Medical Spa Insurance: What you MUST KNOW before choosing!
In this interview Jason Kunz shares EXACTLY what you NEED TO KNOW about medical spa insurance. Jason also lists the questions you must ask before choosing an insurance agent for your med spa.
In this episode on medical spa insurance, we discuss:
- Why traditional business coverage is NOT enough.
- The three main types of coverage every med spa needs to protect their business
- Why if you’re renting an existing space you probably aren’t covered
- The recent changes you must know that are directly impacting medical spa insurance coverage!
Make Sure Your Med Spa Is Protected with These Simple Medical Spa Insurance Tips...
Is your med spa covered with a “traditional business owner policy?”
If so, stop what you’re doing and take notes!
One of the most important topics any med spa business must consider is insurance. In this episode, I talk with Jason Kunz to discuss the type of insurance coverage medical spa owners need.
Almost all med spa owners are shocked during their initial conversation with an insurance agent. Jason says a traditional business owner’s policy simply will not be sufficient for your med spa! A traditional policy does not provide the coverage needed for most medical spas. Because of this, Jason shares three essential types of insurance coverage.
“A typical med spa has services and procedures that require a physician’s oversight, which triggers a higher liability.”
Here’s what your med spa needs:
- Professional liability insurance coverage which provides coverage for the procedures and services offered to the general public.
- General liability insurance coverage which is vicarious liability covering accidents like a trip and fall involving a client or employee.
- Equipment and office contents insurance coverage for fire and theft losses.
*** NOTE – For staffed medical spas, workers’ compensation may also be necessary
So… Are You Covered Because You Are Renting Space?
It’s common for many med spa owners to rent spaces in an existing facility. It’s a common assumption that general liability and business office contents coverage is already taken care of by the building owner — but this is false. Renting space in an existing facility DOES NOT alleviate you from claims. As the medical spa owner, this is your responsibility.
Jason explains, “Even though you’re renting within somebody else’s facility, it’s still YOUR company and YOUR patient.”
For that reason, all three types of medical spa insurance coverage are necessary. Furthermore, this is true even if you’re operating on a smaller scale, such as a one-person operation renting a room. You need professional and general liability as well as equipment and office content coverage.
Industry Changes Currently Hitting the Insurance Agents’ Radar
Insurance agencies are seeing changes in claim frequency. As a responsible medical spa owner, you need to make sure these changes are on your radar as well so you can protect your clients and your business.
Here are the types of claims showing a recent increase in frequency:
- Employee allegations against the company/owner regarding sexual harassment, wrongful termination or discrimination.
- Client ramification and claims resulting from cyber attacks and/or data breaches.
- HIPAA compliance – this can be as simple as a patient asking for a copy of their reports and accidentally receiving another patient’s medical record.
When choosing an insurance agent for your #MedSpa - you MUST find someone with industry specific experience like Jason Kunz from @nfp #Truth #MedSpaMarketing
3 Questions You Must Ask When Deciding on a Medical Spa Insurance Agency to Ensure You Get the Coverage You Need:
As a medical spa owner, ignorance is an absolutely unacceptable excuse when it comes to legal issues. One claim can cripple a Med Spa permanently.
A single claim can be a massive expense and cause irreparable damage to your reputation. For that reason, when deciding on a medical spa insurance agency to guide you through the murky waters – YOU MUST BE PREPARED!
Here are three questions you should ask before moving forward with a medical spa insurance agency:
- What is your knowledge of the medical spa industry?
Avoid your longtime friend or neighbor, who is an insurance agent and a nice guy or gal, but does not have industry specific knowledge in the medical spa space. Jason assures us it’s extremely important to find someone who has knowledge in the medical spa industry. Above all, that agent should be very familiar with the professional liability claims associated with this particular industry.
- Are you an independent agency?
It’s in the medical spa owners’ best interest to work with an insurance agency that doesn’t just represent a handful of companies. It’s important to find one that can work with you and get you everything you need, and that can shop around to make sure the coverage suggestions are being tailored specifically for your med spa needs.
