Understanding the Different Types of Salon & Their Insurance Covers

There are around 40,000 salons in the UK and the market is currently worth nearly £2 billion annually. Around a dozen new salons are being opened each week.

The majority of these salons are hair salons, although there are also many beauty salons and nail bars. Male grooming, in particular, is a growing sector.

Although the salons offer different hair and beauty services, the salon insurance covers that they need to protect their business are similar.

Property insurance

Property insurance covers your business property against losses due to accidental damage or theft. The insurance can cover your salon’s building as well as its contents, including the salon’s fixtures and fittings, your business equipment and any stock.

You should make sure that you insure for the full value of your property because if you are underinsured in the event of a loss, you could be penalised when you make a claim.

You should also check your insurance policy to see whether there are any conditions that you need to comply with. Some insurance policies will insist that you have a burglar alarm, for instance.

Liability insurance

Liability insurance covers you if a compensation claim is made against you by someone who believes that you’re responsible for them being injured or their property being damaged.

As well as covering any compensation, it also covers any associated costs including both your legal fees and the legal fees of the claimant.

Your liability insurer will have a legally-trained team that specialises in compensation claims. This team will handle the claim on your behalf so you don’t need to worry about dealing with solicitors or complex legal arguments.

There are three types of liability insurance.

Employer’s liability insurance covers you if a compensation claim is made against you by one of your employees. This type of insurance is a legal requirement if you employ anyone, even if you only employ people on a temporary or casual basis.

Public liability insurance is similar but covers you if the compensation claim is made against you by someone who isn’t employed by you. This type of insurance isn’t a legal requirement but, because compensation awards can be as high as £250,000 for certain types of injury, you would be unwise to consider trading without it.

The third type of liability insurance is products liability insurance. Again, this covers compensation claims made against you, but rather than covering claims arising due to something you have done or failed to do, it covers claims arising due to defects in any products that you have sold or supplied.

Liability policy extensions

Due to the nature of the salon profession, a standard liability insurance package will have a few gaps in cover and salons should make sure they buy a bespoke insurance package that has been tailored to their profession.

The first gap in cover is the treatment risk. A standard public liability insurance policy will exclude cover for claims arising out of the provision of professional services. This means that claims arising out of any beauty treatments would not be covered. A bespoke salon insurance policy should include a treatment risk extension to plug this gap in cover.

The second gap in cover is financial losses. Standard liability insurance only covers claims that involve injuries or property damage. Claims for purely economic losses are not covered. A bespoke salon insurance policy should include a financial loss extension to address this cover gap.

Other types of insurance

Although property insurance and liability insurance are the main types of insurance that a salon needs, there are other types of insurance that should be considered.

Personal accident & sickness insurance is one of these. This covers your lost income if you are unable to work because you’re ill or have been injured.

Another is legal expenses insurance. This protects you if you become involved in legal action by covering your legal costs.