The United States offers the most promising environment for spa businesses and has a market share of $15.1 billion out of the $68 billion revenue of spas all over the world. However, the pandemic hit spas in the United States hard and the Global Wellness Institute estimated a 38.6% reduction in the industry’s market growth in 2020.
A reduction in market growth means challenges are up ahead. And sometimes, getting insured can solve some challenges spas face. Today, let’s talk about spa business insurance policies, their cost, and more.
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Carriers have insurance policies that offer protection from exposures unique to spa businesses. Tailored insurance for spas commonly features the following:
Spa liability insurance
Business interruption insurance
Commercial property insurance
Workers' compensation insurance
Spa liability insurance is a collective term for insurance policies that protect your spa business against legal and financial liability for the injuries, property damage, or economic loss of third parties. Liability policies commonly available are:
General liability insurance
Professional liability insurance
Public liability insurance
Personal injury or property damage lawsuits a client, delivery man, or visitor files are costly exposures. Slip and fall accidents are the most common mechanism for spa-related personal injuries and property damage. The table below outlines the cost of injuries in spa personal injury lawsuits.
| Type of Injury | Settlement Cost |
|---|---|
| Concussion | $45,000 |
| Fracture | $110,000 |
| Dislocation | $59,000 |
General liability insurance for spas is the policy that will take care of personal injuries or property damage clients and other third parties experienced due to your spa's business operations. This insurance provides funds for medical treatment, compensation for pain and suffering, and reimburses the value of a damaged property.
General liability insurance, with its optional coverages added, will provide more protection for businesses. Such optional coverages are:
Advertising injury coverage
Products and completed operations coverage
Rented premises liability coverage
Liability for advertising or reputational harm is a very problematic exposure for your spa business. The cost of wrapping things up without insurance will be hundreds or even millions of dollars. This is why be smart and add advertising injury coverage to general liability insurance. Advertising injury coverage will cover attorney fees, compensatory payments ordered by the court, and other legal costs should a third-party files a claim against your business for:
Slander
Libel
False advertising
Copyright infringement
Your spa’s completed service might have caused personal injuries or property damage to a client. If a past client decides to file a claim, products and completed operations coverage will cover compensatory payments, attorney fees, and other legal costs.
Do you rent a commercial space for your spa’s business operations? Rented premises liability coverage is useful if this is the case. Rented premises liability coverage will pay the landlord on your behalf if the rented commercial space incurs damage due to fire.
Related: General liability insurance for makeup artists
Negligence or mistake is another exposure that spas have to think about. Common injuries that either of the two causes are wax burns, hair loss, abrasion or cuts, chemical burns, and infections. The cost for settling these injuries in a negligence lawsuit is in the table below:
| Types of Injury | Settlement Cost in Negligence Lawsuit |
|---|---|
| Wax Burns | $56,000 |
| Abrasions | $10,000 |
| Cuts | $5,000 |
| Hair loss | $300,000 |
| Chemical burns | $250,000 |
| Infections | $60,000 |
Professional liability insurance will take care of the cost associated with negligence lawsuits. This gives the policyholder $1 million up to $2 million. But note that the language of professional liability insurance also provides coverage for claims filed because of:
Misrepresentation
Violation of good faith and fair dealing
Violation of confidentiality
Other acts considered errors and omissions
Public liability insurance works the same way as general liability insurance. It will take care of personal injury claims and property damage claims against your business. However, compared to general liability insurance, public liability insurance is more limited in its scope as you can’t add optional policies to it. In fact, it’s safe to say that general liability insurance is a comprehensive version of public liability insurance.
A spa has a lot of equipment that can be costly to repair or replace. The table below shows the most common spa equipment and their repair and replacement cost.
| Type of Equipment | Replacement Cost | Repair Cost |
|---|---|---|
| Massage Table | $6,000 | $900 |
| Manicure and pedicure station | $950 | $150 |
| Reclining chair | $1,500 | $200 |
| Scotch hose | $1,200 | $250 |
| Hydrotherapy tub | $8,000 | $1,500 |
| Laser removal machine | $3,621 | $1,340 |
Carriers offer commercial property insurance to spas. Your spa has a commercial building where clients visit, employees provide a service, and equipment or materials are stored. Commercial property insurance functions to cover the building and its contents.
