Medical spa and management company owners should carefully review their professional malpractice and general liability insurance policies every time they are set to renew, at least annually, or when any changes are made to the policy or to your business operations. Here are some key considerations to keep top of mind as you assess whether your coverage is sufficient to cover your business practices:
- Procedure Coverage: Ensure that all the procedures you offer are covered under your policy and be specific. You want to check for blanket terms such as “cosmetic procedures” or “skin care,” and be sure they are supplemented by a listing of discrete offerings, such as “microneedling,” “exosome therapy,” “laser hair removal,” etc.
- Exclusions for Non-FDA-Approved or Off-Label Uses: Check if claims arising from non-FDA-approved products or off-label uses of drugs that are approved for specific indications–such as semaglutide–are excluded. As weight-loss programs continue to draw regulator scrutiny, many insurers are beginning to exclude off-label uses of weight-loss drugs as well as use of compounded semaglutide.
- Location Coverage: Confirm that all of your locations are included in the policy. If you only have one location, be certain that location is clearly listed. If you have more than one location, ensure that activities taking place in each location are covered. If you only provide mobile services, ensure that claims arising out of those services are covered, regardless of where they take place.
- Provider Coverage: Verify that all of your healthcare providers and aestheticians are covered. This includes your medical director all the way down to staff performing light chemical peels. The more coverage, the better! Additionally, if you will be performing services, be sure you’re named on the policy as a provider, too.
- Policy Type: Understand whether your policy is claims-made or occurrence-based.
- Claims-Made Policies: Cover claims filed during the policy term.
- Occurrence-Based Policies: Cover claims for incidents that occurred during the policy period, regardless of when the claim is filed.
- Tail Coverage: If you have a claims-made policy, consider obtaining tail coverage. Tail coverage protects against claims brought after the policy ends for incidents that occurred during the policy period.
- Named Insured: Ensure that the medical spa’s full legal name AND doing-business-as (aka “dba”) are both included.
- Unnecessary Coverage: Often, policies will include, for an increased premium, coverage for certain instances that may not be applicable to your business. For example, claims arising out of acts of terrorism are unlikely in a medical spa business.
- Ancillary Coverage: Cyber-security and HIPAA coverage can be critical in the event of unauthorized access of patient protected health information or other systems security breaches. Most insurers offer endorsements for this type of coverage.
- State Law: Certain states have coverage-limit requirements and thresholds that may exceed the coverage that your policies offer.
Making a checklist of these items and going through it each year, anytime you get a new policy, or when new services or service providers are added to your offering could save you from insurmountable financial consequences. If you’d like assistance in thoroughly reviewing your current policies or any quotes for new policies, please reach out to your Lengea team member so you can feel confident that you’re fully protected.