- What is your approach to working with a medical spa (is it a team or an individual agent)?
Jason shares the importance of a team approach to medical spa insurance. A team provides extra sets of eyes when it comes to research, industry needs and customized coverage suggestions, and will uncover the best coverage solutions for your medical spa’s immediate needs. Similarly, it will also help eliminate any oversights and ensures assistance for your long term business growth and protection.
Full transcript of interview on Medical Spa Insurance: Exactly What Your Need to Know...
Hello and welcome back to the Med Spa Growth and Profitability Podcast. I'm your host, April Iannazzone, the growth and profitability strategist. I'm excited for today's interview because I'm joined by Jason Kunz.
He's a senior account executive at NFP. Jason has been licensed in the insurance industry for more than 20 years. He maintains the designation of a certified insurance counselor, demonstrating his expertise and commitment to the industry.
Early in his career, he was intrigued with the unique insurance exposures presented by the medical spa industry. He dedicated himself to specializing in insurance solutions for this niche industry with great success.
Representing the leading insurance companies available in today's market, Jason is able to tailor coverages to meet the medical spa owners' specific needs. As an agent, he has built large portfolios of clients over the years. He's most proud of the relationships that he's built with his clients along the way.
Jason, along with his team, provides exceptional service and risk management solutions for his clients. With his extensive background in the medical spa insurance industry, Jason is able to personalize solutions that meet the needs of a wide variety of clients, both large and small from across the nation. So thank you very much for joining us today, Jason.
Thank you, April.
I'm really excited to have you on, as I mentioned, because you specialize specifically in this industry, whereas most commercial insurance agents will take any business that comes their way. You know, they are, for lack of a better word, "jack of all industries," rather than specializing in the Med Spa space. I really am looking forward to giving our audience some really deep insights into actually insuring that practice as well as their uniqueness as an owner of a medical spa.
Wonderful, well, I'm glad to help.
So can you tell us a little bit of your background for the Med Spa industry?
I've actually had the pleasure of working with the medical spa industry for over 15 years now. Our program is nationwide, so pretty much in any state that you're here in the United States, we're going to be able to help out. I have the pleasure of working with medical spa owners from a one person operation to multiple locations and multiple states and so on.
What I try to do is just tailor the insurance coverage based upon what the owners are needing.
I love that. And I know there's a wide variety of different types of insurance, different types of coverage. What do you think is needed for the medical spa owners?
Great question. When I'm usually working with a new medical spa owner, they're often surprised to find out that a traditional business owner policy does not provide the adequate coverages needed tailored to a medical spa.
A typical medical spa has services and procedures that they're offering that require a physician's oversight. And that's usually where the higher liability comes into play. I would say that there's three main insurance coverages needed that every medical spa owner is going to need.
The first one's going to be professional liability insurance coverage. And one that is going to be providing the insurance coverage for the procedures and the services being offered. The second is going to be general liability insurance. That's basically vicarious liability, trip and fall types of us scenarios and things of that nature.
So basically the one that normal... every other business should have.
Exactly, yes. The general liability along with the third one, which would be equipment and office contents coverage for fire and theft losses. The general liability and the contents are pretty universal across all businesses would be needing.
I would say those would be the three main ones and then depending upon if the medical spa has a staff, they would also be needing assistance with worker's compensation.
Wonderful. Can you speak a little bit more about the first type, because I'm curious. When medical spa owners come to you for insurance, did they realize they need that first type? Or do they usually come to you for the second and the third?
Great question. Well, they know that they're typically needing an insurance coverage and what they usually are concerned about is the liability. They just recently bought some sort of large piece of equipment that they obviously want to have being protected and stuff and so that's usually where the conversation starts. But then we kind of get into it.
We start talking about their actual day to day operations. Even though I said that the, you know, the big four, they're the professional liability, that general liability and the contents.
Once you start talking with the business owner, you can tailor insurance coverages as needed. Let's say for instance, you know they have a lot of refrigerated items that they're going to be using.
