As with all types of insurance, the cost of beauty salon insurance will vary depending on a number of factors. These factors are the things that affect the likelihood of you having to make a claim and if you have to make a claim, the potential value of such a claim.
Some of these rating factors apply to all types of beauty salon insurance. Some of the rating factors relate to specific types of beauty salon insurance.
Generic rating factors
One of the obvious things that will affect the cost of your beauty insurance is whether you have made any claims previously. Sometimes an insurer will treat one claim as a “one-off” and ignore it, but generally, if you have made any insurance claims your insurance premium will be more expensive than it will be if you haven’t made any claims.
Your insurer will also take into account how long you have been trading and what qualifications and experience you have. If you are relatively inexperienced and don’t have any qualifications, you will be paying more than someone who is fully qualified and has been established for a number of years.
Property insurance rating factors
Property insurance covers your business property against losses due to accidental damage or theft.
How much property you need to insure will affect your insurance premium because it affects the amount that you might need to claim in the event of a loss. However, you should always insure for the full value of your property because if you are underinsured in the event of a claim you will be penalised.
The construction of your salon and its security are also important because they affect the chance of a loss occurring that could lead to a claim. If you have upgraded locks and a burglar alarm, for instance, your premium will be lower because the risk of a loss due to theft will be lower.
The location of your salon will also make a difference to your premium. If your salon is in an area where there is a high risk of theft, it will cost more to insure it. Similarly, it will cost more to insure a salon in an area that is known for flooding.
Liability insurance rating factors
Employer’s liability insurance is required by law if you employ anyone and covers you if one of your employees makes a compensation claim against you. The premium for this type of insurance is usually based on your annual payroll figure or the number of employees that you have because the chance of a compensation claim being made against you increases when you employ more people.
Public liability insurance is similar but covers you if a compensation claim is made against you by a member of the public. The premium for this type of insurance is usually based on your annual turnover figure because if you are dealing with more clients, there is more chance of a compensation claim being made against you.
Standard public liability insurance excludes cover for compensation claims which arise out of the delivery of professional services, but public liability insurance for beauty salons includes a treatment risk extension to cover these claims. As such, the premium will also depend on the type of beauty services that are being provided.
Products liability insurance covers compensation claims arising out of defects in any products that you sell or supply. Like public liability insurance, the premium is usually based on your annual turnover figure because if you sell more products, the chance of a compensation claim being made against you in increased.
However, the premium for your products liability insurance will also depend on the type of products that you are selling or supplying. It will also depend on whether you are making the products or are selling products that someone else has made.