Liability by Lesley Scher
Lesley Scher, QPIB, FIBANZ, ANZIIF(SnrAssoc), CIP, is managing director of The Insurance Brokers Ltd, the preferred ARBTh Inc insurance supplier for more than 14 years and developer of the Salon Businesspack for Association members only. Ph: 09 360 4219, email: lesley@tib.co.nzwww.tib.co.nz
In today’s economic climate one of the things that gives a business the edge is professionalism.  New Zealand became one of the least regulated countries after 1984 but this is changing rapidly because of discontent and frustration from the public.
During the last week while talking to beauty therapists and students in the South Island about disaster insurance the subject turned to service.  It was mentioned how important it was that clients realised that not all beauty businesses were able to say they were professional, had an efficient and honest service and had to abide by rules and regulations. 
When I got back to Auckland I had coffee with friends and one of them remarked she had gone for a beauty therapy treatment which had not been successful. It transpired that after research she had chosen the clinic based on the lowest price.
What she hadn’t checked was competency, whether it was a member of an association, and  most importantly, why was the price so low? Of the five of us only one had broken the business check rule. 
This was interesting because all of us belonged to different associations. 
Which leads us to the ARBthNZ Inc. To be a member and have a sign saying you belong to this association means you are following the code of conduct and standard of ethics.
The association represents you and looks after your best interests, and it educates and advises members on issues as diverse as best employment practices to entering the Expo Beauty Awards.  Members of the public ring your association for advice on beauty issues or which clinics are members. Your association is the first port of call for a disgruntled customer and it is the first place a clinic should contact for information on product, education  or staff issues.
Liability is not about spilling wax on a client’s clothing.  That is easily rectified. Public liability is third party insurance for property damage or bodily injury.  Bodily injury in New Zealand is covered by the Accident Compensation Commission.
However, there are extensions to the public liability cover which do not usually apply to therapists.
Liability is about negligence, privacy, errors and omissions, inaccurate use of product, unforeseen incidents involving clients including scarring or burning by treatments, and inappropriate behavior of staff.
Charges can include emotional stress or psychological damage after a beauty treatment but public liability does not cover these issues.  The association realised this and so Statutory Liability and Professional Indemnity were introduced more than 14 years ago.  Statutory Liability will pay for expenses and fines while Professional Indemnity will protect against allegations of negligence, errors and omissions, product incidents, and for any charges brought by any authority. 
Advice can be sought about inappropriate treatment by the Health and Disability Commissioner (even though you are not health professionals), ACC, or a civil action.  Lack of confidentiality by staff can mean an enquiry from the Privacy Commissioner while inaccurate advertising can lead to an enquiry by the Advertising Standards Authority. 
These last two years have seen vexatious and frivolous claims multiply.  The most important thing to remember is you must have the correct insurance in place. Liability insurance is different from other insurances.  As soon as there is a possibility of a claim, usually in a letter from a client, you must inform the insurance company immediately.
The possible claim must be advised during the year you are insured, not after that period, to enable the insurance company to take action early before the situation escalates into either nationwide publicity, defamation or civil action.  The purpose is to financially safeguard you and your business. 
There are four actions to take if you are accused of actions such as negligence or breach of privacy:
1. Advise the insurance company immediately
2. Do not accept liability
3. Do not write or phone the client until you have received advice on how to handle the situation
4. Check you have written notes on treatment or written notes on advice given
There are five steps you can take to avoid alleged charges.
1. Keep clients’ files current and accurate
2. Educate your staff about privacy, and appropriate behaviour
3. Train, train and retrain your staff
4. Write everything down
5. Join the New Zealand Association of Registered Beauty Therapists
It is a short step from a successful, thriving business to one of confusion and pressure when an unexpected event occurs.  Joining your association will safeguard your professionalism and financial future.  

 

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