The health and beauty sector is big business in the United Kingdom. High streets up and down the country have a vast a array of different establishments, including private clinics, spas, hairdressers, beauticians and tattoo studios. There is also a thriving business in home based and mobile services. Beauty based ancillary businesses can also fall into the category, e.g. face painters. The nature of the business exposes this sector to a significant level of risk and insurance plays an important role in managing the risks and enabling business to trade confident in the knowledge that they have financial security against a known range of losses.
What is treatment risk insurance?
An important area of insurance, and one that is very easy to get wrong, is Treatment Risk insurance. Treatment Risk insurance provides protection against claims by third parties alleging injury from the treatment provided. The common misconception is that treatment risks are automatically covered by the Public Liability insurance, but this is not the case.
A standard Public Liability insurance excludes liability arising from professional risks such as advice, design, specification or treatment. When arranging treatment risk insurance, the most important factors to ensure the insurer is aware of are the range of treatments being provided and qualifications and experience of those undertaking the treatments. Treatment Risk insurance will typically state a list of insured treatments, and, as these are the only treatments covered, it is essential that the list is checked to ensure it is adequate. An insurer may consider additional treatments on request, but may want additional premium and/or additional/restrictive terms. Treatment Risk insurance will also either state a minimum requirement for qualifications and experience or supervision of persons undertaking treatments, or may specifically name individuals as being covered for specifically named treatments. Any new treatments undertaken should be referred to the insurer prior to cover being required, as additional information may be required before cover is granted.
Insurers will readily cover ‘standard’ beauty treatments easily and inexpensively as an extension to a Public Liability insurance or as part of a salon/retail package policy along with the cover for the buildings, contents, business interruption etc. Higher risk or intrusive treatments that fall outside of scope of ‘standard’ treatments will require a separate Treatment Risk policy, e.g. cosmetic surgery, botox, teeth whitening, tattoos and body piercing. Treatment Risk insurance may also be called Medical Malpractice insurance, and may provide cover on a ‘claims made’ basis as opposed to the more common ‘claims occurring’ basis of cover. It is important to know when the insurance is on a ‘claims basis’ as this requires cover to be in place when the claim is made irrespective of when the injury occurs subject to the retro active date in the policy.
What is a claims made basis for treatment risks insurance?
The fundamental issue the ‘claims made’ basis causes is that there is no cover for any claims made after a policy is lapsed or cancelled as the policy is not in force when the claim is made, so any previously purchased cover is worthless. It is therefore essential that where a policy is replaced with another insurer, the retroactive date (the policy only covers work undertaken after this date) follows the date on the previous policy and insurers willingly do this. If cover is not required for future work, serious consideration should be given to the purchase of ‘run off’ cover which will cover work prior to inception of the ‘run off’ policy against claims made during the policy period. The cost of first year ‘run off’ cover is likely to be little different to the normal annual premium, but the cost should reduce over time as the likelihood of a claim reduces. The Treatment Risk policy is generally more expensive than the cost treatment cover as an extension to Public Liability insurance or as part of a salon/retail package, and may also contain an excess that is applicable to all claims which may vary dependent upon the treatment.
It pays to take the time to arrange cover carefully to ensure the business is covered correctly so there are no claims repudiated by insurers unexpectedly, and inevitably this may not be the cheapest option. A specialist liability broker will be able to provide yo with any professional advice you may need regarding this vital cover.
Blackfriars specialises in the arrangement of liability insurance and is ideally placed to assist you in providing a arrange of quotations from leading insurers to meet your requirements for both public liability insurance and the treatment risk.