The global spa industry is expected to grow to $25B+ by 2024 with millions of visitors. An industry that serves so many people is at great risk for liability. Spa insurance is a must for spa owners, workers, and facilities.
Keep reading to understand the ins and outs of spa insurance and learn why it's important for your business.
Why Is Spa Insurance so Important?
Whether you run a medical or wellness spa, having insurance is a must. When dealing with customers or patients, your business needs to be protected.
Spa insurance will cover liabilities and property damage. Both of these disasters could be costly without insurance.
This unique type of insurance designed specifically for the spa industry helps to cover situations that arise often. Spa insurance is a commercial insurance option. It protects businesses and professionals from various risks.
Who Is Spa Insurance For?
Spa insurance is for anyone who owns their own business or provides services at a spa. Liabilities can happen to anyone when providing a professional service. They also happen in medical spas, so having protection in place is necessary.
Owners of spas should have insurance to cover workers' compensation claims, the facility, and any company vehicles. Continue reading to understand why it's important for each type of spa employee to have insurance coverage.
Hairstylists would benefit best from professional liability insurance. This type of insurance covers claims related to services provided.
For example, say a customer gets a haircut and it doesn't look like the picture they provided, so they decided to sue. Or their chosen hair colour is completely off or worse yet, damages the hair.
Estheticians benefit from professional liability insurance coverage since they are dealing with equipment and chemicals.
Insurance would protect them in the event a customer's skin is too sensitive and burns. Or a tool slips from their hand and leaves a third-degree burn or cut on someone.
Salon owners must have several types of insurance. If the facility employs workers, it must have workers' compensation insurance in case of injury.
A spa owner should also ensure each employee has professional liability insurance coverage. Owners should consider all liabilities, including natural disasters, fires, lawsuits, and injuries.
There are insurance options designed specifically for eyelash technicians. While eyelash services are generally safe, there are a few common risks associated with this type of service.
- Allergic reactions
- Falls and slips
- Negligence in product usage
A client can decide to sue someone providing a service at any time, for any reason. It's important to have the proper insurance coverage in place.
Medical Spa Owners
A medical spa offers different types of procedures than a wellness spa. Medical spas are also run by a doctor.
Patients can get luxurious treatments but also specialized treatments. These services are typically procedures often done in dermatology or cosmetic surgery clinics.
Medical spa owners will need business, medical, and professional liability insurance policies to cover all their bases.
Nail technicians will need professional liability coverage. They are dealing with nails, cuticles, and hands and feet. Any number of issues could arise.
If a customer loses a nail because of the treatment you gave them, you want to make sure you're protected legally.
Makeup artists deal with people's skin and appearances. There are many chances for allergic reactions or bad outcomes. It's best for artists to be protected against liabilities.
Much like a hairstylist, barbers are dealing with sharp tools that could cut or nick someone's skin. It's better to be safe than sorry with this service. Liability insurance will help barbers stay safe from claims.
What Does Spa Insurance Cover?
The coverage depends on the type of insurance policy you buy. Continue reading to understand the most common types of spa insurance plans.
General Liability Coverage
This type of coverage is for overall liability that could occur in a business setting.
General liability insurance will protect owners from lawsuits related to bodily harm and personal injury. This type of insurance will also allow property claims and claims against false advertising.
Professional Liability Coverage
Professional liability coverage is explained above. This coverage is important for professionals providing services. This insurance coverage will handle accidents, injuries, and negligence.
Property insurance is important in case of natural disasters or emergencies. Having this type of insurance will make sure your spa can stay in business following a loss.
Property insurance replaces the following losses:
- Hairstyling stations
- Tools and equipment
- Tanning beds
- Products in inventory
- Products used to provide services
- Specialized equipment
This type of insurance is necessary for owners of facilities, whether in a medical or wellness spa.
Business Owners Policy (BPO)
This type of coverage combines general liability and property insurance claims into one policy. This would be a good option for spa and medical spa owners. It covers:
- Property damage
- Customer injuries
- Product-related claims
- Advertising injury
- Commercial property
- Moveable property
Workers' compensation coverage is necessary in case of any workplace accidents, such as falls, burns, and work-related illnesses.
When an employee is injured on the job, the business is required by law to pay for any lost wages. A solid insurance policy will cover these expenses.
It also covers:
- Medical fees
- Lawyer fees
- COVID-19 infections
This type of policy is a must-have for anyone with employees.