Well then they're going to probably be needing spoilage coverage, things of that nature. Also business income, you know, God forbid if there was like a fire loss. For the professional liability really what we're dealing with there is coverage for not only the corporation entity, but also the owners.
It's important to note, even the staff members working on behalf need to be covered. And yes, that includes independent contractors. Sometimes they may have relationships with a person that may be only working part time on an independent basis, but they are still working on behalf of the corporation entity on that corporation's patients.
Definitely makes sense and definitely why you need someone that specializes in this industry rather than a normal insurance agency.
Perfect. Okay. So that, that explains a lot. Thank you for sharing that. And that again is why you definitely want somebody that specializes in medical spa insurance. This way your agent can make sure that you're fully covered on every single basis. They know the coverage you need and they're not really guessing for your industry.
I know that, with our clients and across the board, most people are renting the different spaces rather than owning the building. Some rent a room to work out of somebody else's practice? Can you just speak a little bit about that?
Yeah. A lot of times there is a missed assumption that if you're renting a room within another facility, the facility your renting the room from is providing the general liability - the business office contents coverage and that's actually not the case. Even though you're renting a room within somebody else's facility, it's still your company and still your patients.
Awesome. I am assuming that the actual owner of the bigger operation needs to have specific coverage too? If they're renting the room or how do they get out of that liability to be liable for somebody else just renting the space?
Well that's great. They usually do that with the landlord by doing a sublease to identify and since it is a separate entity with their own separate clients. It's really not that big of a deal because the entity that's allowing the room to be rented has her own proper insurance coverages.
Therefore, they're being covered and the person that's renting the room has their own separate coverages so they're be covered and so they do not commingle.
Wonderful. That definitely makes sense. Now, what type of insurance coverage is needed if the owner would like to offer their services anywhere they are licensed to?
I referred to that as like a mobile med spa type of business and it's good. Sometimes, when they get the Med Spa owner is just starting out they would like the flexibility of being able to offer their services anywhere they're licensed to do so.
So working with an informed insurance agents is very important that situation. Most of the medical spa insurance professional liability policies out there is a designated location policy.
So in the policy by address is identifying where the procedures and services are being covered at. With a mobile med spa, we need to be lining up with an insurance company. That company must be flexible and basically provided insurance coverage anywhere that person's license to offer their services at.
Now typically with those insurance companies, they have the flexibility provided the mobile medical spa insurance coverages, that they still want to make sure that the services that are being provided are going to be in a sterile environment.
Yes, that definitely makes sense and I think that's something that is very important to think about because most people figure, 'okay, I have insurance, I'm covered wherever I want to go', so this is definitely something that you want to address.
In fact, you know, we had a trade show or an expo for women that we produce and we had different med spas that wanted to come and offer some free services as an example while they were demonstrating and it's something that we had to make sure that they had a separate insurance policy just to cover these events. It wasn't something where they could just come out.
So it's something you want to definitely be aware of, whether you're just using it as a demo purpose at an event or whether you actually have a mobile spa and you are bringing it in different areas or are going to people individually. So definitely makes sense.
What types of changes have you seen in the medical spa industry because there's been a lot of things happening in the last couple of years.
Well that's a great question there. The insurance companies are typically reactionary when they start seeing claim frequencies coming in from different aspects then the obviously spend focus on it. There has been some different aspects of the medical spa that we've been seeing increased claims on. One as a business owner, employment practice, you know, situations where an employee is bringing forth an allegation against the company owner regarding either a sexual harassment, wrongful termination or discrimination type of a claim.
In addition to that unfortunately with cyber and data breaches, malware, those things can really be attacked and it doesn't really matter if you're a medical spa and, or any sort of business owner. It can really cripple a company if all the sudden you get hacked into and the madness and the ramifications that can cause because of that.
Then probably a third category we've just been seeing some increases and claims on unfortunately is HIPAA compliance. It can be as simple as a medical spa owner, you know, patient asking for a copy of the reports and accidentally sending in somebody else's medical history, of course by accident. And it can be that simple sometimes and all of a sudden you get in an HIPAA violation infraction. It's nice to have some insurance protection for that.
