Insurance is crucial for your business, protecting you from issues such as lawsuits, false claims, accidents and fire damage. So what kind of insurance do you need and why? Generally speaking, insurance falls into two categories; the ones you must have and the ones you can opt to have.
While there is insurance cover you are legally required to have, it is in many cases a commercial choice, made based on your business, your risk assessment and what you potentially stand to lose by not having it. Some of the different types of insurance available for your business are:
The legal one
If you are running a business and employing staff, then you absolutely must have employers’ liability insurance; it’s a legal requirement wherever an employer-employee relationship exists. Don’t be fooled into thinking that renting space to self-employed therapists will get you off the hook either. This is a common misconception, but even if your business does not employ therapists directly, only renting out space to them, you still require employers’ liability cover.
The well known one
Arguably the best-known insurance product available to therapists is medical malpractice. Providing cover for accidental injury to a client in the process of a treatment, medical malpractice is a must to help cover compensation costs and in many cases also legal fees. It can either be purchased by you as a business owner, to cover all therapists working in your spa, or it can be purchased by the therapists for themselves.
If the policy is purchased personally by the therapist then you, as the business owner, will need to ensure that it includes a principals clause. If a therapist carries out a treatment on a client in your spa, on your behalf, and injures the client in the process, any compensation claim made by the client will most likely be bought against your spa, rather than the individual. However, if there is a principals clause in the therapist’s insurance, the claim will ultimately be paid by the therapist’s insurance.
Good medical malpractice cover will also come with public liability and product liability insurance. Alternatively these can be purchased separately. Public liability covers you if a client injures him or herself or if their belongings are damaged on your premises. Product liability covers you if a client is physically harmed by products used or sold in your spa.
Insurances for tangible things
Buildings insurance is a must if you own your premises. It covers the building itself, as well as the internal fixtures and fittings, and protects you against unexpected events like burst pipes. Depending on your rental contract, you may still need buildings insurance if you rent, to cover accidental damage to fixtures and fittings.
Stock and equipment cover will protect you in cases of theft and accidental damage, reimbursing you for some or all of the costs associated with replacing the stock. This type of insurance will cover anything that happens on your premises, and you can also opt for a sublimit to protect a portion of your stock outside the spa or while in transit.
The lesser-known insurance
Protecting and insuring your income, business interruption insurance can be easily added to your insurance policy, covering a loss of income as a result of an insurable event. For example, if your spa is flooded as a result of a burst water main in the road outside, forcing you to close for a month for repairs, the business interruption insurance will pay out on loss of income during this period.
You hope no employee will be dishonest while in your employment, but there are no guarantees. Employee dishonesty cover is included in some policies, like the one the Federation of Holistic Therapists offers, but can otherwise be bolted on to your policy as an added extra. It means that if you suffer a loss due to a dishonest act by an employee, the policy will indemnify you against direct financial losses.
Personal accident cover is an insurance that is often ignored, because people think “it will never happen to me”. However, it can offer helpful protection for you and your loved ones in the event you cannot work in the short or long term.
The insurance covers loss of income, paying out a lump sum should you become permanently disabled and unable to work, or pass away. A comprehensive policy will also cover temporary total disability, which pays a weekly amount should you become temporarily disabled and unable to work, due for example to a broken wrist.
Insurance is a tricky subject and it’s sometimes difficult to understand which product or cover is needed. There’s also the question of whether the benefits of insuring against something outweigh the costs of the insurance.
However, you can’t go back and insure yourself if the worst does happen and you don’t have a policy. Be really clear on the type of policies that are available and which ones will benefit your personal circumstances most, and don’t forget to also ask the insurance provider what the policy excludes.
FHT works to protect the interests of therapists and provides a range of services, including insurance cover. Find out more at www.fht.org.uk/insurance