Public liability insurance is important because as well as paying claims, your public liability insurer will also handle any public liability claims on your behalf.
It’s also important because we’re living in an increasingly litigious society and compensation claims are being made more frequently. Those compensation claims can be incredibly expensive to settle.
However, hair and beauty professionals need to make sure that they have a public liability insurance policy that is tailored to their profession, because a standard public liability insurance policy will contain gaps in cover that could leave them uninsured.
What public liability insurance covers
Public liability insurance covers compensation claims that are made against you by members of the public who allege that something you have done or failed to do has resulted in them being injured. They may have tripped over a trailing cable and injured themselves, for instance, or slipped and fallen on a recently mopped floor because you failed to warn them that the floor was wet.
As well as paying any compensation awarded against you, the insurance also includes any legal cost and other expenses that are incurred in the handling of the claim.
How public liability insurance for hair & beauty professionals is different
Standard public liability insurance only covers compensation claims that involve some sort of injury or damage. If there is no injury or damage, the compensation claim would not be covered.
This causes a problem for a hair and beauty professional. A bad haircut wouldn’t mean that the client had been injured, but it could mean that a model was unable to work, or a photographer or film studio incurred additional hiring costs.
To address this gap in cover, a public liability insurance policy tailored to the hair and beauty profession should include a financial loss extension which extends the policy so that it covers purely economic losses.
A hair and beauty professionals’ public liability should also contain a treatment risk extension. This is because standard public liability insurance excludes claims arising out of professional activities, so without this extension, any claims arising out of the provision of hair & beauty services would not be covered.
Compensation claims often involve complex legal arguments. Thankfully, liability insurers have legally trained specialists in their claims departments who can handle any claims on your behalf.
Not only does this mean that they can defend you against claims made against you where you are not legally liable, but it also means that they will know what level of compensation is appropriate.
This means that you do not end up paying more for your liability insurance than you need to because you are not paying more compensation than you need to, or paying compensation when you aren’t required to do so.
The cost of claims
Although public liability insurance isn’t a legal requirement in the same way that employers’ liability insurance is if you employ people, you shouldn’t consider operating without it because compensation claims can be expensive.
Even the most minor claim will cost over £1,000 because even if the compensation award is low, the legal costs will make that claim more expensive.
A fairly standard injury such as a broken wrist is likely to cost in the region of £20,000 to settle. Again, the legal costs will push this figure higher. If the claimant lost wages as a result of their injury, the settlement cost will be even higher.
Serious injuries such as spinal injuries can easily cost £250,000 or more. If the claimant needs ongoing care or if their home needs to be adapted to deal with an ongoing disability, the cost can be significantly higher.