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Obtaining Medical Malpractice Insurance for your Med Spa Operations

Whether you are opening up a new med spa, or changing some of the performed procedures at your existing facility, there are a number of factors that you will want to consider when obtaining medical malpractice insurance for your med spa.

Who Is Covered? Traditional Physician Policies vs. Medical Spa policies

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It's important to know who is covered and who is not on your med spa liability insurance policy
You should always check the policy provision in the policy that you are considering. This is normally found the section titled “Who Is a Protected Party?”, “Who is an Insured” or similar language.

Traditional Physician Policies are usually set up with an individual as a primary named insured. They may include the entity name with either shared limits of separate limits. Additional Healthcare Professionals such as other MD’s, NP’s, PA’s, DO’s have to be underwritten, approved and scheduled onto your policy. People who are not defined as Healthcare Professionals such as RN’s, employees and technicians are automatically covered for their work on behalf of the named entity.
A medical spa policy on the other hand, is usually set up under the entity name as the first named insured. Healthcare Professionals such as MD’s, DO’s, NP’s and PA’s have to be underwritten, approved and scheduled specifically for the procedures they will be doing at the spa. The Medical Director may or may not have automatic coverage. Independent contractors such as doctors, nurses, medical directors, and anesthetists who are not employees will also have to be underwritten, approved and scheduled. People other than Healthcare Professionals may also have to be underwritten for their work on behalf of the named Medical Spa.
The definition of “who is covered” can vary widely from policy to policy so it’s very important to know and understand who is defined as a covered person automatically on your med spa policy versus who you will need to get approved. Make sure to go over your scope of operations and employment structure with your broker to make sure that the entire direct patient care and vicarious exposures are covered.

Who is the Named Insured on the Policy?

Your med spa policy should clearly define the Named Insured. Below is sample policy language that a leading insurer uses when defining who is an Insured. In the below example, you will see that physicians and independent contractors will have to be scheduled if they are an MD or other Healthcare Professional but coverage is automatically extended to the Medical Director.
Insured means:
1. Your current and former employees, principals, partners, executive officers, directors, members, managers, stockholders, trustees, volunteer workers, or medical directors while acting on your behalf within the course and scope of their duties; except coverage will not be afforded to the following professionals: physicians, dentists, ophthalmologists, chiropractors, podiatrists, nurse midwives or certified registered nurse anesthetists (CRNA’s).

2. Any student enrolled in a training program, but only while acting within the scope of their duties as such and under the direct supervision of faculty members or educators of such training program.
Endorsements may need to be added to cover staff such as aestheticians and nurses
Endorsements may need to be added to the policy to cover staff such as aestheticians and nurses
You will also note that aestheticians and nurses are absent from the above policy language. In this instance you will have to look for an endorsement that automatically adds these types of employees. Or, more commonly, you will need to disclose these persons to the underwriter and they will be scheduled onto the endorsement showing their individual name and/or the procedures they are approved to do.

As this is just an example of one of the leading carrier policy forms, you will need to check your own offer of insurance or policy to confirm your coverage.

Be Aware Of Who Is NOT Covered?

Pay close attention to who is not covered on your policy. If they are not covered in the policy definition, there is no automatic coverage. You will need to have a separate endorsement listing the individual or group of individuals and the procedures they are doing, If your policy does not have this, then there is no coverage afforded to these individuals.
Independent Contractors, RN’s, Nurses, Aestheticians or Physicians may also have a separate policy for their work at your spa. In these instances, you will need to get a copy of their certificate of insurance and provide it to the underwriter. Upon underwriter approval, this will protect you for vicarious liability you have from their work at your spa. Likely these Independent Contractors will be covered in your policy by scheduled endorsement.

Other factors to consider when obtaining coverage for your med spa:

  • There can be exclusions in your policy such as sexual abuse or sub limits.
  • There can be endorsements restricting coverage. For example, if you open your med spa with the intention of only performing laser hair removal, your insurance policy will reflect that. If at some point in time, you decide that you want to include other procedures such as Chemical Peels, Botox, Microdermabrasion or other procedures, you may not be covered for them until you provide your proof of training to the underwriter and obtain a coverage endorsement.
  • There can be an Injectable Limitations Endorsement which determines who can break the skin. If your policy includes an Injectible Limitations Endorsement, you’ll want to make sure it is tailored to those procedures you are doing in your spa and the people who are doing them. Oftentimes, this endorsement will tell you who is included, so whoever is not listed is excluded.
  • Is general liability included in your policy? – Many times it is not, so if for example you have a patient who slips and falls at your med spa, you can be held liable.
Some of the industry jargon that you’ll find on your med mal policy can be confusing or ambiguous, so it’s always a good idea to have a good broker in your corner who will discuss your coverage with you and make sure that you are covered for any direct patient care or vicarious exposures that your med spa and the employees of the med spa will face.
CoverMD™ connects you directly with skilled professionals who work with you to make sure that you understand your med spa insurance policy thoroughly and will help to point out any gaps in coverage that you might face. Part of their expertise is having the foresight and understanding of the potential exposure that you could face. A policy that is set up but doesn’t include the intended personnel or procedures is not worth the paper it is printed on. These trained professionals will walk you through the entire process and will work closely with you to make sure you have a solid medical malpractice insurance policy for your medical spa in place.

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