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Insurance Your Spa Can't Do Without

Updated: Mar 3, 2020

It 's every spa owners worst nightmare – the day you receive that dreaded call that someone has been assaulted in your facility. Or that awful moment you’re served with a lawsuit filed by a former client claiming negligence.

When the best hiring practices, training initiatives, and company policies fall short, you need a way to defend your business against the risks associated with running a spa.

Whether it’s negligently maintaining your building, destruction of property, defrauding a customer, or mistreating an employee – your personal assets are in jeopardy without sufficient protections in place to cover you when an incident occur.

Here’s a list of insurance coverages your spa should carry to safeguard your business against various forms of liability.

Professional Liability

Sometimes called errors and omissions insurance (E&O insurance), is insurance coverage for claims against businesses that provide professional and/or personal services. Professional liability insurance can protect spa owners and their employees (who should also carry their own coverage) by covering costs and fees associated with resolving claims, including medical expense obligations, legal expenses, and damages awarded.

Examples of reasons why you need this type of coverage:

Bodily Injury – Any harm to a person’s physical body that occurs as a result of negligence related to professional services rendered in your business. Bodily injury claims often include claims of emotional distress and loss of wages resulting from the injury.

  • Example 1: A massage therapist uses a massage oil that gives the client a rash – and said rash causes them to miss work and seek medical care.

  • Example 2: A massage therapist injures a client during their therapy by aggravating an old injury.

Loss of Personal Information – Misuse or neglect in handling personally identifiable information. We see this often with tech companies that are sued for privacy breaches. In spas, clients often provide sensitive medical information that’s kept in their printed or digital files. The mismanagement of these files can result in a lawsuit against the spa owner.

  • Example 1: Your receptionist accidentally emails a file containing sensitive medical information to the wrong client.

  • Example 2: Your spas computer is hacked compromising client files.

General Liability

Every business needs general liability coverage, which can help with medical expenses resulting from normal business operations. From the time your doors open for business each day, until their closing, you are liable for every thing that happens within the square feet of your building. General liability can protect you and your employees against third-party claims.

Examples of reasons why you need this type of coverage:

Bodily Injury – General liability bodily injury claims are result from physical injury to people arising from daily operations.

  • Example 1: A client steps out of the shower after a massage and trips on the wet floor. They fault the spa owner for not properly cleaning the facility and sues for bodily injury, medial expenses, and loss of wages.

  • Example 2: A delivery man trips over boxes on the floor and sprains his ankle. Although he has a worker’s comp claim, he may also sue your spa for negligence.

Property Damage – Covers damage to someone else’s property that may occur during the course of receiving services at your spa.

  • Example: A client accuses your spa employees of stealing or breaking their personal belongings. They file a claim against you attempting to recover their losses.

Defamation – The written or spoken communication of a false statement that negatively affects the reputation of an individual. There’s libel defamation, which is printed or written, and slander, which is spoken.

  • Example 1: An employee insults a client or spreads rumors about them to other clients.

  • Example 2: A massage therapists shares sensitive information shared during a client’s therapy.

Sexual Assault and Molestation

Includes claims of physical abuse, such as sexual or bodily harm and non-physical abuse, such a verbal, emotional or mental abuse. Any actual, threatened, or alleged act of abuse, and any errors, omissions, or misconduct. Spas are particularly susceptible to claims of abuse because of the intimate nature of service like massages in which clients often completely disrobe.

Claims of abuse can devastate your business. When it comes to defending your spa and paying any damages or settlements, you need reliable coverage from a sound insurance provider. Most professional liability policies either do not cover sexual assault and molestation claims, or have separate premiums and deductibles that are much higher than other quoted coverages and limits. If you are lucky enough to have this coverage, you are likely underinsured. We recommend thoroughly reviewing your policy with your broker to understand our coverage limits.

Examples of reasons why you need this type of coverage:

Physical Abuse - Sexual abuse or other bodily harm.

  • Example: A massage therapist gets accused of touching a client inappropriately during a session.

Non-Physical Abuse - Includes verbal, emotional, or mental abuse.

  • Example: An employee threatens to physically harm a client after a payment dispute.

Worker’s Compensation

A disability compensation program in which an employee receives wage replacement benefits, medical treatment coverage, and vocational rehabilitation in exchange for the employees mandatory relinquishment of their right to sue their employer for negligence. If you have one or more employees, you should carry worker’s compensation to protect your business from on-site and off-site accidents.

Examples of reasons why you need this type of coverage:

  • Example 1: An aesthetician burns their hand due to a broken wax machine that overheats the wax.

  • Example 2: A massage therapists hurts their back while assisting a patient off the table.

Property and Casualty

Protects you and your property from incidents of vandalism, theft, or other damages done either to your property or that cause damage to another person’s property.

Examples of reasons why you need this type of coverage:

Property – Covers financial losses that result from physical damage to your property, equipment, or furniture.

  • Example: A client accidentally breaks a treatment table and you file a claim to cover the cost of repairs or a new table.

Casualty – Covers damages or settlements resulting form injuries sustained by a third-party.

  • Example: A massage therapists hurts their back while assisting a patient off the table.


Business Interruption

If you live in a declared disaster area or a region that is prone to natural disasters, you may also want to carry business interruption insurance which covers the loss of income that results from a natural disaster.

  • Example: A 3-day storm causes your spa to flood, forcing you to close your doors during repairs.

Although coverages vary and may depend on your property and casualty limits, your past accounting records will support your loss of income claim. You could receive payouts for operational expenses, the cost of relocating to a temporary space, payroll, and much more.

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