One of the first things you should do as a new massage practitioner is purchase liability insurance.
Many massage therapists are required — by their state governing board, employer or landlord — to possess liability insurance in order to practice. Whether insurance is required of you or not, it is a form of risk management that ensures you are relieved from the financial responsibility of a potential loss.
Having this coverage could protect your career, because carrying liability insurance will transfer the risk of loss to your insurance provider. You can rest easy knowing that experts will handle any claims.
Accidents are unavoidable in any industry, even the massage field. The average cost of a trip-and-fall accident, including legal fees and medical bills, is $46,297, according to the National Safety Council, a nonprofit that promotes health and safety in the U.S.
Getting coverage can be considered a step not only toward greater financial protection, but also toward increased professionalism. Further, with coronavirus (COVID-19) an ongoing aspect of life now, it’s essential that massage therapists understand how liability insurance might address a claim related to that.
What Am I Really Purchasing?
When you purchase liability insurance, you need to know what kind of protection you’re purchasing and what’s covered under the policy. This can help you better understand the value of investing in liability insurance.
“First and foremost, it is going to cover what is needed to provide assistance to the injured party, such as medical bills,” explained MASSAGE Magazine Insurance Plus Agent on Record Jameson Naismith. Next, he added, there are legal considerations.
“While most claims do not go to court, if they were it is the right and duty of the risk carrier to defend any claim or lawsuit brought within the U.S. seeking restitution from our insureds, which are payable under the terms of our policy, even if the claim and lawsuit are groundless, false or fraudulent,” Naismith explained. “It is unfortunate that in today’s society there are individuals who look for any excuse to sue someone,” he added. “Luckily, some liability policies keep you safe even in such distasteful instances.”
One of the first steps you should take when comparing policies is to determine the financial wherewithal of each policy’s underwriter, according to Ty Stewart, CEO and president of insurance broker Simple Life Insure. Also make sure you’re choosing an underwriter with experience, he added.
Steven P. Mikuzis, a trial lawyer with Mag Mile Law, LLC, who has a focus on insurance coverage and class action litigation, said he always recommends clients work with A-rated carriers, as rated by AM Best.
“The financial strength of a carrier is only one consideration,” he added. “This is not to say that a multi-billion dollar company is better than a smaller carrier. Small carriers usually purchase re-insurance to offset major claims. The key factor is the quality of the coverage contract and is usually best assessed with the advice of your insurance agent or lawyer.”
Stewart agreed that the cost of a policy does not imply quality. “Carriers determine premiums based on what their actuaries determine to be the potential for loss coupled with their own loss experience,” he explained. “Sometimes, a carrier’s own investment experience is included in the analysis.”
To determine the best policy, he said, the customer must read the policy or work with a professional who can explain why one policy is better than another.
Why Do Massage Clients Sue?
The kind of coverage massage therapists get from liability insurance is a good indicator of types of lawsuits practitioners might face. Most massage liability insurance programs include coverage for three kinds of legal claims: general liability claims, professional liability claims and product liability claims.
General liability coverage applies to instances where a client may sue a massage therapist due to an accident that occurred on practice premises, such as tripping on a doormat and ending up with a chipped tooth.
“An example of general liability would be when someone gets hurts, but it’s unrelated to the massage, such as a slip and fall that happens with the client on the premises,” explained MASSAGE Magazine Insurance Plus Agent on Record Jameson Naismith.
Professional liability coverage, also known as malpractice insurance, applies to instances where a client may sue a massage therapist due to damages or injury incurred during the course of a session. Reasons cited in malpractice lawsuits basically boil down to misconduct or lack of ordinary skill.
“In other words, if during the course of a treatment, a massage therapist does something that injures the client, that would fall under malpractice liability,” Naismith said.
Product liability coverage applies to instances where a client may sue a massage therapist due to damage or injury resulting from use of a product, such as a massage lubricant that causes an allergic reaction or a faulty table that crashes to the ground in the middle of a massage.
