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Supreme Court Upholds the Affordable Care Act: Steptoe & Johnson Analysis

Friday, June 29, 2012

The number of medical spas in the United States has grown by 500 percent since 2005. Simultaneously, the number of gray areas regarding professional liability for medical spas has also exploded. Unfortunately, medical spa owners, their staff and medical directors are not always aware of how to ensure they have appropriate insurance should a claim arise.

Medical Spas Owned by Non-Physicians

Placing liability insurance for non-physician-owned spas can be especially tricky, as a basic professional liability policy may not be sufficient. In this case, typically all procedures and clinicians must be individually listed on the policy. Any procedures or clinicians not listed may cause a gap in coverage. Furthermore, any new procedures or staff members added during the policy period must be endorsed onto the policy.

Medical Directors

Although physicians are required to have their own professional liability policies to practice medicine, their primary policy will not cover them while acting as a medical director at a non-owned business. If a physician chooses to represent a medical spa as their medical director, it is the responsibility of the med-spa owner to provide coverage for that medical director. Upon request, this coverage can typically be included on the professional liability policy protecting the spa and other staff members.

Scope of Physician Specialty

When acquiring coverage for a physician-owned medical spa, the physician’s medical specialty is taken into consideration. Typically, there is minimal concern with respect to dermatologists or plastic surgeons, as their day-to-day procedures mirror those being preformed within the medical spa. Given the similarities of procedures in both areas, the physician’s professional liability policy will often extend coverage to the medical spa. However, in specialties such as obstetrics and gynecology, emergency room and others where cosmetic procedures are not a primary focus, the physician’s professional liability insurance does not always apply. Always check with your insurance carrier for details.

Staff Members

Coverage for staff members is dictated by employment status. Staff members who are employees or involved in an employment contract are typically covered by the primary physician’s policy. Independent contractors are not afforded such coverage and must secure a separate policy.
Medical spas are one of the fastest growing segments within the healthcare industry, and they have the potential to be high-income business ventures. However, operating without proper professional liability insurance can lead to severe consequences, including bankruptcy. It is essential for all parties involved to ensure they have appropriate coverage in place to limit these risks.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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