Hair and beauty salons face risks in the same way that every other business does. And like every other business, they need insurance to protect them against these risks.
Many of the insurance products that hair salons and beauty salons require are the same as the insurance products that other businesses need. However, there are some differences in the cover that they require.
Property insurance
All businesses face the risk that their business property could be accidentally damaged or stolen, and hair and beauty salons are no different. Property insurance can protect a salon against such unexpected losses.
Liability insurance
All businesses that employ people are legally required to have employer’s liability insurance, even if the people they employ are part-time staff or apprentices. There are heavy penalties if you fail to have this type of insurance if you are required to do so.
Employer’s liability insurance protects you in the event that a member of staff makes a compensation claim against you due to something you have done or have failed to do.
All businesses should also have public liability insurance. This is similar to employer’s liability insurance, but covers compensation claims made by members of the public rather than employees. Anyone selling or supplying products should also have products liability insurance which covers compensation claims arising out of defects in any products sold or supplied.
As well as paying any compensation awarded against you, including any associated costs and expenses and the legal fees incurred in handling the claim, your liability insurer will also help you deal with the claim.
Treatment risk insurance
This is one of the main areas where insurance for hair and beauty salons is different. A standard public liability insurance policy will not cover compensation claims which arise out of professional activities. The treatment risk insurance extension adds this cover back in.
Why this is important is that if, for instance, someone suffered an allergic reaction to some hair dye, a standard public liability insurance policy would not cover any resultant compensation claim because applying hair dye is a professional activity. Such a claim would be covered under the treatment risk insurance extension, though.
Financial loss cover
A standard public liability insurance policy only covers compensation claims that involve injuries or property damage. It won’t cover compensation claims for purely economic losses.
If you use the wrong colour dye on a model’s hair, that model won’t have been injured but could lose earnings while their hair colour is rectified. A photographer could incur increased equipment or studio hire costs. All of these losses would be purely economic losses and as such, they wouldn’t be covered by the standard policy cover.
A hair and beauty salon policy should contain a financial loss cover extension. This extends the public liability insurance cover to include cover for claims involving purely economic losses.
Legal expenses insurance
If you find yourself involved in legal action it can be expensive. Legal expenses insurance covers your legal costs if you are involved in a range of legal action, including:
- Criminal charges being brought against you
- Disputes with neighbours or your clients
- Tax/VAT inspections
- Employment tribunals
In addition to covering your legal costs, your legal expenses insurer will also be able to give you advice and help you deal with the situation.
Personal accident & sickness insurance
This type of insurance covers your income if you’re unable to work because you’ve been injured or are suffering from an illness.
If you’re unable to work on a temporary basis, it pays a weekly benefit which means that you’re able to cover your outgoings until you can return to work.
If you will be permanently incapacitated, a lump sum is payable instead. A lump sum is also payable if you die, or in the event of certain injuries such as the loss of an eye or a limb.
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