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Medical spa boom reveals new lines of risk - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Medical spa boom reveals new lines of risk by Claire Wilkinson Agents and Brokers , Current Issue , Risk Management Arthur J. Gallagher & Co. Mar 1, 2026 Medical spas are expanding rapidly amid strong demand for treatments to smooth wrinkles, refresh skin and tone bodies, making robust risk management essential as liability risks rise. Patchy regulatory oversight, inadequate physician supervision and high client expectations make medical spas complex health care liability risks because they blur the lines between medical procedures and cosmetic services, experts say. Common claims include laser burns, scarring, and complications after a procedure. Medical spas offering weight-loss medications also have come under increased scrutiny. In January, Alabama Attorney General Steve Marshall announced a settlement with a medical spa that allegedly administered weight-loss drugs not approved by the U.S. Food and Drug Administration. Because medical spas are not traditional medical offices, treatments are sometimes approached with a “cavalier attitude,” said Bill Bower, Chicago-based health care vertical leader for Gallagher Bassett, the claims management unit of Arthur J. Gallagher & Co. Laser treatments and needle-based therapies pose significant risks and require appropriate care, Mr. Bower said. The standard of care expected in medical offices still applies, he said. Liability concerns include allegations of improper technique, failure to recognize or treat complications, and inadequate consent, he said. Regulations vary widely by state, and professional supervision and training are key, he said. Some states require licensed physicians to own the business, while in others, non-physicians can be owners but must appoint a medical director. States also differ on which professionals can perform specific procedures. “Ownership of medical spas varies widely. It could be a physician who owns a medical spa, but it could be a nurse practitioner, it could be a corporate entity. All of that leads to inconsistent governance, supervision and accountability,” said Julie Ritzman, senior vice president of patient safety and risk management at The Doctors Co. Less than half of med spas are owned by a physician, according to 2022 American Med Spa Association data. TDC insures various medical professionals, including plastic surgeons and dermatologists, and covers medical spas owned by their policyholders if they meet underwriting criteria, Ms. Ritzman said. Underwriters ask detailed questions on ownership, staff credentials, supervision structure and compliance with state laws, she said. A spa attached to a medical office can be supervised more closely because a physician is nearby if something happens, Ms. Ritzman said. In January, the American Academy of Dermatology and the New York State Society of Dermatology and Dermatologic Surgery issued a joint statement urging state lawmakers to require medical spas to clearly disclose if they are not licensed to perform medical procedures. The statement followed an investigation by the New York City Council into improperly licensed medical spas in the city. The number of med spas in the U.S. increased to 10,488 in 2023, up 41% from 2021, according to a 2024 report from the American Med Spa Association. “You can find a med spa on every corner nowadays,” said Lily Chetosky, a Chicago-based professional liability broker at Burns & Wilcox. They run the gamut from entry-level mom-and-pop Botox clinics to those offering Brazilian butt lift and breast-augmentation surgeries, she said. Because demand is so high, med spas are opening rapidly, often without adequate oversight, which has led to malpractice issues because of poor staff training, insufficient protocols and unlicensed providers, Ms. Chetosky said. Medical spas are a hybrid between primary care and aesthetic needs, said Bobbie Williams, Dallas-based vice president and health care practice leader at Novatae Risk Group, the wholesale unit of World Insurance Associates. While primary care and chiropractic clinics have fairly consistent risk profiles, “med spas are a different animal because these providers will look to start to do new treatments and procedures throughout the year,” Ms. Williams said. Regular communication between providers and brokers is critical, and new services should be reported so coverage can be reevaluated, policy language adjusted and additional premium charged, if needed, she said. A cultural shift toward wellness, weight loss and anti-aging has driven the growth of med spas, said Tracy Bautista, a Dallas-based broker at Brown & Riding. The biggest challenge is making sure the treatments, drugs and devices they use are approved by the FDA for human use, Ms. Bautista said. GLP-1 weight-loss injections and skin treatments like peptides, which may not be FDA-approved, are “a major risk concern,” she said. Malpractice and professional liability coverage varies, with most policies excluding non-FDA-approved procedures, and additional exclusions for stem cells and exosomes are common, she said. “When GLP-1s entered the marketplace, we only had maybe two or three carriers that were interested in providing coverage, and there were very specific (underwriting) guardrails,” Ms. Bautista said. As FDA approvals have expanded, more than 10 insurers are now willing to consider coverage, she said. Insurers are more comfortable with certain services, such as Botox and lasers, but sexual rejuvenation procedures and weight-loss drugs are considered high-risk, Ms. Chetosky said. Med spa owners should ensure that professional liability policies cover new services, she said. Typical limits are $1 million per occurrence and $3 million aggregate, though some insurers offer higher limits, according to brokers. Procedure protocols, patient disclosures key Medical spa owners should develop strict protocols for specific procedures, use detailed informed-consent forms and ensure staff are trained under appropriate medical oversight. Managing patient expectations and obtaining detailed informed consent are critical, said Bill Bower, Chicago-based health care vertical leader for Gallagher Bassett, the claims management unit of Arthur J. Gallagher & Co. “You need to make sure that the patient understands what you’re going to be doing, what the risk and complications are, that there’s no guarantee that it’s going to work and that all of their questions have been answered to their satisfaction,” Mr. Bower said. Spas should be vetted to ensure staff are licensed and trained to provide specific services, said Bobbie Williams, Dallas-based vice president and health care practice leader at Novatae Risk Group, the wholesale unit of World Insurance Associates. “We want to just keep an eye and make sure that people aren’t performing treatments that they should not be or providing care that they should not be because they don’t have the proper licensure,” Ms. Williams said. Errors in procedures are not always the cause of claims, said Julie Ritzman, senior vice president of patient safety and risk management at The Doctors Co. “Sometimes it’s not that they didn’t do the procedure correctly, but perhaps the patient was more susceptible to the level of laser that was being used,” Ms. Ritzman said. If a patient doesn’t disclose medication history, that can also lead to complications, she said. 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