This is an extended plan to cover situations not covered by normal policies. For example, the loss exceeds the limits on your regular policy; having an umbrella policy would help cover what isn't.
Commercial Auto Insurance
This may or may not apply depending on the type of spa you have.
A mobile spa would need this type of insurance. And if you use your personal vehicle to do anything work-related, this time of insurance is necessary.
Personal policies will not cover accidents if they happen to do something related to the business.
Business Interruption Insurance
This type of coverage helps your business in the event of unforeseen circumstances.
Maybe a storm caused a long lasting power outage and you are unable to provide the services you normally would on a normal day. Your business interruption insurance would cover you for these types of incidents.
This type is especially important for medical spa facilities. This will cover any situations where injuries happen due to mistreatment.
In some spas, massage therapists are on staff to deliver much-needed relaxation.
Due to the nature of the job, sometimes sexual allegations do arise from customers. You can get a special policy to cover your business in this event.
You can even purchase insurance policies to cover your business if you get a compliance violation. There are also policies that will cover fees related to accidental regulatory infractions.
What's Not Covered by Spa Insurance?
Most insurance policies do not cover natural disasters without a special add-on. Insurance agencies will help business owners to determine which type of add-on is best for their business based on the area they live in.
This type of insurance is a catastrophe policy.
Professional liability insurance doesn't cover criminal prosecution. It also doesn't cover cyber liability, such as data breaches or technology issues.
If your spa provides child care for your members while they receive treatment, you'll need a special policy to cover those risks. If you rent your spa facility, you'll need renters insurance. You can still get these types of protections. You'll just need to purchase additional policies specialized in these areas.
What to Look for in a Company that Offers Spa Insurance?
When choosing a company to provide your spa insurance, you should consider a few things.
- What type of insurance is needed
- Where you live and local risks
- What type of services are you offering
- Budget and pricing
- Your assets
- What needs protection
This guide outlines how small businesses can best secure insurance policies.
Risks of Not Having the Right Insurance
There are many risks associated with not having proper insurance. Workers can get sued. You could lose your business. There are even legal ramifications.
In the event of a disaster, you won't be covered for the renovations. If someone sues you, you're liable for the fees and settlement.
Most professionals and spa owners do not have the funds to cover situations like this. Investing in the proper insurance plans will help you be prepared for anything.
Typical Costs of Spa Insurance
Spa insurance costs will vary depending on where you live and what your business offers. The number of employees and industry will also be calculated.
You can expect to pay per employee for workers' compensation coverage. It can start at around $16 a month.
General liability coverage has policies that cover $1M and up in risks. You can expect to pay at least $47 a month for this type of policy.
Property insurance can start at $9 a month and go up.
Your cost of insurance will greatly outweigh the risk of not having it. Consider how much a disaster could cost vs. what you pay in premiums.
It's better to be on the safe side.
How to Save Money on Spa Insurance
There are a few different ways to save money on spa insurance.
Bundle Your Policies
By bundling your policies you can often get discounted rates. Bundling your policies simply means you buy several policies from the same company in a bundled deal. There are a few advantages to bundling your policies:
- Fewer accounts to manage
- You might save on deductibles
- Easier claims process
- Helps lower cancellation risks
You do need to research the companies and what they offer if you are considering bundling. Discounts are often listed on company websites. Or you can speak directly with an agent that specializes in business insurance.
Adjust the Deductible
You also have the option of adjusting your deductible to lower your cost. The deductible is the amount you have to pay for each event.
A higher deductible will often lower your premium.
Customize Your Policy
By customizing your plan, you only pay for what you need. This helps you to avoid costs. Why pay for workers' compensation insurance if you are the sole owner and employee?
Decrease Business Risks
Another great way to lower the costs associated with insurance is to have systems in place to protect your business. Most insurances offer discounts for "good behaviour" so to speak. Going without claims can lower your costs over time.
With systems and processes in place to protect your facility, your customers, and your employees, you will eventually see cost savings.
In this article, you learned about spa insurance and the types of policies you can purchase. You also discovered why it's important for anyone in the beauty industry to hold insurance.
You understand the risks associated with owning a business and not having an insurance plan. Here at Insurdinary, we take the guesswork out of shopping for the right policy. We've done that for you. We have officially partnered with APOLLO Insurance to bring you not only the best rates on the market and the most comprehensive spa and beauty coverage; but also the most knowledgeable team of advisors in the country. Get a quote from APOLLO today. You'll be glad you did!