The cost of nail salon insurance will vary depending on a range of different factors. Those factors are different for each different type of insurance that a nail salon will be buying.
The types of insurance that a nail salon requires are:
- Property insurance
- Employer’s liability insurance
- Public liability insurance
- Products liability insurance
- Legal expenses insurance
- Personal accident & sickness insurance
Property insurance covers your business property against losses due to accidental damage or theft. You can insure both the building and its contents.
Clearly, the cost of your property insurance will depend on how much property you need to insure, although you should insure for the full value of your property because if you’re underinsured in the event of a claim because you have selected a sum insured which is too low, you will be penalised.
Your property insurance premium will also be affected by the construction of your salon building, its geographical location and what security is at the property. You can often get a premium reduction by upgrading the security by fitting an intruder alarm.
Employer’s liability insurance
Employer’s liability insurance covers compensation claims made against you by your employees. It is a legal requirement if you employ anyone.
This premium for this type of insurance is usually calculated using the annual payroll figure or the number of employees.
Public liability insurance
Public liability insurance is similar to employer’s liability insurance, although rather than covering compensation claims made against you by your employees,it covers compensation claims made by third parties.
Standard public liability insurance policies do not include cover for claims arising out of professional activities which would leave nail salons with a gap in cover. A bespoke nail salon policy should contain a treatment risk extension to plug this gap in cover and this will increase the price.
A financial loss extension is also required if you are a nail salon because standard public liability insurance only cover claims involving property damage or injuries and do not include cover for claims involving purely economic losses. This extension will increase the price.
Public liability insurance premiums are usually based on the annual turnover figure. The standard indemnity limit – the most the policy will pay in the event of a claim – is £1,000,000. If this limit is increased, the premium will be higher.
Products liability insurance
Products liability insurance is similar to public liability insurance. However, it covers compensation claims arising of out defective products that you have sold or supplied rather than claims arising out of something that you have done or failed to do.
Like public liability insurance, products liability insurance is usually based on the annual turnover figure, and again, if the indemnity limit is increased from the standard £1,000,000, the premium will be higher.
Legal expenses insurance
Legal expenses insurance protects you against unexpected legal bills if you find yourself involved in legal action and is an optional extra cover when you are buying a nail salon insurance package.
It is often available for a relatively small flat fee, although for larger businesses it can be based on the annual turnover figure.
Personal accident & sickness insurance
Personal accident & sickness insurance is another optional extra cover and covers lost earnings if you are unable to work due to an injury or illness. The premium is based on the number of people covered by the policy and the level of benefits selected.
General pricing factors
There are a number of general pricing factors which affect the level of your insurance premium and are not specific to any one specific type of insurance. These include your:
- Experience and qualifications
- Previous claims experience
- Credit rating