Navigating the Insurance Minefield: A Guide for Clinic, Salon and Spa Owners

Running a clinic can be risky, with the complexities of the expectation of the clients for you to meet their needs.  Choosing the right insurance is essential to protect your reputation and safeguard your business. At Sparrow, we understand the challenges that you face when you are searching for insurance and what all these insurance words mean as well as the context.

Some of the common questions we get:

1. How do you know what insurance suits you best?
2. How much protection do I need?
3. Does the insurance protect my team as well as myself?

You could be forgiven for feeling overwhelmed. It really feels like a mine field.  Below are the most common types of cover that would go a long way in providing protection subject to things like the treatments you provide, their size and the options you choose.  But before we delve into the types of insurance, what is Beauty/Allied Health/Aesthetic Insurance?  It is defined by us as the combination of policies that cover professionals in the Beauty/Allied Health/Aesthetic industry against risks involved in the day-to-day operation of their business.

• Professional Indemnity/Medical Malpractice – Designed to protect your clinic and or employees when a claim arises whilst providing professional advice or services. Claims of negligence, mistakes, or injuries caused during a treatment.
  • An example of some of the benefits of this policy: Protection of negligence, mistakes, advice or injuries caused during a treatment.
  • When might this policy benefit me?: This policy benefits everyone providing treatments, professional training. A number of professionals are required to provide their Certificate of insurance documentation in obtaining a licence to provide certain treatments

• Public Liability Insurance – As a Business Owner, contractor, including mobile operators you are liable for damage arising from conducting in your business.
  • An example of some of the benefits of this policy: Protection for incidents like slips and falls, for your clients. Accidents or injuries that could happen to clients in and possibly around the clinic
  • When might this policy benefit me?: This is a requirement when leasing a premises, household insurance would not cover a clinic working from home if their client trip or had a fall
    
    
• Product Liability Insurance - Part of running and operating a beauty business is to sell or supply products. Product liability insurance protects you from any personal injury or damage caused by your goods. If a client makes a claim against you for developing an irritation, product liability insurance may cover the compensation costs.
  • An example of some of the benefits of this policy: Protection for the business in the event a situation arises caused by the products you sell or use.
  • When might this policy benefit me?: Any clinic or contractor who sell or use products.

Sparrow believes this policy works the best for our clients. Our underwriters have merged the medical malpractice/professional indemnity and public and products liability to support our clients

• Workers Compensation Insurance - Workers’ compensation is a mandatory requirement for all businesses to cover their staff and contractors in the event of an accident.
  • What it covers: If you have employees, also can protect Directors as well in some states in Australia. This is a legal requirement.
  • An example of some of the benefits of this policy: An employee is injured at work or on the way to and/or from work.
  • When might this policy benefit me? Any business with staff.
    
    
    
• Business Contents & Equipment Insurance - This protects your business, covering equipment and property damage from accidents, losses due to theft, fire, glass but not limited to. You may also want to consider Business interruption, for the potential loss of income, under certain sections of the business policy.
  • An example of some benefits of this policy: Theft, loss, or damage of your equipment and clinics contents. Many leases require business contents and equipment insurance as interested parties.
  • When might this policy benefit me? To protect your assets – large pieces of equipment that require a loan.

• Management Liability - Specifically for private companies and covers claims of wrongful management, employment practices breaches (wrongful dismissal or discrimination actions), crime (theft by employees or third parties), tax audit and statutory fines and penalties.
  • An example of some benefits of this policy: employment practices breaches (wrongful dismissal or discrimination actions), crime (theft by employees or third parties), tax audit and statutory fines and penalties.
  • When might this policy benefit me? If you are a private company and /or have staff.

• Cyber – This is a complimentary policy under our combined policy If you maintain a website or a digital record of your customers’ personal information, especially online, you are at risk of a data breach. This policy covers you from data theft (Sparrow believes in this policy so much our underwriters have included for free with the medical malpractice/professional indemnity and public and products liability).

There are a number of policies that are tailored for our clients. There is not one policy that fits all and not everyone needs everything listed. Some clinics will require more, others, less. I recommend if you are not sure please reach out to Sparrow for assistance.

About the Author | Sue Sparrow —Sparrow Insurance

Sue Sparrow is founder and senior broker of Sparrow Insurance. For Sue and her team, providing specialist insurance to the medical, wellness, cosmetic injecting and beauty industry, is her life passion.  It’s about personal connection and enduring relationships with people as they grow and evolve in careers and business.