The Health Department called. Three cases of Hepatitis C were traced back to my shop. They issued an emergency closure order. The news trucks arrived. My business was dead. I looked at my insurance for “Business Interruption” to pay my rent while I was closed, and “Liability” to pay the sick clients.
Key Takeaways
- The “Communicable Disease” Exclusion (Again): Post-COVID, most policies exclude business interruption coverage for closures due to viruses/bacteria. You won’t get rent money.
- Liability Coverage: Your Professional Liability should cover the lawsuits from the sick clients (Bodily Injury), provided you didn’t violate the “Sterilization Warranty.”
- Gross Negligence: If the Health Department finds you reused needles or disabled the autoclave, insurance will deny everything based on “Intentional Acts/Gross Negligence.”
- Crisis Management: Some high-end policies include “Crisis Management” coverage, paying for a PR firm to handle the media fallout.
The “Why” (The Trap): “Virus” Exclusions
Trap 1: Loss of Income.
Your “Business Income” coverage triggers only upon “Direct Physical Loss” (Fire/Wind). A virus is not physical damage. Therefore, the shutdown is uninsured.
Trap 2: Sterilization Logs.
Every Tattoo Liability policy has a warranty: “You must maintain sterilization logs.” If the Health Department finds your logs are missing or faked, the insurer voids the policy.
The Investigation: “I Called Them”
I asked about outbreak coverage.
1. The Lawsuits (Liability)
- Scenario: 3 clients sue for Hep C.
- Result: Covered (up to policy limit), IF spore tests were passed.
- Limit: $1 Million goes fast with 3 lifetime medical claims.
2. The Rent (Business Income)
- Scenario: Closed for 3 months by Health Dept.
- Result: Denied. No physical damage to the building.
Comparison Table: Outbreak Survival
| Expense | Insurance Covers? | Notes |
| Client Medical Bills | Yes | Subject to Sterilization Logs |
| Legal Defense | Yes | Subject to Policy Limits |
| Shop Rent (Closure) | No | Virus Exclusion |
| PR/Reputation Repair | Rarely | Need Crisis Mgmt Rider |
Step-by-Step Action Plan
- Spore Test or Die: I cannot stress this enough. Weekly/Monthly spore tests from an outside lab are your only defense against a negligence claim.
- Single Use Everything: Move to 100% disposables. Tubes, grips, needles. Eliminate the autoclave if possible. It removes the “equipment failure” risk entirely.
- Crisis Plan: Have a lawyer ready. If the Health Department calls, do not speak to them without legal counsel. Admissions of guilt (“Yeah, I might have skipped a cycle”) are fatal.
- Review Limits: If you are a high-volume shop, $1 Million liability is low. Increase to $2 Million or get an Umbrella policy.
FAQ
Q: Can I sue the artist who caused it?
A: Yes, the shop can sue the artist (Subrogation), but if they have no money, the shop is still on the hook.
Q: Does “Spoilage” coverage apply to ink?
A: If the Health Dept confiscates your ink, “Spoilage” usually doesn’t cover it because it wasn’t a mechanical breakdown (fridge failure); it was a regulatory seizure.
[IMAGE: Graphic of a Spore Test Result Certificate with “PASS” stamped in green.]