That makes perfect sense because, you know, even in, daily life, right? We accidentally replied to the wrong email or you know, we attached the wrong file. It could happen, you know, and totally that where the practice doesn't want to share other people's information, but it could happen and you have to be protected. And hopefully you have a client that understands, yes, you know, this was a big mistake and you regret it.
And like all of these different things that you try to portray to them, but you never know somebody may want to follow through. And if you don't have this in place, like you said, it can crumble your whole practice.
Yes, very true.
So what are the types of training that you're required to be eligible for insurance coverage?
Well, again, most of the medical spa, well not most, I would say medical spa are usually owned by either a physician or non-physician. And so if it's physician owned, usually the physician title or like a nurse practitioner or those things of that nature, the experience and expertise that they already have typically gives the training that's already needed.
For aestheticians and things of that nature, usually the medical spa insurance carriers typically like to see a minimum of 30 hours of training. Now what's nice is the insurance companies do not dictate what institution they have to receive the training from. I mean most reputable training institutions out there nationwide can provide the proper training out there. And most training institutions typically have a 30 to 50 hour training process.
So that usually satisfies the medical spa insurance requirements.
Awesome. That makes sense. And you were hitting it on the head when you said, you know, there's two different types of owners. There's a physician owner or a non-physician owner. And what we've been seeing is a lot of different salons, hair salons or even tanning salons are now trying to offer these medical spa type services. And they just assume that they can because they have the right equipment.
Or they purchased the equipment but they're not overseen by a physician. So what are the types of questions for those that are listening that may not necessarily have all the legalities in place?
So for offering these types of services and maybe they do want to transition to offering more medical spa services. What are the types of questions that they do need to be asking their insurance company? You know the one that will ultimately raise the red flag for themselves saying, "oh, we're not, we're not okay doing this?"
So just make sure I'm understanding. What you're talking about is how a medical spa owner can seek out a reparable insurance agent to work with?
Not yet, I do want to ask that one.
I guess, they're not really medical spa, but they want to offer medical spa services. So maybe they buy pieces of equipment and they have commercial insurance but they're not licensed or they don't have the insurance for a medical spa.
So like, let's say a tanning salon now they have an esthetician that they brought on staff and they want to offer these different services, what are the questions they should be asking their commercial insurance company to say where it would throw up a red flag to say 'hey, you can't be doing this or you need to be bringing a physician in order to do this'?
Great question. Usually what happens is when they are looking to start offering a service that they've not offered in the past, the first thing that they should do is definitely talk to that new service with their current agent. Now, a lot of times when a company is transitioning to kind of growing their company, a lot of times they grow out of their current insurance program.
So like you mentioned tanning salons, if a tanning salon all of a sudden wanted to start offering laser hair removal as an example, they would definitely need to be changing insurance policies from a tanning salon type of a policy to more of a medical spa policy. Because medical spa can definitely help out with the tanning industry because there's a lot of tanning services that are tied to medical spas and things of that nature.
But if you're just strictly a tanning salon that's kind of morphing into medical spa services, most tanning salon insurance carriers are not comfortable with that. And so then at that point in time, they need to be working with an insurance agent who can line you up with medical spa insurance coverage based upon the new services you're now looking to offer.
Perfect. And so just to recap that, if you're adding additional services, you definitely want to double check with your current coverage because even with a medical spa, when you're adding additional services, you want to double check to make sure that you're fully covered because you don't want to assume that you're covered for everything. It's definitely something that you need to have written out in your policy.
Now, Jason, what are some of the key things that the owners or the directors need to really look for in an insurance agent?
I would say first of all, knowledge in the industry. A lot of times a business owner will already have some sort of relationship with an insurance agent. It could be their homeowners insurance agent. Maybe it is your automobile insurance agent? So out of ease, they'll go to like their homeowners insurance agent.
You may think, "I know that they do business insurance". And yes, they easily may do some mainstream business insurance, but they are NOT who you are looking for as a Med Spa owner. What you're really looking for, is somebody who has knowledge in the medical spa industry.
