The majority of professional liability lawsuits target attorneys, accountants, and physicians. But, there are a series of so-called “miscellaneous professionals” who also face malpractice exposure: marketing consultants, recruiters, travel agents…and even leg waxing professionals. Many professionals are licensed by the state to practice in their chosen field and the failure to obtain such a license may void any professional malpractice coverage.
A recent decision issued last month, involving the negligence of a beauty salon, highlights the potential liability facing all professionals and imparts important lessons for less often discussed but commonly used professional services. In Lawrence v. Continental Casualty, Inc., (E.D.N.Y August 16, 2013) a New York Federal District Court considered the implications of injuries sustained at the hands of a professional without a license to practice. According to the decision, the plaintiff attended a nail salon for a leg waxing treatment where she sustained severe burns. It was soon determined that the beautician had a license to practice “nail specialty” from the New York State Division of Licensing Services, but did not have a license to perform waxing. As a result, the carrier denied coverage and the plaintiff recovered a $130,000 default judgment against the uninsured salon. Subsequently, the court determined that the carrier was on the hook for the default judgment as a result of a particular New York insurance law.
While this decision sparks interesting coverage considerations, the point for the professional liability community is clear: all professionals must be aware of policy limitations arising due to state licensure requirements. The class of professionals that are licensed vary from state-to-state. Therefore each “professional” has the responsibility to be aware of the rules in each jurisdiction. Professionals operating without a license risk losing coverage, whether you’re an acupuncturist, midwife, tattoo artist or an attorney.