In many ways, barber shop insurance is similar to the standard business insurance policies that every other business needs. It protects barber shops from unexpected losses that can cause you problems.
However, there are some important differences in the cover that barber shop insurance policies provide, and these differences in cover are needed because, in addition to facing the risks that every other business faces, barber shops also face their own unique set of risks.
Like standard business insurance policies, barber shop insurance will cover property insurance and liability insurance. Barber shop insurance can also be extended to cover legal expenses insurance, as well as personal accident insurance. There are also a number of extensions that can be added to barber shop insurance.
In the same way that you insure your home and its contents against losses due to damage and theft, you can insure your barber shop premises and its contents against these risks.
You should make sure that you insure your premises and contents for their full value, as you may be penalised in the event of a claim if you are underinsured. You should also make sure that you comply with any policy conditions that require certain levels of security on your premises, such as an intruder alarm.
There are three types of liability insurance
All three of these types of liability insurance cover compensation claims that are made against you. Employer’s liability insurance covers claims made by your employees and is a legal requirement. Public liability insurance covers claims made by clients and members of the public. Products liability insurance covers claims made following a defect in a product that you have sold or supplied.
Compensation claims can be expensive to settle. A relatively minor injury could result in a claim costing £10,000 – £20,000, with a more serious injury costing at least ten times that amount.
As well as covering any compensation awarded, the insurance also covers any wages that the claimant has lost, as well as any legal fees and other associated expenses that are incurred in the handling of the claim.
Your liability insurer will also deal with the compensation claim on your behalf. This is important because compensation claims can involve complex legal issues. Having a legally trained team that specialises in dealing with compensation claims can be beneficial, as it means you don’t have to source your own legal representation, or pay any compensation claims awarded, out of your own pocket.
Legal expenses insurance
There are a number of ways that you can find yourself involved in legal action. You could find yourself involved in a dispute with a neighbour or a customer. You might find yourself involved in an employment tribunal or a tax/VAT inspection. You could even have criminal charges brought against you.
Legal expenses insurance covers your legal costs if you find yourself in this situation. Your legal expenses insurer will also help you deal with the legal action.
Personal accident insurance
Personal accident and sickness insurance protects you if you are unable to work either on a temporary basis or permanently.
If you’ve been injured, it pays a weekly benefit so you don’t have to worry about how you are going to pay your monthly bills while you recover. If your illness or injury means you’ll not be able to return to work, it pays a lump sum.
How standard business insurance & barber shop insurance differ
There are two main differences between standard business insurance and barber shop insurance.
First, the liability insurance in a standard business insurance policy only covers compensation claims involving either an injury or property damage. Barber shop insurance includes a financial loss extension which means that purely economic losses are also covered.
Second, standard liability insurance excludes cover for professional services. This means that compensation claims that arise as a result of providing services as a barber would be excluded. Barber shop insurance should include something called a treatment risk extension that covers such claims.