In all walks of life there are uncertainties, and salons, like all other businesses, face risks.
There is the risk that the salon’s property could be damaged or stolen. There is the risk that a compensation claim could be made against the salon or that it could become involved in other types of legal action. There is the risk that the salon’s owner and staff could lose income if they found themselves unable to work because they’d been injured or had fallen ill.
Thankfully, salons can buy business insurance to protect them against the unexpected losses that can arise from these risks. This insurance for salons usually comes as a package that contains a number of different types of insurance, including:
- Property insurance
- Employer’s liability insurance
- Public liability insurance
- Products liability insurance
- Legal expenses insurance
- Personal accident and sickness insurance
Property insurance covers salons against their business property being accidentally damaged or stolen.
You should make sure you insure for the full value of your business property. Many salons underestimate the value of their property when working out how much insurance they need. If you are underinsured, you will be penalised if you have to make a claim.
Employer’s liability insurance
Employer’s liability insurance is a legal requirement if you employ anyone. You are required to display a certificate of employer’s liability insurance at your workplace. If you do not have employer’s liability insurance or fail to display the certificate, you could face a heavy fine.
Employer’s liability insurance covers compensation claims made against you by your employees. As well as covering any compensation awarded, your insurer will also defend the claim on your behalf. The legal costs are covered.
Public & products liability insurance
This type of insurance is similar to employer’s liability insurance but instead of covering compensation claims made against you by your employees, it covers compensation claims made against you by members of the public.
Standard public liability insurance excludes cover for compensation claims arising out of professional activities which would mean many claims made against a salon would not be covered. However, public liability insurance for salons should include a treatment risk extension to address this issue.
Public liability insurance covers compensation claims arising out of things that you have done or failed to do. Products liability insurance covers compensation claims arising out of defects in any products that you have sold or supplied.
Like employer’s liability insurance, your public liability insurer will defend any claims made against you on your behalf and the legal costs will be covered.
Unlike employer’s liability insurance, it is not a legal requirement to have public and products liability insurance. However, because compensation claims can be expensive to settle, it would be unwise not to have this type of insurance. Some compensation claims can cost in excess of £250,000.
Legal expenses insurance
If you find yourself involved in legal action it can be expensive, but legal expenses insurance covers your legal costs in such a scenario. The types of legal action that are covered include:
- Criminal charges
- Contractual disputes
- Disputes with neighbours
- Employment tribunals
- Tax and VAT inspections
Personal accident & sickness insurance
Personal accident and sickness insurance replaces your lost income if you are unable to work due to an injury or an illness.
If you are temporarily incapacitated, it pays a weekly benefit. Usually, you have to wait for a short period before you can start to claim – the length of time you have to wait will usually be better two and four weeks.
If you are permanently incapacitated, a lump sum is payable instead. A lump sum is also payable in the event of certain injuries, such as the loss of an eye or a limb, or in the event of the death of an insured person.