What is Treatment Risk Insurance?

Treatment risk insurance is an important type of insurance cover for businesses in the hair and beauty sector. Businesses in this sector can protect themselves against some compensation claims via a standard business public liability insurance policy, but they also need the wider cover that treatment risk insurance provides.

So, why is treatment risk insurance so important for businesses in the hair and beauty sector?

Public liability insurance cover

Public liability insurance covers you if a compensation claim is made against you when someone feels that you have done something or failed to do something, and as a result, they have been injured or their property has been damaged.

As an example, if someone slips on a floor that you have just cleaned in your salon because you’d failed to warn them that the floor was going to be slippery, you would be liable to compensate them if their slip had resulted in them being injured. A claim for a broken wrist as a result of someone slipping and falling in your salon could well result in a five-figure compensation award.

It doesn’t just cover the amount of any compensation that is awarded. It also covers any associated costs and expenses. If the claimant lost wages as a result of an incident and you were to blame, those lost wages are covered as well.

And in addition to covering the costs of a claim, your public liability insurer will also have a legally-trained team that can handle any compensation claims made against you on your behalf. This means they can take care of potentially complex legal issues and you wouldn’t have to deal with solicitors.

What doesn’t public liability insurance cover?

The problem for businesses in the hair and beauty sector is that if they buy a standard business public liability insurance policy, they could find themselves uninsured in the event of a compensation claim being made against them.

This is a serious issue because as mentioned, claims can result in large compensation awards. Even a minor injury will result in a compensation claim that ends up costing at least £1,000 to settle. Serious injuries can cost well in excess of £250,000, with the legal fees and other associated costs and expenses on top of that figure.

The problem is that a standard business public liability insurance policy will exclude cover for compensation claims with arise out of professional activities. And most of what businesses in the hair and beauty sector do is the provision of professional services. Being uninsured in the event of such a claim being made would cause financial hardship for most salons.

How does treatment risk insurance fill this gap?

Treatment risk insurance provides the cover that the professional services exclusion would otherwise have taken away. It covers compensation claims made against you if those claims arise out of professional services.

It is vital that anyone in the hair and beauty sector has treatment risk insurance and doesn’t rely on a standard business public liability insurance policy, because being uninsured in the event of a compensation claim being made against you can be incredibly costly.

Example claims

If you’re applying a hair dye to someone it’d be considered a professional activity and as such, any claims arising from the procedure would be excluded from the cover under a standard public liability insurance policy.

If you’d not done the patch test correctly and the customer suffered an allergic reaction, the resultant compensation claim could cost over £5,000 to settle. If you had treatment risk insurance, that claim would be covered.

Some claims that wouldn’t be covered can be even more expensive to settle. Facial scarring that resulted from a procedure could cost £60,000 plus the associated costs and expenses. In addition, the court could order you to pay for private cosmetic surgery for the claimant. This wouldn’t be covered by a standard public liability insurance policy, but would be covered by treatment risk insurance.