Commercial property insurance will reimburse your losses if your spa burns to the ground or gets destroyed by extreme weather. The amount of reimbursement you’ll get will be equal to the value of the totaled building.
Fire, extreme weather, theft, vandalism, and other covered perils will damage your spa’s building. In this situation, commercial property insurance will give reimbursements equal to the value of damaged building structures.
Commercial property insurance has inclusions that protect business equipment and other valuables inside of your spa’s building. These inclusions are:
Business equipment and tools coverage
Stocks and contents coverage
Fire, extreme weather, theft, vandalism, and other covered perils might result in the loss or damage of equipment such as facial steamers, magnifying lamps, UV tower warmers, sterilization units, hydraulic chairs, electric facial hair remover, hydrotherapy tubs, and others. Business equipment and tools coverage will help by reimbursing the money you spent on these items.
Your spa has other valuable supplies such as creams, lotions, healing stones, aromatherapy candles, essential oils, and perfumes. There are also precious items such as computers, important documents, office furniture and decorations, and more. When these become lost or damaged due to fire,theft, vandalism, and other covered perils, stocks and contents coverage sees to it that you recover your investment.
Upon buying your commercial property insurance, insurance companies will ask whether you want to get it as a replacement cost coverage or actual cash value coverage. So what’s the difference between the two? Take a look at the table below:
Replacement Cost | Actual Cash Value |
|---|---|
| In a replacement cost, the reimbursements you’ll get will be equal to the value of scheduled commercial property not taking depreciation into account. For example, if your commercial building is $1 million, you’ll also receive the same amount when a covered peril happens | In an actual cash value, the reimbursements you’ll get will be equal to the depreciated value of the scheduled property. For example, if your commercial building is $1 million and it has depreciated 5% when it was destroyed, you’ll only receive $500,000 |
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Your spa will close for an indefinite period of time because of an economic crisis, business renovation, or relocation. And so, carriers offer business interruption insurance for spas.
Business interruption insurance will provide money that’s equal or partial to the monthly average revenue of your spa. In practice, you use this insurance policy when the spa temporarily closes. Through business interruption insurance, your spa can pay for their employee wages, employee benefits, loans, mortgages, and other operational costs.
Understand that business interruption insurance doesn’t account for all kinds of business closures. This insurance for spa business excludes closures as a result of floods, earthquakes, the Covid-19 pandemic, and other related events unless stated as covered by the carrier to the contrary.
There are instances where a spa received a sexual harassment lawsuit and ended up paying the victim. Here are some examples:
Massage Heights, a spa operating in multiple locations in the United States, had to pay $3.3 million in a sexual harassment lawsuit
Massage Lux, a spa in Williamsburg, had to pay $100 million after four customers claimed to have experienced sexual assault
Massage Envy, one of the largest spas in the United States, received a $2 million lawsuit from one of its customers.
Liability insurance does not cover sexual harassment ( though some claim that general liability insurance can be useful ).
The one policy that will cover sexual harassment lawsuits from clients is sexual misconduct and molestation liability insurance. The features of sexual misconduct and molestation liability insurance are as follows:
$3,500 minimum premium
$15,000 minimum retention
$250,000 - $5 million policy limit
$250,000 sub-limit for assault and battery associated with sexual harassment
Available to educational institutions, non-profit organizations, religious institutions, transportation providers, healthcare providers, leisure providers
Your employees are constantly experiencing work-related hazards. Such work-related hazards include but are not limited to repetitive motion injuries, slip and falls, and stress. You have to look after your spa’s employees whether they’re full-time or part-time. And for this, workers' compensation insurance can help. When an employee suffers from a work-related injury or disease, workers' compensation insurance will take care of hospitalization, medical treatment/procedure, medication, rehabilitation, and lost income compensation.
