Key Takeaways
- Rapid growth in regenerative and alternative therapies is expanding Healthcare Liability exposures across medspas and healthcare providers.
- Coverage considerations are multifaceted, with many carriers applying exclusions, limitations, and strict underwriting requirements for non-FDA-approved and off-label treatments.
- A complex regulatory environment, driven by both federal and state oversight, impacts how Healthcare Liability risks are evaluated and underwritten
- Many claims stem from insufficient informed consent, patient screening, and marketing practices rather than the procedure itself.
- Aligning Healthcare Liability coverage with services, addressing product-related exposures, and working with an experienced partner like Burns & Wilcox can help reduce coverage gaps.
Regenerative and alternative therapies are rapidly expanding across medspas and traditional healthcare practices, introducing new opportunities—and significant exposures. Treatments such as peptides, NAD+, ketamine, and stem cells are increasingly utilized for wellness, aesthetic enhancement, and off-label therapeutic purposes, often without full Food and Drug Administration (FDA) approval or long-term clinical validation.
As providers broaden their service offerings, the Healthcare Liability Insurance market is evolving to address shifting standards of care, increased regulatory scrutiny, and more complex risk profiles.
Rapid Growth, Increasing Complexity
Demand for regenerative and alternative therapies is accelerating, driven by consumer interest in wellness, anti-aging, and non-traditional treatment options. In response, medspas and healthcare providers are expanding into services that may fall outside conventional treatment protocols or rely on off-label applications.
Carriers are increasingly focused on how coverage should respond to these exposures. For example, many policies include exclusions for non-FDA-approved or experimental treatments. Some carriers provide limited coverage exceptions for certain off-label uses, typically requiring supporting clinical evidence and strict underwriting review.
Regulatory Considerations and Oversight
A key factor contributing to complexity in the regenerative and alternative therapies sector is the layered regulatory environment. Oversight spans both federal and state levels, with each playing a distinct role in how these treatments are approved, delivered, and monitored.
The FDA establishes whether a drug or therapy is approved for specific uses. However, once approved, providers may use treatments on an off-label basis, which is common across many wellness applications. While off-label use is not inherently prohibited, it introduces additional scrutiny from both regulators and underwriters.
At the same time, state authorities regulate how providers practice medicine, including scope of practice, supervision requirements, and how treatments are marketed to patients. These requirements can vary by jurisdiction, particularly with respect to physician involvement and the use of mid-level providers.
This interplay between federal approval and state-level regulation influences how treatments are delivered, evaluated, and ultimately underwritten.
Standard of Care and Provider Considerations
Standards of care for regenerative and alternative therapies are still developing, leading to differences in how treatments are performed and evaluated. Unlike more established medical procedures, these therapies often lack widely accepted clinical guidelines, increasing the importance of provider judgment, documentation, and clinical oversight.
Several factors can impact underwriting and claims outcomes, such as:
- Provider type: Differences between physicians and mid-level providers can influence how care is delivered and evaluated.
- Supervision structure: The level of physician involvement can affect liability exposure.
- Scope of practice: State-specific regulations determine what services providers are permitted to perform.
The treatment setting introduces additional considerations, particularly as service delivery models expand:
- In-clinic procedures: Typically involve direct oversight in more controlled environments.
- Telehealth delivery: May limit in-person evaluation and patient screening.
- Multi-location practices: Can create inconsistencies in supervision and operational oversight.
Underwriting evaluation often centers on who is providing care, how services are delivered, what type of service is being offered, and whether those practices align with regulatory requirements and disclosed operations.
Informed Consent and Patient Risk
Given the emerging nature of many regenerative and alternative therapies, informed consent plays a critical role in managing liability exposure. Patients pursuing these treatments are often influenced by wellness trends and marketing, which emphasizes the importance of clearly outlining the procedures and setting realistic expectations on outcomes prior to treatment.
