Moxie's Guide To Finding Insurance For Your Med Spa

Moxie’s Guide to Insurance for Med Spa Owners

Insurance is an essential tool in managing the risks of any business. Still, insurance is critical when that business is a med spa that offers professional medical treatments and procedures. Here’s what every med spa owner needs to know to ensure they’re adequately covered.

Securing appropriate insurance is a critical step before you open a med spa. No matter how knowledgeable and skilled you may be as a practitioner, lawsuits from patients still can occur—even when no wrongdoing takes place! This is where effective insurance plans and risk management strategies come into play.

If you own a med spa, obtaining comprehensive insurance coverage is a must for both your present and future success. While many insurance options are available to med spas, having the appropriate insurance for your practice is a substantial risk-mitigating factor. 

It can protect your business from the cost of lawsuits or other legal problems down the road. With the right insurance, you can rest easy knowing that your business is protected. 

This article explores the challenges and considerations that med spa owners face when selecting the appropriate types of insurance for their business. We’ll discuss the types of coverage essential for your med spa, how to compare different insurance options, what to look for in a broker, and tips for finding the best policies for your specific needs. Read on to learn more about how to shop for the insurance that best suits your med spa.
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Why Does a Med Spa Owner Need Insurance?

While some risks are universal for all business owners (i.e. inherent financial or business interruption risks), some are particularly relevant for med spas since they are both businesses and medical practices.

1. Medical malpractice: Professional negligence by a healthcare provider.
2. Property damage: The loss of property, particularly medical and non-medical equipment, in the case of a med spa.
3. General liability: Injuries or damages to people that occur on premises.
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What Types of Insurance Does a Med Spa Need?

As both businesses and medical practices, med spas need to have their insurance policies tailored to their specific services. Generally, it’s important to have insurance covering your practice’s premises, equipment, employee-related risks, and professional liabilities (i.e. medical malpractice).

Below is a list of the most common forms of coverage you may need to consider:

• General Liability Insurance: Protects your business from claims arising from injuries or damages that occur on your premises.
• Property Insurance: Covers any damage or loss to physical assets such as buildings, equipment, and inventory.
• Professional Liability insurance: Covers potential claims of negligence or malpractice.
• Workers’ Compensation Insurance: Protects your med spa if an employee is injured while on the job.
• Business Interruption Insurance: This covers loss of income and helps pay expenses if your med spa closes due to a covered peril.
• Practice Overhead Insurance: Covers business expenses in the event of an illness or disability.
• Cyber Liability Insurance: Protects your business from data breaches or cyber-attacks.
• Employee-Related Risks: Includes coverage for legal ramifications arising from wrongful termination, discrimination, sexual harassment, and other civil liabilities.

The above policies ultimately provide coverage for legal fees, settlements, or judgments associated with their respective claims. Accordingly, choosing policies covering as much of the above as possible is crucial to mitigate the potential legal risks your business may face. 

Now that you are familiar with the types of insurance that you should consider, how do you go about purchasing those plans?
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How Does a Med Spa Owner Get Insurance?

We hope we haven’t scared you off at this point. Med spas are extremely rewarding businesses to operate. By putting the proper risk mitigation strategies in place, you can ensure that you spend as much time as possible caring for your patients rather than speaking with their lawyers.

Insurance Brokers - An Easy Way to Find the Best Insurance for Your Practice

You can begin the search for insurance by selecting a qualified insurance broker. An insurance broker is a licensed professional who can help you find suitable policy quotes from multiple insurers (i.e. the most appropriate and most affordable insurance option for your practice).

The broker collects information about you (the person or entity to be insured), your qualifications, and the treatments you plan to offer. They use this information to generate quotes from several providers and carriers and present you with options best suited to your needs.

Of course, you don’t have to work with a broker; alternatively, you can buy insurance:

1. Directly from an insurance company
2. Through an insurer’s agent
3. Through an independent agent 

That said, we advise working with a broker when you have complex needs - like being a small business owner who requires multiple policies.

Some of the clear benefits of using a broker include the following:

1. Objective risk assessments
2. Impartiality
3. Range of insurer options
4. Accurate policy comparisons
5. Cost savings on premiums
6. Claim assistance
7. Saved time

If you’re unsure if you should go for it on your own or side with a broker, reach out to Moxie for 1:1 advice!
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How to Choose the Right Med Spa Insurance Plan?

Choosing the right med spa insurance plan for your practice can be confusing (this is why Moxie is here to help). While there are certainly types of insurance that all med spas should have (such as medical liability), you may need more assistance deciding how wide to expand your coverage.

As mentioned above, this is where an insurance broker can be a big help. If you opt not to go through a broker, you will have to do more research on your own. In this case, skip “Step 1” below, and start by taking some time to get familiar with the various types of coverage.

