How Much Does Estheticians Liability Insurance Cost
According to the Bureau of Labor Statistics, the Esthetician job market is expected to grow by 14% by 2026. It’s not surprising that this profession is an easy choice when looking for a business to start.
As an Esthetician, you go to work every day and make your customers feel beautiful and healthy. You can affect real change in people’s lives and the way they see themselves, and it is incredibly inspiring.
So you passed your license exam and found a spa to work in. Now what? Now is the time to consider purchasing a Professional Liability Esthetician’s policy.
Today we want to talk about how much this type of policy costs and what are the factors contributing to that cost.
How much does Professional Liability Insurance cost?
An answer to this question, as many answers in the insurance world, is “It depends.” Typically, the policy for a salon esthetician starts from around $513 a year, but this premium may fluctuate based on several factors. Remember no two policies are exactly the same since the insurance company takes into account not only the type of policy you are purchasing but also unique factors about you as well as combinations of coverages that another policy might not have.
Factors that determine a policy’s cost
Some of the factors which have an influential impact on determining the cost of your policy can include:
– Carrier’s base rates: before any discounts or surcharges the insurance company will have a baseline rate they start with
– Types of treatments: the riskier Esthetician fields that engage in treatments that incur higher cost lawsuits or more frequent lawsuits will result in a higher rate. Typically, a medical Esthetician will be more expensive from the insurance standpoint than a salon Esthetician
– Industry experience: Experience plays a huge role in how likely you are to get sued as an Esthetician. Even though many Estheticians eventually have to deal with a lawsuit, the less experienced you are, the more chance that you make a mistake. Your rate will be higher if you are just starting out and you can expect it to go down as the time goes by and you gain more experience and obtain an industry-recognized certificate in your field.
– Policy limit: Policy limit affects your premium as well. In some instances, the higher the policy premium – the higher the policy cost
– Deductible: A deductible is the portion of the claim that you promise to pay. The higher your deductible (i.e., your portion of the cost of the claim) the lower the premium.
– Coverage for multiple estheticians: The more people are insured under the same policy, the riskier that policy is for the insurance company, and thus the more expensive it’ll be for you. If you are a salon owner and have people working for you, your policy will cost more.
How can I save on policy premium?
The only two factors that you can play around with to affect your policy premium are the policy limits and deductible. The Professional Liability policy limit starts at $500,000 and can go up to $1M, $2M or even more. A deductible for a small operation is $1,000.
Aside from increasing your deductible and lowering your limits of liability, you can also make sure to obtain industry-recognized certifications to obtain professional discounts (if the carrier offers them – not all do).
Why you need a Professional Liability policy?
As you can see many factors determine the cost of Esthetician’s Professional Liability policy. However, you might be asking – why should I add on another expense, especially if a salon I work at has a policy anyway? Or maybe you are thinking – I am careful, and very good at what I do. Why would anyone sue me?
The answers to these questions will highlight why it is so essential to have an Esthetician’s Professional Liability insurance policy.
Let’s start with answering the second question, first.
I know what I am doing, would I still get sued?
The beauty industry is a very litigious environment. As an Esthetician, you hold someone’s health and beauty in your hands. Even if you are the world’s best Esthetician, mistakes still happen. After all, you are human!
Sometimes the occurrence will happen due to an error on your part. Sometimes it can be something as simple as an equipment malfunction. More so, sometimes the unfortunate incident will be of no fault of yours at all, but that of your client. Your client could forget to disclose relevant skin condition or allergies, or even push you to finish the treatment against your recommendations.
So what are your some common exposures as an Esthetician?
– burns due to waxing
– allergic reactions
– chemical burn because of chemical peel treatment
– laser burns
Personal vs. spa insurance policy
It’s a common misconception that the spa’s Professional Liability Insurance policy covers the Esthetician employees and contractors individually.
At the very least, the below considerations warrant a serious discussion with salon’s owner to make sure that you know precisely what coverage their policy affords you.
– Side hustles – The master policy of the spa you work for specifically excludes any work that is not done as your work for the spa. The carriers have to include this exclusion to protect themselves from a barrage of claims they will otherwise get that they didn’t properly charge the premium for.
This means that if you decide to take on a client in your spare time or do a favor for an old friend and perform some treatments for them – you are not covered by your employer’s policy.
If a lawsuit is brought in as a result of this “side hustle” the policy will deny the claim. If you think there is even a shred of possibility that you will agree to take a client outside of the spa, you should strongly consider purchasing your own professional liability policy.
– Coverage for an individual – Even if you are sued for a treatment that you performed at the spa, it is not a guarantee that you will be covered. Some Professional Liability policies will only provide the coverage for the entity, and the employees that were working on its behalf. What does it mean for you? If the lawsuit named you specifically along with naming the entity (as they often do), the policy would only cover the cost to defend and the settlement associated with the entity. You, the Esthetician, will have to pay out of pocket for your own defense as well as your portion of the settlement.
When discussing insurance with your employer, it’s important to mention these two issues.
Another reason to not rely on the spa’s insurance policy is that you simply don’t know what kind of exposures are insured. Sometimes only limited types of treatments are insured as a way to save money at the beginning, but the policyholder fails to update them as the business grows. You also don’t have control over getting the policy renewed. You might find yourself with an uncovered claim due to an expired policy that wouldn’t have covered the specific treatment anyway.
The costs of hiring an attorney, court fees and of course the settlement can add up to hundreds of thousands of dollars. For a growing business, adding yet another expense may seem daunting, yet it could save you thousands of dollars in legal fees.
Unfortunately, there is no clear-cut answer to the question of “how much will a Professional Liability Insurance policy cost me?”. However, that might not be the right question to ask.
It often helps to see the other side of this particular coin by asking: “What is the cost of not having a Professional Liability Insurance policy?”. That question we can answer definitively – lawsuits are exhausting and expensive. Just the cost of hiring an attorney can add up to thousands of dollars, depending on how many hours your case takes. By not purchasing a policy, you might be saving $400 a year, but when a lawsuit hits, your out of pocket cost could be that premium X 100.
An Esthetician, Professional Liability Insurance, is essential whether you are an experienced business owner or just starting out. Bizinsure can provide you with instant quotes as well as human support on the other side of the screen (or the phone!). Click here to complete a short online form to receive your quotes instantly for Esthetician Lability Insurance.
 Bls.gov. (2018). Skincare Specialists : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics. [online] Available at: https://www.bls.gov/ooh/personal-care-and-service/skincare-specialists.htm#tab-6 [Accessed 23 Aug. 2018].