The lost income compensation will be equal to two-thirds of the employee's average weekly wage. This is the case in most states. However, in some states, lost income compensation is higher or lower than this.
Additionally, workers' compensation insurance will provide coverage if the employee dies. The insurance will pay for funeral expenses and will give an allowance to the employee's dependents amounting to two-thirds or 67% of the average weekly wage.
Workers' compensation insurance provides legal protection for your business. Most workers comp laws or labor laws prohibit employees from suing employers whose business is covered with workers' compensation insurance.
Day spas are different from spas as they provide non-surgical beauty services. Most focus on facials, massage, pedicure, and other quick treatments. If you’re the owner of one, consider going for a day spa insurance. Here are its features:
General liability insurance with a $1 million-$2 million per occurrence and aggregate limit
$5,000 tools and equipment coverage included in general liability insurance
Professional liability insurance with a $1 million-$3 million per occurrence and aggregate limit
Sexual abuse and molestation coverage included in professional liability insurance
$25,000-$500,000 commercial property insurance
Workers' compensation insurance with a $500,000-$1 million employer’s liability coverage
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The average spa general liability insurance cost is about $46 per month or $552 per year for a $1 million coverage
Spas pay $42.5 a month or $510 a year for $1 million professional liability insurance
The cost of commercial property insurance for spas is $61 a month or $732 a year
Business interruption insurance for spas costs $42 a month or $504 a year
For further reference, we also included in this section the pricing of the insurance companies offering coverage for spas:
| Company | Cost per month | Cost per year | Best for |
|---|---|---|---|
| CoverWallet | $25 | $300 | Online spa business insurance quote comparison |
| Thimble | $30 | $360 | Short-term day spa insurance |
| Next | $35 | $420 | Quick spa business insurance application |
| Hiscox | $39 | $468 | Beauty shop and spas |
| Progressive | $42 | $504 | Mobile spas |
| State Farm | $50 | $600 | Spas, estheticians, cosmetologists, and barbers |
When shopping around for spa insurance coverage, you’ll have to pick the right company to work with. To make that easier for you, we’ll take a look at the best spa insurance companies. Now their pros, cons, and pricing for a $1 million general liability coverage.
To compare spa business insurance quotes online from these carriers as well as other leading spa business insurance companies, be sure to click the 'Get Quotes' button below and complete the form.
| Insuranks rating | 10/10 |
|---|---|
| Best for | Online spa insurance quote comparison |
| Average cost | $25 per month |
| Year Founded | September 2015 and acquired by AON at 2020 |
| CEO | Inaki Beringuer (former) |
| Headquarters | 101 Avenue of the Americas 18th Floor New York, NY 10013 United States |
| Customer Support | (646) 844-9933 |
| AM Best Rating | A ( excellent) |
| BBB Rating | A+ |
| Number of Complaints | 158 |
Best online quote comparison platform for spa business insurance
Customizable policies
Insurance policies for spa starts at $300 annually
Some policies CoverWallet offers for spas come are underwritten by its partners
CoverWallet is the best online quote comparison platform for spa business insurance. With this company, you’ll get your hands on the quotes of all insurance carriers in the United States. CoverWallet also allows the customer to buy insurance policies immediately and manage such policies in the MyCoverWallet app
| Insuranks rating | 6/10 |
|---|---|
| Best for | Mobile spas |
| Average cost | $42 |
| Year Founded | 1937 |
| CEO | Tricia Griffith |
| Headquarters | Mayfield, Ohio, United States |
| Customer Support | 1-800-444-4487 and customer service portal |
| AM Best Rating | A+ ( superior) |
| BBB Rating | D - |
| Number of Complaints | 1,313 |
Features both business and commercial auto coverage
Covers many areas
Willing to work with mobile spas
Ratings are not what you would expect from an AM-Best rated company
Progressive specializes in working with massage spas, mobile spas, health spas, and day spas, making them one of the more versatile insurance companies available. Spa business coverage automatically comes with general liability coverage as well as commercial auto insurance for spa businesses.
