A client owns a full-spectrum infrared sauna and float therapy studio. The agent submitted an application for an business owners policy to an admitted carrier for the property and general liability, and submitted an application for the professional liability to a broker.

Initially, the agent received terms from a professional liability carrier, but then received an email from the underwriter that the carrier pulled their terms as they feel the risk falls under a general liability exposure. Per the underwriter, saunas, steam rooms, salt caves, float tanks, and similar risks are operations hazards—meaning they are general liability exposures and do not have professional liability exposure.

Q: Does the infrared sauna and float therapy studio have a professional liability exposure?

Response 1: There are programs that provide the general liability and professional liability coverage in the same policy, which would be the best option for your client. It is sometimes difficult to determine what is a general versus professional liability risk for these types of business—and whether a professional service is rendered or not. That would be determined by the lawyers and the courts should an injury occur. Find a program that combines the coverages.

Response 2: I am not familiar with the operations and services provided by a full-spectrum infrared sauna and float therapy studio. Whether there is a professional exposure depends on several variables, including whether hands-on procedures are undertaken, whether practitioners are specially trained and credentialed, and whether licensing is required.

Given what the underwriter said, I would say the exposures have been examined and determined to be of an operational rather than a professional nature.

Response 3: This account is a specialty-based excess & surplus only account. There may be a “standard" carrier but that is very speculative. The underwriter for this BOP submission was correct to reject. Put yourself on the other side of this risk and you will understand in a better fashion.

Response 4: I recommend a detailed study of the professional liability versus commercial general liability forms. They are entirely different and serve entirely different needs. 

You need a thorough understanding of the legal exposures of your client, a topic that requires the services of an attorney. And once you understand the exposures and the available policies, you need the underwriter to confirm that the exposures that need to be covered are, in fact, covered.

Response 5: Since there is no definition that is universal among carriers for "professional," it is necessary to have clarity from the underwriters before you place the account. 

You can try another professional liability carrier or, better yet, see if the BOP carrier will write the professional coverage. That is always the best way to do it to ensure coverage. 

If you cannot find a way to put it all with one carrier, then be sure the BOP carrier agrees with what your professional carrier is telling you. And, of course, document carefully.

Response 6: Make sure the general liability carrier acknowledges the risk in writing and agrees to cover the exposure. Preferably, include the descriptive language in the description of operations on the policy. 

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.