Spas applying for CaseTrust accreditation from July must have insurance to protect consumers who sign up for pre-paid service packages, said the Consumers Association of Singapore (CASE).
Those already accredited will have to implement an insurance scheme by 1 October and it will apply to packages signed from the date they sign up for the insurance.
It remains optional, however, for operators to purchase coverage for existing customers.
This moves comes on the back of several high-profile spa closures over the last two years, which left thousands of consumers stranded with unused spa packages.
CASE said the insurance scheme will allow consumers to be compensated for the unused portion of their packages should the spa be closed for at least 30 days. The amount insured will be equivalent to the price paid for the package, subject to a deductible of S$150 per customer.
Currently, there is only one such insurance plan, the Spa & Wellness Warranty Insurance Plan. It was launched by the Spa & Wellness Association of Singapore (SWAS) and AVA insurance brokers last year.
Under this scheme, consumers get a copy of the Certificate of Insurance, which states the name of the spa business, the insured consumer, the insurer as well as the validity and value of the coverage.
Insured consumers can check the validity and value of their spa insurance via an online system too.
CASE is currently in talks with other potential providers for the protection scheme.
"We are constantly reviewing our accreditation criteria to ensure that accredited companies have consumer-friendly policies,"said CASE president Yeo Guat Kwang.
"The new mandatory insurance will protect consumers in cases of sudden closures. This will certainly boost consumers' confidence," he said.
Acting president for SWAS Susan Teng said the move will enhance consumer confidence in their members in the beauty, spa and wellness industry.
So far, only 15 of the association's 3,000 members have taken up the insurance because it was not mandatory and added to their costs, said Teng.
Spas that do not sell pre-paid packages are not required to obtain this insurance scheme.
Other than purchasing insurance, spas with the CaseTrust accreditation have to fulfill over 47 criteria, including offering a five-day cooling off period for packages signed and adopting a no-selling in treatment room policy.
Since the accreditation scheme was launched last April, 145 spa and wellness businesses have been accredited to date.