How Estheticians and Insurance Connect
The pursuit of beautiful skin is more than just an issue of vanity. Although commonly confused with dermatologists, estheticians primarily focus on cosmetic skin issues. Estheticians help individuals with a wide variety of skin problems and diseases. This includes common problems that affect the skin, such as eczema to lupus. In some cases, a dermatologist will refer a patient to a trusted esthetician, who may be better suited to handle particular skin care issues.
Often called “skin care therapists”, estheticians realize the importance skin plays in our lives and dedicate themselves to helping others have the best looking and healthiest skin possible.
Many estheticians must also deal with the common concerns that plague anyone within the health and wellness industry. This includes the trials that come with providing skincare advice and owning and operating a business. Each of these primary functions for a practicing and licensed esthetician can come with legal risks.
Whether you’re a new esthetician just opening up a practice or one who has been in business for some time, it’s important to know what insurance products you may need to protect yourself and your business.
Read on to learn more about the types of insurance you should consider as an esthetician.
Who needs Esthetician Insurance?
Estheticians are not licensed medical doctors and are not allowed to prescribe medications. However, estheticians must be licensed to operate a business. Estheticians offer advice, work in a physical location, and come into direct contact with customers, so there is a need for various insurance products.
What Insurance Does an Esthetician Need?
Different estheticians will have different needs. It all depends on the nature of your business and where you operate. However, licensed estheticians will all have very common concerns. Most need very similar insurance policies that match those needs.
Those who own and operate a business should strongly consider this type of insurance. There are two key areas that this policy covers that concern practicing and licensed estheticians.
This policy will insure:
- Bodily Injury Claims: Insures your business against claims of bodily injury related to your business operations.
- Property Damage: In cases where you or someone who works for you damages the property of others, a General Liability policy will cover claims.
You’ll Need This When…
Your business begins operating. It is risky to open a business without securing a General Liability policy from day one. Even on the first day of operation, it’s possible for an accident to happen for which you or your business could be held responsible.
If a customer receives a chemical burn from a product you use on his or her skin, you could be sued. A General Liability policy may insure your business against this type of claim.
Workers Compensation is one of the most common types of insurance policies. It is also one of the few which is required by almost every state. Workers Compensation will provide your employees with financial assistance if they become injured on the job while performing work-related duties. Depending on your state, you may have certain amounts of insurance you must purchase. You may not need to buy it at all in some locations if you only have a few employees. Those operating businesses in Texas are the only ones for whom there is no legal requirement to purchase Workers Compensation.
You’ll Need This When…
The moment you meet the legally required minimums for your state. In some states, this is as few as one employee. In other states, it could be 3 or more. Be sure to know the laws of your state and act accordingly to prevent getting fined.
If your receptionist is injured on the job after tripping on an exposed cord, he or she would qualify for Workers Compensation. If your business does not have this insurance, you could be sued directly by the employee for damages. In this case, the amount you pay could easily exceed the amount you would have had to pay for the Workers Compensation insurance premiums.
Business Owners Policy
A Business Owners Policy is an insurance product that covers multiple insurance categories. Specifically, this policy will act as a combination of two, important policies: General Liability and Property Insurance. General Liability is a must have for estheticians and estheticians who operate businesses out of their homes may have an interest in Property Insurance, which insures physical property owned by the business.
You’ll Need This When…
You are planning to open your business. You will need multiple forms of insurance. As this policy covers multiple areas, it may be a good option for those looking to hold fewer individual policies.
If an employee drops and spills a skincare product that results in a customer slipping, falling and getting injured and damaging your property. Having multiple policies, in this case, could become complicated. However, a single Business Owners policy may make dealing with the situation much easier.
Errors and Omissions
No practicing professional wants to believe they will ever make a mistake. However, accidents can and do happen. When they do, you will be on the hook for compensating your clients. Errors & Omissions Insurance, also known as Professional Liability Insurance, is designed to help businesses cover the brunt of the costs as a result of errors in either providing advice or in providing services. This is especially important for estheticians, who will often do both.
You’ll Need This When…
You first start operating your business. Just as it is possible for an employee to get injured even on the first day, it is possible to make an error, or omission, on the first day.
If you supply a client with a skin care product but forget to mention the importance of applying the product within a particular routine, the client may experience an adverse reaction. You or your business may be held responsible for this omission, particularly if the product’s label was not designed to include the routine you would have recommended.
How much does insurance cost?
Insurance costs will vary widely, depending on how you run your business. All estheticians should consider getting a quote to get a better understanding of the real cost of purchasing needed insurance policies.
What type of insurance does this industry need?
- This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.
- This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to a mistake or error made in a professional capacity. Your business may have contracts with clients or partners that require Professional Liability coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, Professional Liability coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
- This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.
- Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.
- Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits. This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.