An agent like myself, who is very familiar with the professional liability claims made insurance policies that are associated with this particular industry first and foremost.
Secondly, I would say you'd want to be working with an insurance agency that is an independent insurance agency that doesn't just represent one or two companies that can actually work with you, get you everything that you're needing then obviously take that information and shop around with multiple insurance carriers to not only making sure that they're tailoring the insurance coverage appropriately, but at a very competitive price. That's a nice job drawn way to do it.
Lastly, I would probably say, working with an agency that has a team approach. It just seems like in today's society, having a second (or even third) pair of eyes is really important. It's especially in the medical industry because it is a very fast paced industry.
There always seems like there's new procedures or services being launched. Sometimes when there's a new procedure out there in the industry, the owners are so anxious about going out there and doing it.
You want to make sure you're working with the team that does the research and the background and makes sure that this is an endeavor that's going to work out long periods of time. So you know, I would say knowledge in the industry, a nice independent insurance agency and gets you some shopped around rates and somebody that can bring you the team approach.
And with the independent insurance agency, that is definitely, they will have your best interest in mind. They're not just going to get you the best policy for you, but like you said, shop it around to where you're going to get the best coverage and the best value. And I love that you mentioned that they really want to be industry focused and when you're coming to them with new products or services, they already know that those products have been introduced in the industry.
You don't have to really educate them on those new products when you're going to see them. I have a couple more questions for you and then I'm going to let you jump off.
My next question is, when you're working with the owner of a medical spa, can you also help them with other personal type insurance or coverage for health insurance or life insurance, or is it something that you just really stick to the commercial policies?
Personally, I do a lot with the medical spa business owners. But as an agency...NFP, yes, we try to help out everybody. So if it's their home, their auto and life insurance, disability insurance, long term care insurance, we've got you covered.
We try to help everybody out there because if our customers pretty much have a need for all of these things and so we try to be a one stop shop for them if we can.
I love that! That goes back to finding one that has that good support team around them, an agency that has a good support team. So Jason, where can, if our Med Spa owners are based in the US and they want to work with you, where can they learn a little bit more about you?
Probably doing one of two things: You can reach out to me via the website and my email address. My email address is Jason.Kunz@NFP.com.
Likewise, just picking up the phone and give me a call. I'd like the opportunity to talk with medical spa owners. Especially if you're a new medical spa owner, early in the process. Because everything that we've talked about so far is insurance related.
But a lot of this has to be doing with their relationship with their attorney too! To make sure you're up to speed with state laws. As well as to make sure that their consent forms and medical history forms have all the t's have been crossed and the i's dotted...so to speak.
Awesome Jason! That is a very good point. So even if you're not quite ready for the insurance policy, you definitely want to reach out to Jason and have a consultation.
I am going to actually put your email, your phone number and your website below in the show notes. I will also included them on our website so everybody can find you and learn a little bit more.
Thank you for sharing your knowledge today. It was definitely insightful.
Well, April, thank you so much. I appreciate the opportunity. Yes, please give me a call. I'd be happy to help them out with these sort of questions they may have.
Perfect. Thanks so much.
Thank you, April.
Guest Expert on Medical Spa Insurance for Med Spas - Learn more about Jason Kunz and NFP:
Jason Kunz is a Sr. Account Executive with NFP. Jason has been licensed in the insurance industry for more than 20 years. He maintains the designation as a Certified Insurance Counselor, demonstrating his expertise and commitment to the industry.
Early in his career, he was intrigued with the unique insurance exposures presented by the medical spa industry. He dedicated himself to specializing in insurance solutions for this niche industry, with great success. Representing the leading insurance companies available in today’s market, Jason is able to tailor coverages to meet the medical spa owner’s specific needs. He has built a large portfolio of clients over the years, but is most proud of the relationships that he has built with his clients along the way.
Jason, along with his team, provides exceptional service and risk management solutions for his clients. With his extensive background in the medical spa insurance industry, Jason is able to personalize solutions that meet the needs of a wide variety of clients, both large and small, from all across the nation.