Many claims arise not from the procedure itself, but from gaps in communication, patient evaluation, and expectation setting. As a result, risk evaluation often extends beyond clinical methods to how providers communicate with patients prior to treatment.
- Disclosure of treatment status: Clearly communicating whether a therapy is off-label, investigational, or not FDA approved.
- Explanation of risks: Addressing both known risks and the potential for unknown outcomes associated with newer therapies.
- Expectation management: Avoiding guarantees of results, particularly for treatments marketed for anti-aging or performance benefits.
- Patient screening: Ensuring appropriate medical evaluation, including review of underlying conditions and coordination with other healthcare providers.
- Marketing and advertising practices: Promotional materials, testimonials, and social media content can create unrealistic expectations or misrepresent outcomes, increasing the likelihood of disputes—even in the absence of a procedural error.
From an underwriting perspective, these factors are often evaluated through review of consent forms, patient intake procedures, and marketing materials.
Claims and Coverage Considerations
As regenerative and alternative therapies gain broader adoption, claims are increasing in both frequency and complexity. Allegations often extend beyond the procedure itself, involving multiple factors that can complicate evaluation and defense.
Common claim scenarios include:
- Administration errors: Improper injection techniques or dosing leading to adverse reactions.
- Adverse outcomes: Unexpected side effects, particularly when underlying conditions were not fully evaluated.
- Misrepresentation or advertising-related claims: Allegations stemming from overstated benefits or unmet expectations.
- Product-related issues: Contaminated, improperly sourced, or defective products contributing to patient injury.
A key challenge in this segment is the intersection of Professional Liability and Product Liability exposures. Claims may involve both how a treatment was administered and the product used, creating uncertainty around how coverage responds.
Coverage considerations may include:
- Exclusions for non-FDA-approved or experimental treatments.
- Limitations related to clinical research or investigational services.
- Sublimits applied to higher-risk services or procedures.
Coverage may also be restricted or unavailable for certain therapies, depending on carrier appetite and the specific risk profile. As a result, aligning coverage with the full scope of services provided—and understanding how policy terms, exclusions, and limits apply in the event of a claim—is critical.
Tips for Brokers & Agents
Brokers and agents play a vital role in helping clients secure appropriate Healthcare Liability Insurance coverage by proactively addressing factors that influence underwriting, coverage structure, and claim response.
- Obtain a complete understanding of services: Ensure all procedures—including off-label and emerging therapies—are fully disclosed during underwriting and reflected in the application.
- Review policy language carefully: Evaluate exclusions, limitations, and sublimits to confirm how coverage applies to specific treatments and services.
- Align coverage with operations: Confirm that physicians, mid-level providers, and services are properly scheduled or contemplated within the policy.
- Address product-related exposures: Evaluate whether separate Product Liability coverage is needed, particularly when sourcing or administering biologics or compounded products.
- Monitor changes in operations: Encourage clients to report new services, staffing changes, or expansion into additional locations to avoid unintended coverage gaps.
- Assess marketing and consent practices: Review websites, social media, advertising materials, and informed consent documentation to identify potential areas of liability.
Working with a specialized partner, such as the Healthcare Liability experts at Burns & Wilcox, can help ensure risks are appropriately evaluated, and coverage is structured to respond as intended.
Contributors: by Laura McCormick, Vice President, Regional Practice Group Leader, Professional, Dallas/Ft. Worth, Texas; Lily Chetosky, Broker, Professional Liability, Burns & Wilcox, Chicago, Illinois; Kelli Bernstein, Inside Broker, Burns & Wilcox, Brokerage Division, Atlanta, Georgia; Carrie Roberts, RPLU, Vice President, Professional Brokerage Division, GenStar Insurance Services.
This commentary is intended to provide a general overview of the issues contained herein and is not intended, nor should it be construed, to provide legal or regulatory advice or guidance. If you have questions or issues of a specific nature, you should consult with your own risk, legal, and compliance teams.