Step 1: Pick the Best Insurance Broker for Your Practice

For med spa owners, the best way to secure reliable insurance is to work with a broker who knows the med spa industry and your state’s legislation inside and out. It’s best to look for someone who can provide an accurate quote based on the treatments provided in a given practice.

Step 2: Get Familiar with the Types of Coverage

You also must ensure that your insurance policy covers general and professional liability, providing protection against slips and falls and malpractice claims. Taking the time to select an approach tailored to your business’s size and scope can help you rest assured that your business is adequately protected. For more specific examples of coverage types, refer to our list above.

Step 3: Expect Claims-Based Insurance

Claims-based insurance is the norm for med spa owners. Unlike occurrence-based policies, which are uncommon the med spa industry, claims-based insurance only covers you if you’re actively insured at the time of a claim. 

Don’t forget to purchase tail coverage (also known as an extended reporting period) when your business sells or winds down to protect yourself from any claims that may pop up as you exit yoru relationship with the company.

Step 4: Know the Coverage Limits

A typical medical spa coverage policy comes with a limit of $1,000,000 per claim and $3,000,000 annual aggregate; however, if a practice needs extra protection, excess insurance limits are available on a practice-by-practice basis. The minimum deductible typically begins at $2,500.

You should also note that many insurers will not provide coverage for services performed by unlicensed personnel. It’s critical to ensure that all employees are appropriately licensed, certified and trained; this will help avoid any lapses in coverage.

Different coverage costs apply based on the class (Class 1 or Class 2) of procedures offered. Class 1 procedures require an MD/DO or RN/NP/PA under physician supervision in most states, and aestheticians can perform class 2 procedures.

Please note that state-by-state legislation can and does differ.

Class 1 procedures include the following and are typically more expensive to insure:

• Botox (and other injections)
• Mesotherapy
• Laser treatments and photofacials 
• Laser hair and tattoo removal
• Dermal fillers
• Chemical peels
• Sclerotherapy

Class 2 procedures are listed below and are usually cheaper to insure:

• Facials
• Glycolic peels
• Massage therapy
• Permanent makeup
• Electrolysis
• Non-invasive skin therapies

Step 5: Know Which Entities Are Covered

The insurance plan must cover all parties involved in the med spa business. For example, this means the provider(s) performing the professional services, the Medical Director, the med spa, the owner of the associated MSO (if applicable), and any other relevant personnel. 

Step 6: Be Specific About Provided Procedures

When completing your application as a med spa owner, you should provide a comprehensive list of all procedures you plan to offer within the first 6–12 months of practice. While adding additional treatments is always possible, it’s best to be upfront about everything that will be available initially.

Depending on how they’re categorized (i.e. beauty vs. permanent cosmetics vs. laser treatment), procedures may require additional policies to be purchased if not bundled within a more inclusive plan.

Failing to list a procedure or not having state medical board approval can result in a lack of coverage if something goes wrong. Additionally, it’s important to ensure that the state medical board approves all treatments listed on the application and policy and that any requirements (certifications, training, etc.) are complete.

Step 7: Compare Payment Plans

You should obtain multiple insurance policy quotes to compare both coverage and pricing. Most commonly, pricing varies based on med spa size, location, number of employees, and claims history. When considering insurance, you should be aware that premiums may differ depending on the risk associated with your business (this is based on variables such as your offerings, staff credentials, location, etc.). 

Comparing payment plans to get the best coverage for your business at a reasonable price is also helpful.
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In Summary

As a med spa owner, maintaining the proper insurance is a major part of your ongoing risk management strategy. 

As such, it’s crucial that you stay up-to-date on your insurance coverage. As your practice grows, you must update the policy regularly to ensure adequate protection in case of any claims or changes in staff or treatments offered.

To make sure you are appropriately covered against potential risks, you should contact your insurance broker or relevant parties any time you plan to add new treatments, hire additional employees or contractors performing treatments, or any time a claim is made against you or your practice.

Don’t leave yourself or your business unprotected—insure your property, products, and employees. 

Insurance coverage is not the most straightforward topic, especially when dealing with a complex business like a med spa. Moxie is here to help you understand your insurance needs, connect you to a trusted broker, and help you evaluate your options so you can be covered as you get your med spa up and running. Learn More About Moxie and How We Work >

_{*This article is intended to provide a general guide on what professional licenses and conditions are needed to operate a practice or perform certain treatments. This information alone does not authorize, certify, or confer the ability of anyone to perform these treatments, practice outside their scope, or violate the corporate practice of medicine.}

_{While based on currently available information, the rules and policies on scope of practice issues and ownership can, and do, change frequently. Specific training, education, supervision, protocol and regulatory requirements will differ depending on each person's situation in their state. Therefore, each person must examine their own professional situation, skill level, regulating board guidance, and scope of practice before proceeding.}

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