Monday 5 November 2018

The True Cost of Insurance for an Esthetician

The True Cost of Insurance for an Esthetician

According to the Bureau of Labor Statistics, the job market for estheticians by 2026 is expected to grow by as much as 14%. Right now, is a great time for those who have a serious interest in the health and beauty industry to look into starting their own business. An esthetician has the important task of helping their clients feel healthy and beautiful daily. Their ability to change people’s self-perception can be rewarding. There are, however, steps to take to fulfill this dream.

First, you need to attend a course for estheticians, then after you have passed your exams and become licensed, your next move is to find a place where you can work. This can be best accomplished within an existing salon, but that is not to say after you have gained some experience you can’t start your own business. Once you have decided to start your own business there are things to consider even before you accept your first appointment, with one of these being purchasing a professional liability policy for estheticians.

A professional liability insurance policy can help protect you should you make an unfortunate mistake, or your client is unhappy with a job you did. Sometimes these incidents can result in a lawsuit, costing you a lot of money to defend yourself. Professional liability insurance is designed to protect you should you face a disgruntled customer in a court of law. Even an esthetician who has been working for years needs to consider liability insurance. The cost of insurance must be weighed against the cost of not having it.

How Expensive is Professional Liability Insurance?

The upfront answer is “it depends.” Typically, a policy for an esthetician in a salon starts at around $400 annually, but the premium can fluctuate for several reasons. There are no two policies alike. Your insurance company will look at the type of policy you are considering as well as the level of coverage you are looking for.

Cost Determining Factors

Several different factors come into play when determining the cost of insurance coverage. Some factors might include:

·         Base rates of the carrier: A baseline rate that the company starts with before any surcharges or discounts.

·         Kinds of treatments: The riskier treatments in the esthetician field incur higher costs during lawsuits or lawsuits of a greater frequency will lead to higher premiums. A medical esthetician will typically have higher premiums than a salon esthetician.

·         Experience: Your experience as an esthetician plays a role in the likelihood of being sued. Many estheticians eventually deal with a lawsuit. The less experience someone has, the greater the likelihood of making a mistake. Your insurance premiums will most likely be higher when you first start working in the field. You can expect the premiums to decrease as you gain experience and get industry-recognized certification.

·         Policy limits: The policy limit will affect the premiums as well. The higher your coverage limits, the higher your premiums.

·         Deductibles:Your deductible is how much of the claim you agree to pay. The higher the deductible your policy has, the lower the premium that you will pay.

·         Coverage: If you have multiple estheticians insured under one policy, the greater the risk for the insurer, meaning the higher the premium. If you are a salon owner, you will pay more for your insurance coverage.

Can I Save Money on My Premiums?

A professional liability policy can start with a limit of $500,000 and can go all the way up to $2 million or more. A small operation would have a deductible of $1,000 on a claim.
When it comes to your premiums for insurance coverage, there are two factors that you can use to adjust your premiums:
·         Lower the limits of coverage, or
·         Increase your deductible to reduce premium costs.
Be sure to obtain industry-recognized certifications to be eligible for professional discounts if offered by your insurer.

Why do estheticians need professional Liability Insurance?

You might be asking if the additional expense is worth it or if you should purchase your own coverage if the salon where you work already has insurance. You might even think you are good at your job and you take great care when serving your clients, so your risks of being sued are slim.Let’s take a closer look at some of the reasons why professional liability insurance is essential for estheticians.

I know how to do my job, so would I still be sued?

You hold someone’s beauty and health in your hands as an esthetician. Remember, the beauty industry is a very litigious field, and even the world’s best esthetician can make mistakes. After all, we are all human and it could be the result of human error, or it could be because of malfunctioning equipment. The incident might even be the client’s fault because the client fails to disclose skin conditions or allergies.

What are some of an esthetician’s common exposures?

There are many reasons an esthetician could be sued. Some examples are burns from waxing, chemical peel treatments causing burns, allergic reactions, or laser burns.

How does personal insurance differ from spa insurance?

It is a common misconception that the spa’s policy covers estheticians who work at the spa as individuals, but you should understand exactly what coverage you have through the salon policy.
Side work – The spa’s policy doesn’t cover any work that is not done under your role at the spa. The carriers must include this exclusion to protect themselves from claims that premiums weren’t paid for. This means taking on a client in your spare time isn’t covered by your employer’s policy.
Individual coverage – If you are specifically named in a lawsuit, even for a treatment at the spa, there is no guarantee you will be covered. Some professional liability policies only cover the spa. If you are sued as an individual, the policy would just cover the cost of settling and defending the entity, so you would have to pay for your own legal defense and your individual part of the settlement.

No Clear Cut Answer

There is no clear-cut answer as to how much it will cost to get liability coverage for estheticians, as there are too many variables. Regardless of what you paid for your insurance premiums, it is much more expensive not to have the coverage because if you are sued, you might find yourself paying out 100 times what your annual premium would be for coverage. 

In conclusion, professional liability insurance is a critical investment for estheticians, offering protection against potential lawsuits and unforeseen incidents. While the cost of insurance may vary depending on factors such as coverage limits, deductibles, and types of treatments offered, the benefits of having insurance far outweigh the expenses.

Estheticians operate in a litigious field where even the smallest mistake or unforeseen circumstance could lead to legal action. By obtaining comprehensive liability coverage, estheticians can safeguard their financial stability and reputation, ensuring peace of mind as they focus on providing quality service to their clients.

It's important for estheticians to understand the necessity of individual coverage, especially if they engage in side work or are named in a lawsuit. Relying solely on the spa's insurance policy may leave them vulnerable to gaps in coverage and potential financial liabilities.

While the cost of insurance premiums may seem like an additional expense, the potential consequences of not having coverage far outweigh the initial investment. Ultimately, professional liability insurance offers estheticians the protection and security they need to thrive in their profession while mitigating risks associated with their line of work.

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