| Insuranks rating | 7/10 |
|---|---|
| Best for | Beauty shop and spas |
| Average cost | $39 a month |
| Year Founded | 1901 |
| CEO | Aki Hussain |
| Headquarters | Pembroke Parish, Bermuda |
| Customer Support | 1-866-424-8508 and customer.relations@hiscox.com |
| AM Best Rating | A - excellent |
| BBB Rating | A- |
| Number of Complaints | 12 |
Responds quickly to claims
Two kinds of coverage for spas
Also covers beauty shops
Limited coverage area
Hiscox offers two specific kinds of policies for spas, bundled into their “spa and beauty shop coverage” policies: professional liability coverage and general liability coverage. They allow you to choose between flexible payment options, and they offer extremely quick responses to their claims.
| Insuranks rating | 6/10 |
|---|---|
| Best for | Spas, estheticians, cosmetologists, and barbers |
| Average cost | $50 |
| Year Founded | 1922 |
| CEO | Michael L. Tipsord |
| Headquarters | Bloomington, Illinois, United States |
| Customer Support | 800-782-8332 and customer service portal |
| AM Best Rating | A++ ( superior) |
| BBB Rating | B |
| Number of Complaints | 538 |
24/7 phone and online claims service
Has computer property policy aside from the common policies for spas
Has optional coverages so that the policyholder can customize
Some customers complained that State Farm agents were rude and mocked them for being stupid by not knowing how their policy works
State Farm insures not only spas but also barbers, cosmetologists, and estheticians. The company boasts a very responsive claims process, which it achieves by allowing customers to call different phone lines that cater to auto claims, glass claims, loan approval, and business insurance claims. To ease the minds of the customers, State Farm has an online claims tracker on its website.
| Insuranks rating | 9/10 |
|---|---|
| Best for | Short-term day spa insurance |
| Average cost | $30 |
| Year Founded | 2015 |
| CEO | Jay Bregman |
| Headquarters | New York City |
| Customer Support | hello@verifly.com |
| AM Best Rating | A+ ( excellent) |
| BBB Rating | A+ |
| Number of Complaints | 53 |
Fast insurance application
Thimble has short-term insurance is which is useful for starting spas
Offers the most useful basic insurance policies small spas need
Some customers report that Thimble is a handful when it comes to insurance cancellation
Thimble offers the most basic coverages spas need such as general liability insurance. Its insurance for spa doesn’t include workers comp insurance and commercial property insurance. Nonetheless, the company offers both as separate policies to the customer. The best thing about Thimble is that its insurance is available as a short-term policy which is great for those who don’t need coverage for a long time.
| Insuranks rating | 8/10 |
|---|---|
| Best for | Quick spa insurance application |
| Average cost | $43 |
| Year Founded | 2015 |
| CEO | Guy Goldstein |
| Headquarters | 75 California Ave, Palo Alto, CA 94304, United States |
| Customer Support | 1-855-222-5919 and support@nextinsurance.com |
| AM Best Rating | A- (excellent) |
| BBB Rating | A+ |
| Number of Complaints | 13 |
Insures customers within 5 minutes
No deductible on the general liability insurance for spas
Next offers general liability, professional liability (E&O), commercial auto, workers’ compensation, and commercial property policies for spas
Allows for the bundling of insurance policies to get a minimum 5% discount
Some customers reported that Next sometimes impose excessive rates on startup spas
Next boasts a very fast insurance application process. Its insurance policies are available to most states in the United States. With this company, there’s no need to engage with lengthy calls with agents over the phone. The company uses big data technology to figure out which policies customers absolutely need.
Get all the best quotes from leading providers in a click of a button!
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
It really can't get any better than this... wow
Not all those who wander are lost.
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