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Insurance Wise

November 2009 issue of Skin Inc. magazine
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Unlike the many courtroom dramas on television, most legal proceedings are far from electrifying and don’t involve a lot of snappy dialogue. However, any legal action will seem dramatic if you happen to be in the middle of it. Although that may seem to be a remote possibility, today’s is a litigious society and having appropriate insurance coverage is a must.

Creative attorneys often name multiple parties in a lawsuit, leaving it to a jury to sort out who will actually pay a client’s damages. Even if you are technically in the right, you could still end up holding the bag. In addition to suing you, a client may go after your employer, landlord, the franchise owner, parent company and product manufacturer.

The basics

If you are a spa owner, you should have general liability or a business owner’s policy. (See Insurance Terminology for definitions of all the common policies for spas.) The complexity and size of your business determines how much coverage is needed. Smaller organizations can probably get by with just a business owner’s policy, but larger businesses need more comprehensive commercial general liability policies. Whichever is right for your spa, these plans will cover a washing machine that floods your work area, a table that collapses, a client who trips on icy steps, or an overturned candle that causes a fire or a waxy mess, which is a surprisingly common claim. Accidents can and do happen in any business, and having business property coverage is key because of your dependence on the facility and equipment to earn your living. Rhonda had more than $10,000 worth of equipment, accessories, products and a portfolio stolen out of her car. Three things worked in her favor: The car had been locked at the time of the theft, she filed a police report and she had property insurance.

Individual malpractice

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Insurance Terminology

Business owner’s policy. This is an insurance package that is generally designed for small- and medium-sized businesses, and includes property and liability coverage.

Claims-made coverage. This is liability insurance that is effective only for injury or damage claims filed during the policy period or a time designated beyond the policy period. Claims brought after a policy expires are not covered, even when the injury or damage took place during the covered period.

Commercial general liability. This is a common policy designed to provide a commercial enterprise with liability coverage for its premises, products, operations and completed operations, as well as personal injury. Premises medical payments are frequently included in this coverage.

General liability insurance. This is coverage for situations where negligent acts or omissions, or both, result in bodily injury or property damage, or both, on the premises of a business, or when an injury occurs in the general operation of a business.

Occurrence-form coverage. This is liability insurance coverage that covers injury or damages even after the policy has expired, as long as the insured’s policy was in effect at the time of the occurrence or event.

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