Massage schools tend to carry their own liability insurance policies, but this does not mean students and instructors at these schools are safe from potential lawsuits. The rule to remember is anyone who practices massage may be liable when sued, so massage students and teachers need protection, too.
“The school will have a policy, but the students and instructors are not necessarily covered by that program,” Naismith said, “so they could be left out in the cold in the case of a lawsuit.”
Most massage students practice within school clinics and out in their community, whereas massage instructors may perform demonstrations, participate in community massage events and also practice on their own outside the school setting. Therefore, the need for liability insurance is present.
Are Coronavirus (COVID-19) Claims Covered?
Infectious diseases are typically, and specifically, excluded from most liability insurance policies, and have been since 2006, according to Mikuzis.
“In 2006, the Insurance Services Office (ISO) — an industry organization with approximately 1,500 domestic insurance carrier members — published recommended policy forms that excluded coverage for claims related to virus and bacteria,” Mikuzis said. “The forms were developed in response to the World Health Organization’s warnings regarding SARS and MERS outbreaks. ISO members, as well as other carriers, adopted these forms — however, not all carriers adopted these specific exclusionary forms.”
Coverage for liability claims is always looked at on a case-by-case basis, Mikuzis added, and “the allegations of a specific claim are reviewed to determine if they fall within coverage as written in the insurance policy.”
Further, there can be confusion around whether or not a peril or event is covered when it is not explicitly excluded. The short answer is, just because your policy doesn’t explicitly exclude something, including COVID-19, does not mean you will be 100% covered for a related claim, said both Stewart and Mikuzis.
Also, even if an insurance carrier says it covers claims related to COVID-19, for example, few lawyers would accept such cases, said Stewart. To prove negligence, he said, a plaintiff must prove proximate cause, meaning they were infected with COVID-19 because of the service they received from the defendant.
“It is very difficult for anyone exposed to COVID -19 to narrow down where, exactly, they were infected,” Stewart said. “Was it public transportation, the restaurant or bar they went to last night, the park they walked in or the massage they received?”
On top of that, unless someone is seriously injured, such cases have little value in most jurisdictions and will also require the expense of expert witnesses, he added, and “significant expense and effort with little chance of payoff is not the recipe for a successful career as a personal injury lawyer.”
What this means for massage therapists is: An insurance company’s assertion that is covers claims related to COVID-19 should not necessarily be the determining factor in purchasing a policy.
How is Shared Aggregate Different from Individual Aggregate?
Many massage liability programs will cover up to $2 million per legal claim, and then there will be a larger dollar amount assigned to cover multiple claims made within a one-year period, referred to as annual aggregate coverage. This is why it’s key that you determine if a policy is shared aggregate or individual aggregate. Both types exist in the massage industry, and they vary greatly from one another.
“Shared aggregates, also known as limits, often look more appealing to the general practitioner because there is a bigger dollar amount displayed and can leave the impression that there is more coverage included, which is not necessarily the case,” Naismith explained. “The aggregate is the limit of how much money can be paid out on an annual basis regardless of how many claims are filed.”
So, how do shared limits vs. individual limits differ? Let’s say Company A has a shared aggregate of $10 million and Company B has an individual aggregate of $3 million. Whenever someone buys a policy from Company A, they aren’t getting their own limit of $10 million but are sharing that limit with everyone else who bought a policy from Company A. Throughout the year, other policy holders are filing claims and tapping into that $10 million limit. If you are filing a claim at the end of the year, there is a possibility that the $10 million will be gone due to those other claims, and Company A won’t have any money left to pay your claim.
With Company B, when someone buys a policy only the claims they file can tap into the $3 million limit. It doesn’t matter how many incidents occur with the other policy holders, that $3 million is set aside for you and you alone. As you can see, an individual limit is the safer bet.
How is Occurrence Form Different from Claims Made?
