How to Insure Your Spa

How to Insure Your Spa

August 10, 2023 / 5 mins read

Your clients expect to leave your spa feeling refreshed and satisfied with your services.

Operating a spa, though, comes with the risks of an unsatisfied client, allergic reaction, injury, or lawsuit. Protect your spa with a spa insurance package that’s tailored to your business and the services it offers.

Your Western business insurance expert will give you top-notch insurance advice and ways to save so that you get the right spa insurance at the right value for you.

What types of spas need an insurance package?

You need an insurance package if you operate a spa that offers services such as:

  • Esthetician services
  • Eyebrow and eyelash services
  • Cosmeticians
  • Massage therapists
  • Microblading
  • Nail technicians
  • Spa attendants
  • Dry salt therapy
  • Waxing and sugaring services
  • Botox and/or Dermal Fillers
  • Chemical peels
  • Other cosmetic injectables
  • Laser treatments, including hair removal
  • Tattoo removal
  • Body sculpting

How will a spa insurance package protect my business?

You need to protect your Kelowna spa from the potential risks associated with its daily operations.

Without insurance, you would have to cover these costs out of your own pocket. Can you take on that kind of risk?

A spa insurance package can help protect you from these 3 common claims:

  1. A client at your spa slips and falls on a wet floor and has a back injury. Your spa gets sued for bodily injury damages. Your commercial general liability insurance, also known as slip and fall insurance, can help cover the injured client’s medical treatment, your legal fees, and a court-ordered financial settlement.
  2. After tinting a client’s eyelashes, she has an allergic reaction and needs medical attention. Your professional liability insurance may cover the cost of the medical expenses.
  3. A client who had a massage sues your spa, claiming that she was inappropriately touched by a massage therapist. Abuse insurance helps your spa defend itself against these allegations.

As a spa owner, here’s an insurance check list:

  • Do you have the best business insurance rate for your spa?
  • Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for your business?
  • Is your number of employees up to date?
  • Do you know the value of equipment at your spa and is it properly insured?
  • Have you thought about the consequences of your spa being forced to close down temporarily due to a flood or fire?

Of note:

Your spa insurance policy is designed to cover you as the owner and your employees. If you have independent professionals working at your spa who are not your employees, they need their own liability insurance.

If your clients sign a liability waiver, it may not protect you in court if you are sued.

A spa insurance policy will provide you with financial support if a client is injured on your property, or by a service that you provide, or by a product purchased from your spa.

Professional Liability Insurance: It’s also called errors and omissions (E&O) insurance or malpractice insurance.

Professional liability insurance coverage helps protect you and your employees from allegations of misconduct, negligence, or failure to deliver a service your spa provides as advertised.

It’s designed to cover your legal fees and any financial judgments against you in court.

If your spa provides services such as Botox, fillers, laser treatments, or tattoo removal by a licensed healthcare professional, you would be expected to have medical malpractice insurance.

Commercial General Liability (CGL) Insurance: This type of insurance is also called “slip and fall” insurance because it protects you against day-to-day risks while running your business.

CGL insurance can protect spa owners against claims of third-party bodily injury or property damage that occurs at your business. For example, if an injured client sues you for damages, it helps cover your legal expenses and any financial settlement ordered by the court.

It’s important to note that without commercial liability insurance, you would be responsible for paying any liability costs out of your own pocket.

Your CGL policy also can help protect you from libel, slander, and false advertising allegations.

How much CGL insurance do I need?

It’s not uncommon that a spa would carry $2 million in CGL coverage or more, depending on its size and services.

The size of your spa, number of employees, and claims history will be factors in how much CGL insurance you need.

Commercial Property Insurance: It protects your spa business and its contents from insured risks that can happen, such as fire, theft, flood, or vandalism.

If vandals smash a store window, commercial property damage could cover the costs of replacing the window and cover any damage or vandalism inside your business.

Commercial property insurance typically includes flood insurance, but what if there’s a heavy rain and the sewers back up and your business is flooded?

You should consider adding sewer backup or overland flood coverage extensions, which standard business insurance policies typically do not cover.

Business Interruption Insurance: If there is an insured loss at your spa business that’s severe enough to prevent it from being open, the expenses associated with getting your business running again will be covered.

This type of policy usually covers vandalism, fire, wind, flooding, and other risks (make sure to understand what your policy covers). Your policy will help compensate you for lost income and expenses that you will need to continue paying even while you are unable to work.

Cyber Insurance: If your spa processes debit and credit card transactions, online or in person, you need cyber insurance. Your system could be vulnerable to cyberthieves.

Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your -spa’s computer system if it’s hacked.

You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform customers affected by a breach.

Commercial Auto Insurance: If you have a business car that you use for your spa business, it won’t be covered by your personal car insurance policy. You will need commercial coverage as part of your insurance package.

What do I do if my spa has an insurance claim?

  • Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
  • Know your policy so that when you contact your broker you are familiar with what will be covered or not.
  • Document the damage. Take photos right away and write down what happened.
  • Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
  • Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
  • Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get your Kelowna spa the right insurance package. Our experts are available now to help you navigate the business insurance journey to protect your spa business.

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