How To Legally Protect Your Business
Do you know how to legally protect your business? If you're offering any type of beauty or cosmetic services you need to obtain the proper insurance and religiously have every client sign a consent form.
There are a variety of coverage options that vary based on the type of service you offer and the environment you work in. In addition, you may need a few different consent forms uniquely tailored to specific services that you provide.
Sound like a daunting task? Well it can be if you're unaware of the basic guidelines to obtain insurance and what the main purpose of consent forms are. Take a deep breath, this post will clearly break down the basics so that you can simplify your administrative responsibilities. Trust me, the legal and admin stuff is not my forte either, but once you educate your self it's really quite simple.
In this post, I'll explain:
- Basic insurance options
- Break down of what each insurance plan covers
- The purpose of consent forms
- How to decide what verbiage should be included in consent forms
Lets dig right in.
Did you know that regardless if you're providing beauty or cosmetic services out of your home, private studio, booth rental or salon, you can be legally covered against client claims of bodily injury or malpractice? It's one of the most commonly unaware topics I discussed SheLuvsLashes Academy. Not even 1 out of 50 students has been able to accurately define the difference between general and professional liability.
INSURANCE, WHY DO WE NEED IT?
Third party legal claims against a business can be financially devastating and destructive to the business reputation. Many claims will be frivolous, others valid yet all need to be addressed. The purpose of having insurance is to be prepared and protect you, your clients, your business, physical assets, and employees. Now each carrier's package differ in how they categorize specific coverage, exclusions, expenses and cost. i.e. Some carries may only offer combined general and professional liability, while others may offer them separately. Plan components also vary by state, so it's best to do a quick coverage comparison online for each carrier or (what I prefer) call and speak with a representative for clarification.
BASIC INSURANCE OPTIONS
- General Liability: This policy covers third party claims for bodily and property damage. The focus here is on lawsuits from third parties that claim bodily, personal or property damage from contact with your business and/or it's employee(s). General liability policies will cover the legal fees associated with your legal defense, settlements, and property damages.
- Professional Liability aka E & O (errors and omissions): This policy covers both general liability and negligence that pertain to mistakes performed from professional services. Each industry has their own code of conduct to measure if the service meets industry standard. In many cases these types of interpretations are left up to the courts judgement. The rates for E & O coverage will increase based on the risk ratio for specific services. i.e. your premium may increase for someone offering facials or microblading vs lash extensions. Simply due to the nature of products, chemicals and application procedure. Professional liability covers lawyers fees, court costs, judgements or settlements.
- Commercial Property Insurance: Protects your company's physical assets from the unexpected like fires, storms, explosions, theft and vandalism. Please keep in mind most policies don't include floods and earthquakes. However they may offer the option to include those events at a up charge. Commercial property insurance can be obtained whether you work out of your home, own or lease the building.
All of the above are the standard insurance options for businesses. Most insurance carriers provide questionnaires to help narrow down the appropriate coverage plan that protect your service(s) and environment you work in.
Below are some well known carriers for the beauty industry:
Insured Body Work
Beauty Insurance Plus
THE PURPOSE OF CONSENT FORMS
Have you heard the phrase "information is money"? Consent forms allow businesses to collect client information that benefit both the company and client. For instance, the data can be used for company marketing and advertisement to offer client loyalty rewards, birthday discounts and so on. It's imperative companies establish privacy policies to uphold client confidentiality. The rule of thumb is to provide clients an opt in/out option before using their information for marketing communication.
Beyond marketing, consent forms are vital from a legal stand point. They serve to disclose client history ranging from medical, prior services, allergies and more. It's best practice to have more than a "one size fits all" consent form. Many beauty professionals offer an array of services and should carry specific forms that cater to each service offered. A salon may offer facials, waxing and lash extensions. Do you think those services have different contraindications? Absolutely! They also individually possess distinctive procedures, chemicals and code of conduct.
Here's a check list to consider when creating your consent forms:
- Client Information: full name, email, number, DOB, address (optional)
- Client Signature: initials can be included for each bullet point or section
- Service Outline/Description: include procedure processes, associated risks, chemical/modalities/products used etc.
- Set Client Expectation: i.e. physical requirements to obtain service, disclosure of any allergies, medical restrictions that could impact the service or it's outcome
- Client Opt In/Out: provide an opportunity for clients to authorize the use their personal information and/or to obtain images (before and after) for client records, marketing and advertisement
- Legal Verbiage: the verbiage structure is critical to prevent misinterpretation and should verify that the client fully understands and agrees to what they're signing. i.e. ("I fully understand what I have read", "I am of sound mind and capable of executing this form and wish to receive services from "company name".)
As a kind reminder, many services beauty professionals render require a cosmetology, barbering, esthetician or nail license from the state's Board of Barbering and Cosmetology. Failure to obtain the appropriate licenses automatically voids any consent form in a court of law. In addition, an individual or business won't qualify to obtain any type of insurance without the proper license. Please do your research and strategically invest in your education and professional goals.
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