About General Liability Insurance
All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).
Some of the risks CGL insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A MASSAGE THERAPIST
Example 1: Over multiple sessions, one of your masseuses fails to properly apply a lower back rubbing technique to her elderly male client. This actually worsens the back pain, a condition for which her client must seek recurring medical attention. The client sues your business for his ongoing medical payments and hospital bills. General liability insurance could probably help to cover medical expenses owed or any settlement reached.
Example 2: A female client claims that her male masseuse was inappropriate and unprofessional during their session. She reports that his conduct has led to significant mental anguish that has affected her work and hurt her family. If found liable, your business would probably be covered by general liability insurance for anything the court ordered you to pay or any settlement reached.
Example 3: A client is allergic to your standard rubbing lotion. He suffers a severe rash and has difficulty breathing. An ambulance arrives in time to help, but the client brings your massage business to court. If liable, your company would probably be covered by general liability insurance for a settlement or court estimations of damage incurred.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
COST OF GENERAL LIABILITY INSURANCE
The average massage therapist in America spends between $350-$750 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
OTHER TYPES OF COVERAGE MASSAGE THERAPISTS NEED
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all massage therapists should obtain:
Commercial Property Insurance
This policy is a must-have for the vast majority of businesses, particularly those that rely on either inventory, equipment, or owned real estate to function. Disasters can strike rapidly, leaving shocked businesses to improvise a recovery process particular to the nature of the destruction.
Commercial property insurance is part of a plan businesses can put in place for disaster recovery scenarios. Damage from fires and violent weather are examples of what this policy can cover, saving your company huge amounts when it suffers serious losses. Don’t leave your business vulnerable to the loss of its owned offices, tables, office computer equipment, and other vital commercial property.
Professional Liability Insurance
Massage therapy businesses provide a service that clientele depend on for improved health, comfort, and even professional performance. If clients come out of sessions with no relief, or with exacerbated bodily discomfort, your offices could be taken to court for a return of its service fees. The failure to perform over time may leave your business vulnerable to frustrated customers who have invested their time and money in what they ultimately feel has been a waste. Keep your massage therapy business covered in the event that it is found liable for a failure to provide services as promised.
TYPES OF COVERAGE SOME MASSAGE THERAPISTS MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your massage therapist practice may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Workers' Compensation Insurance
The bigger your therapy practice, the more help you will probably need. If your business intends to hire part-time or full-time employees, it is a legal necessity to provide employees with workers’ compensation insurance. This policy keeps your workers covered in the event that workplace accidents cause injury or death.
ADDITIONAL STEPS TO PROTECT YOUR BUSINESS
Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.
With this in mind, here are three things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
- Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
FREQUENTLY ASKED QUESTIONS
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.