Next, find out if your policy is occurrence form or claims made. “An occurrence form policy is certainly the preferred form of coverage for professional and general liability, and for good reason,” Naismith said. “With a claims made policy, when your coverage expires, so does your ability to file claims.”
People are still able to file suit with you long after an incident occurs, so why wouldn’t your insurance policy mirror that?
“Some insurance providers only offer occurrence form policies, meaning that the company will continue to honor claims filed after your coverage has expired, as long as the incident occurred during your policy period, giving you peace of mind even after you stop practicing,” Naismith said.
In addition to understanding the type of coverage a policy offers, it’s also important to find out exactly what is covered. It’s vital that you choose an insurance policy that will grow with you — so that if you add modalities to your practice you will have continued coverage. Look for a policy that covers additional services like yoga, massage and esthetician services all at once to save money if you expand your offerings.
What Else Might be Covered?
Several massage liability insurance programs offer protection against client legal claims, and also offer added coverage for other issues massage therapists may face, such as lost or stolen property, rental damage and identity theft.
“One type of claim we see a lot of is property coverage,” Naismith said. “If some property used in massage practice — a massage table or chair, or a laptop or cell phone used in the context of the business — gets stolen, there’s coverage for that.”
Coverage for damage to rental premises is another form of protection that may be included with liability insurance. For example, if a massage therapist is burning a candle in a rented session room and that candle gets knocked over and starts a fire, damage to the rental premises would be covered.
The identity theft protection offered by certain insurance programs is not related to the practice of massage, but is provided to reimburse massage therapists for expenses associated with cleaning up their credit if an identity theft occurs.
Additionally, don’t overlook the benefits and discounts that are offered along with many insurance policies. Some policies come with so many discounts and free add-ons, the policy practically pays for itself. These might include free continuing education; health insurance; scheduling software; discounts on products, car rentals, shipping costs and hotel stays; personal protective equipment and sanitation products; and business coaching.
What if I Don’t Have Insurance?
Any legal claim from a client is tough to imagine, whether it be for an accident that took place on a massage practice’s premises or because of some kind of harm done during the massage or due to a product used in the session room. However, even though these claims appear to be fairly few, they can and do occur. Taking a gamble that no client will ever sue, the practitioner who chooses to forgo liability insurance faces great risk.
“Massage therapists are leaving themselves open to significant financial risk if they don’t insure,” Naismith said. “If they were to get sued, and there was a judgment against them, it could financially ruin their practice and also invade their personal finances as well.”
Besides financial losses that can occur when an uninsured massage therapist gets sued, another risk of skipping liability insurance is what Naismith calls the “aggravation factor.” Without liability insurance, the individual massage therapist is responsible for managing the complicated legal process associated with a lawsuit.
“If I’m sued, and I have insurance, I’m going to report it to the insurance company, and they’re going to take over investigating that claim, so it relieves me of the burden of having to take responsibility for handling that,” Naismith said. “Without insurance, you don’t have the insurance company as a partner to help you through the legal process and to take the financial responsibility of paying the claim if it’s a legitimate claim.”
How Does Liability Insurance Contribute to Credibility?
Another risk massage therapists may face if they choose not to purchase liability insurance is potential for a perceived lack of professionalism in the eyes of prospective clients and employers.
“Being a massage therapist often means running a small business — and massage clients want to see proof that their therapist is taking that responsibility seriously,” explained MASSAGE Magazine CEO Nick Doyle. “Having a professional liability policy and being able to prove it demonstrates a level of professionalism and credibility that clients will find reassuring. It means the therapist is prepared and ready to take care of more than just their health in the event that something unplanned happens.”
This public perception is subtler than the financial risk and aggravation factor associated with forgoing insurance, but it remains an important point.
“I think having liability insurance shows a greater sense of credibility, in that the licensed massage therapist has taken the appropriate business steps to protect their practice,” Naismith said, “and to ensure the consumer will be taken care of in the unlikely event of a mishap.”
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