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Insurance Wise

By: Katie Armitage
Posted: October 26, 2009, from the November 2009 issue of Skin Inc. magazine.

page 3 of 4

Clients usually have a year or two to file a lawsuit before the statute of limitations expires. They often take that much time to do so. Some estheticians have no idea that a client is unhappy until they are served with papers for a lawsuit. This is already an unpleasant experience, but it becomes even more so if an esthetician’s insurance has expired. With the wrong kind of insurance, personal assets and future earnings may be at risk.

If the policy is what’s called claims-made, the protection expires when the policy does, even if an incident took place while the policy was in effect. A late claim can come back to haunt an esthetician who’s taking a break from esthetics or has changed careers. Occurrence-form coverage applies even after a policy lapses, as long as the policy was in effect when the incident occurred. It’s crucial to know what type of insurance you have, especially if you foresee interruptions in your career. Also, it is important to know the statute of limitations laws in your state. Of course, statutes vary depending upon the allegations, such as personal injury, property damage, wrongful death, libel, slander, assault and battery, and medical malpractice. The following Web site provides state-based information for personal injury statutes of limitations, which most likely would be the type of claim to be filed in skin care and spa situations: law.freeadvice.com/resources/personal_injury_statute_of_limitations.htm.

Paperwork protection

Roger had a client who came in for an intense pulsed light (IPL) treatment on his back, and the client later complained of discoloration to his skin. Roger had conscientiously used comprehensive release and consent forms, and he made sure these were signed. This protected him because they indicated that skin discoloration was a possible concern with IPL. In another case, the reverse was true. Caroline gave consent forms to a client before an IPL treatment, but they were never signed. Perhaps she was hasty—the oversight wasn’t discovered until the client was burned.

The right pick

In these tumultuous economic times, choose a stable organization when shopping for liability insurance. Financial rating services such as A.M. Best Company (www.ambest.com) and Moody’s Investor Service (www.moodys.com) are easy to consult online. Networking and Internet research are also helpful resources.

Knowing how to respond to a risk situation is as important as being prepared with the proper insurance. Educate your team members about how to respond to problems. A caring professional may be tempted to offer a free facial to someone who’s unhappy but in a court of law, this can be interpreted as an admission of guilt. The demeanor and attitude of the practitioner and spa manager are critically important—research has shown a dismissive response to a mistake weighs heavily on whether or not people sue their physicians.1