Public liability insurance for salon owners covers salon owners or operators in the event that a compensation is made against them by a third party who alleges that the salon owner/operator was responsible for them being injured or their property being damaged.
The insurance normally includes products liability insurance. This covers compensation claims arising from products the salon has sold or supplied. It should also contain a financial loss extension to cover compensation claims arising from purely economic losses and a treatment risk extension to ensure that compensation claims arising from the services provided are not excluded. This refers to Salons for Hair, Beauty, Spa and Nail Salons.
Property damage claims
Compensation claims following damage to a third party’s property tend to be the cheapest claims to deal with. It’s not unusual for the damage to be limited to an item of clothing that has been ruined due to it having hair dye or bleach spilt on it. Offering to provide a free haircut and to replace the clothing will often satisfy the person whose clothing you’ve damaged.
However, there is potential for larger property damage claims. If your salon is on an upstairs floor, a sink left running could flood the property below causing substantial damage. Similarly, if an accidental fire starts because you’ve left hair straighteners on and that fire spreads to neighbouring premises, the damage could be extensive.
Compensation claims following an injury tend to be more expensive to settle. They also tend to be more complicated to settle, so the legal fees can be higher and having an insurer that can help you handle any compensation claims involving injuries becomes important.
As well as the compensation awarded for the injury itself, a compensation claim for an injury can also include amounts for additional expenses such as the cost of taxi fares for travel to a physiotherapist, the cost of the claimant’s lost wages and the costs of adapting the claimant’s home if the injury will result in permanent disability.
Although a compensation claim for minor bruising following a slip or fall can often be settled for not much more than £1,000, more severe injuries can be considerably more costly to settle. A claim for a broken wrist could easily cost £25,000 to settle and it’s not unheard of for more severe injuries from which the claimant will never fully recover to cost six-figure sums.
Products liability insurance
Products liability insurance is similar to public liability insurance, However, where they differ is that public liability insurance covers your business in the event of compensation claims arising from something you have done or failed to do, whereas products liability insurance covers you in the event of compensation claims arising from defects products that you have sold or supplied.
You don’t have to be responsible for the defect that resulted in the compensation claim. Even if you have not manufactured the product yourself, you can still be held legally liable in the event of a compensation claim if you sold or supplied the product.
Pure economic loss claims
Standard public liability insurance policies only cover compensation claims involving injuries or damage. They don’t cover compensation claims for purely economic losses.
A claim from a model for lost wages as a result of a haircut that has not gone according to plan would not be covered as there was no actual injury. Claims from photographers and film producers for lost income or additional hiring costs because a model or actress could not work would not be covered, either.
Public liability insurance for salons usually addresses this by adding a financial loss extension to make sure that these types of claims are covered.
Treatment risk extension
Standard public liability insurance policies exclude cover for compensation claims arising from the delivery of professional services. As the hair and beauty industry is a profession, this means that many claims would not be covered, leaving you uninsured.
The treatment risk extension removes the exclusion of cover for claims arising from the delivery of professional services. This is a vital cover extension for salon owners and operators, and protects your business against any claims arising from a treatment your business has provided.