Following our previous insurance column from the Federation of Holistic Therapists (FHT), registrar and compliance manager Julie McFadden explains to pick the best insurance provider for your spa
Accidents and other unexpected events cannot always be avoided, so having an insurance provision is a must. But once you’ve decided the different types of insurance you want, how do you know which provider is the right one for you?
Just picking a random insurance provider and hoping for the best really won’t cut it. Every year, we hear stories of people who have taken out a policy, then made a claim, only to find that the specific parameters of their claim are not covered – leaving them with a bitter taste and a hefty bill.
Unfortunately, exclusions are common practice with insurance and they are a great way to help keep your premiums down, until the moment you need cover for exactly what is excluded. So how can you avoid these nasty surprises and ensure you’re actually covered for what you think you are? It isn’t easy, particularly if you are not an expert on insurance, but it isn’t impossible either.
Choosing an insurer
There are three main options when it comes to obtaining insurance: a mainstream insurer, a specialist broker and a professional association.
A mainstream insurer: the same businesses that you would perhaps buy your car or home insurance through, can offer off-the-shelf insurance policies for areas such as employers’ liability cover, which can then be adapted slightly to suit your business needs. A pro of taking this route is that it can be cheaper. However, bear in mind that the provider will have little specialist knowledge of the wellbeing and beauty industries – which can leave you open to exclusions or technicalities when it comes time to claim.
A specialist broker: will liaise between you and an underwriter – who may be a mainstream insurer – taking advantage of the off-the-shelf policies and tailoring them to better meet the needs of the industry. The benefit of this route is that it helps guarantee a policy to suit the needs of your business. The downside is that costs usually increase significantly, due to commissions and brokerage fees.
Professional associations: like the FHT take a different approach. Establishing what is called a group scheme with an insurer whose policies are perfectly tailored to the wellness and beauty industries, they spread the risk of claims across the members, lowering the individual premiums. By spreading the risk, they are able to offer fixed prices for insurance that exactly match the needs of the industry and have been designed with advice from experts.
This not only ensures that you are protected, but also that it's the right type of cover. In a few cases, insurance may be marginally more expensive, but this is not a frequent occurrence. The added advantage of obtaining your cover through a professional association is that they offer membership benefits to help you run your business, alongside the insurance that protects it. These features include discounts with suppliers and training and support.
Understanding the cover
Once you’ve decided what type of insurance cover you need and where you want to get it from, you need to make sure it’s as comprehensive as you need it to be. The best thing to do is to ask your chosen insurance provider.
Sit down and consider your business, such as: what do your therapists offer and what are they qualified for; do you want to treat a specific type of clients, for example pregnant women; can you afford to pay legal fees in the event of a court case; do you have a plan to keep the business going if you were off work for six weeks?
Think about the things that apply to your business and what would happen in a worst-case scenario, and ensure you talk to the insurance provider about this. Also ask the insurance provider what is excluded, before you buy the insurance. They should be able to tell you about any exclusions and, once they do, make sure you’re clear on their explanation and work out if it will be a problem for your business.
Once you’ve purchased the insurance, you’ll normally have 14 days to change your mind - insurers are required to allow you this time when it comes to personal policies, and recommended to for business ones. So read the insurance policy carefully and check the small print, to avoid getting caught out when it comes to making a claim. It’s also worth taking the time to work out what other benefits your provider offers and how valuable they could be to your business - you may well be surprised.
Julie McFadden is registrar and compliance manager for the Federation of Holistic Therapists (FHT). The FHT is a not-for-profit membership organisation for complementary, sports and holistic beauty therapists in the UK and Ireland. The organisation works to protect the interests of therapists and provides a range of services, including insurance cover.