Nail salons are no different to any other business in the sense that they face risks that can lead to unexpected losses. Thankfully, nail salon insurance is available to protect nail salons in the event that such an unexpected loss arises.
The insurance available to nail salons falls into three categories:
- Property insurance
- Liability insurance
- Other types of insurance
Property insurance
Property insurance, as its name suggests, covers your business property against accidental damage or losses due to theft.
It’s important that you insure for the full value of your property because if you’re underinsured in the event of a claim, you could be penalised. It’s also important that you check any conditions in your insurance policy because some policies make it a requirement that your salon has an intruder alarm or specific locks and cover for theft claims will be excluded if you don’t meet the criteria in the policy.
If you salon premises is rented, you should check your lease to see whether insuring the building is your responsibility or the landlord’s responsibility.
Liability insurance
Liability insurance covers you if a compensation claim is made against you. As well as covering any compensation award your liability insurer will also defend the claim on your behalf so you wouldn’t need to deal with solicitors. The legal costs and any associated expenses are covered.
There are a number of different types of liability insurance. Employer’s liability insurance, a legal requirement if you employ anyone, covers any compensation claims made against you by an employee. Public liability insurance covers compensation claims made against you by someone who isn’t one of your employees.
Public liability insurance usually comes with products liability insurance which is similar, but covers compensation claims arising out of defects in any products that you have sold or supplied rather than arising out of something that you have done or failed to do.
If you’re running a nail salon, it’s important to make sure that you make sure you have an insurance policy that’s been tailored to the specific needs of nail salons rather than relying on a standard business insurance package. A tailored policy will include:
- A treatment risk extension
- A financial loss extension
The treatment risk extension
The treatment risk extension is vital because standard public liability insurance policies do not cover compensation claims arising out of professional activities. As providing nail services is a professional activity, this means many claims would not be covered without this extension.
The financial loss extension
Standard liability insurance policies only cover compensation claims that involve injuries or property damage. They do not cover claims for purely economic losses. The financial loss extension rectifies this gap in cover.
Other types of insurance
Although property and liability insurance are the main types of insurance that a nail salon needs, there are other types of insurance cover that a nail salon should consider.
One of these is personal accident and sickness insurance. This replaces your lost income if you’re unable to work because you’re ill or have been injured, so you don’t need to worry about how you will be able to cover your monthly outgoings and can concentrate on your recovery instead. It pays a weekly benefit if you’re unable to work temporarily, or a lump sum if you will be unable to work on a permanent basis.
Another is legal expenses insurance. This covers your legal costs if you become involved in legal action. A wide range of different types of legal action are covered, such as criminal charges being made against you, finding yourself involved in a contractual dispute with a client or in a dispute with a neighbour, becoming subject to a VAT or tax investigation or having to deal with an employment tribunal.
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