but there is still a risk of injury. For example, medi-spa employees may be injured through accidental injections or equipment malfunctions. They could also develop repetitive strain injuries such as carpel tunnel or epicondylitis. Clients or coworkers may also injure them.

Workers’ compensation insurance provides coverage for worker injuries. In most states, it is a requirement for most or all employers.

Commercial Auto Insurance

Some medi-spas may not need commercial auto insurance, but it’s important to understand the risks and insurance options before dismissing this coverage outright.

If your spa owns vehicles, you need to insure them according to the minimum auto insurance requirements in your state. If your spa does not own any vehicles, you may still need to obtain coverage if the owner or any of your employees use personal vehicles for business purposes. For example, if employees frequently pick up supplies using their personal vehicles, you may need hired and non-owned insurance to cover your own liability risks. Otherwise, if your business is named in a lawsuit over a crash, it may lack liability insurance to cover the claim.

Does Your Medi-Spa Have the Insurance It Needs?

Running a successful medi-spa involves a lot of moving parts. You need to focus on hiring, licensing, operations and marketing – the list goes on. With so much to consider, you may neglect risk management until you’re dealing with an issue – and, by then, it’s too late.

Heffernan Insurance Brokers can help. Our healthcare risk management experts have experience serving medi-spas and are familiar with their unique needs and exposures. We will help you determine which types of coverage are most important for your business, including (but not limited to) the coverage types listed above. Learn more.

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