What Hidden Beauty Salon Insurance Costs Are There?

By Darragh Timlin on July 7th, 2023

No one enjoys unexpected costs, especially when running a business. Insurance is essential, but are there hidden expenses lurking in the shadows? It’s common to find beauty salon owners unsure of the potential financial pitfalls they might face, leaving them unprepared for financial setbacks.

In this blog post, we’ll unravel the secrets of beauty salon insurance by exploring ten lesser-known factors that could impact your budget. By gaining clarity on these hidden costs, you’ll be better equipped to make informed decisions and protect both your business and your bank account. So, let’s dive in and uncover the mysteries of insurance!

1. Unforeseen Legal Expenses

Running a beauty salon comes with the risk of legal issues arising unexpectedly. When conflicts arise with clients or even suppliers, legal expenses can be a significant hidden cost. Disputes could result from service dissatisfaction, faulty products, or accidents that occur in the salon. Preparing for such scenarios is essential in managing a salon, as legal expenses can quickly spiral out of control. While salon insurance often includes coverage for legal expenses, it’s crucial to know the limits and exclusions outlined in the policy.

2. Loss Of Income Due To Building Damage

Unanticipated events such as fires, floods, or other natural disasters can cause extensive damage to your salon. The cost of repairing and rebuilding can be overwhelming, but the loss of income while your salon is closed for repairs can add to the financial strain. While many insurance policies include business interruption coverage, it’s essential to understand the details, including waiting periods and the length of time the policy covers the loss of income. Having adequate coverage can help to mitigate the economic impact while your salon undergoes repairs or relocation.

3. Hidden Costs Of Public Liability Insurance

Public liability insurance is crucial in protecting your salon from claims made by clients or members of the public who suffer injury or property damage while on your premises. However, some policies may have hidden costs, such as your excess or limits on legal expenses. It’s essential to review your policy carefully, ensuring that it provides adequate coverage for potential risks. Also, consider whether your policy covers incidents that occur off-site, such as during mobile or freelance services.

4. Underinsurance

Stock and contents cover protects your salon from claims relating to loss of or damage to your stock and contents.  If these were to be damaged by fire, flood or theft for example, you would be out of pocket.  Your items should be insured for a replacement as new value.  So in the event of a loss, you would usually get the cost the items would be worth to replace.

If you do not evaluate your values correctly, you could be under insured which means that in the event of a claim, you would not receive a full payout.  For example, if your stock and contents were insured for £15,000 but were actually worth £30,000, in the event of a claim, you would only receive 50% of the claim value as your items were under-insured by half.

So always make sure your replacement values are accurate as you may save some money on your premiums by under-insuring your items but could be left out of pocket in the event of a claim.

5. Additional Policies For Salon Owners

Besides the standard salon insurance policies, other coverages may be necessary to fully protect your business. These could include cover for items such as stock and equipment, glass breakage, or signage damage. It’s important to consider these additional policies and their costs to ensure that your salon has the best possible protection.

6. Premium Increases After Claims

Filing a claim with your insurer can often result in higher premium rates, as insurers consider your business to be a higher risk. To minimise the impact of such increases, it’s important to manage risks effectively, ensuring that safety procedures and staff training are up to date. Reducing the likelihood of incidents and claims can help to mitigate potential premium increases.

7. Limited Product Liability Coverage

Product liability insurance covers your salon from claims arising from the sale or use of products that cause harm or injury. However, some policies may have limitations or exclusions relating to specific products or ingredients. Fully understanding your policy’s coverage and any potential gaps is essential in protecting your salon from potential claims.

8. Inflation And Policy Adjustments

As the cost of goods and services increases over time, your salon’s insurance coverage may need to be adjusted to account for inflation. Regularly reviewing and updating your policies ensures that your salon remains adequately protected.

Get Covered Today with Salon Saver

Salon Saver is a new wave of beauty salon insurance that aims to provide low-cost core protection without the unnecessary bells and whistles. Our objective is simple; we want to protect businesses that know what they need and don’t want to pay for more than they have to. By understanding the potential hidden costs and limitations of salon insurance, you can ensure that your business is adequately covered and safeguarded against unforeseen risks. With a comprehensive and tailored insurance plan from Salon Saver, you can focus on growing your business, knowing that you’re protected from all angles.

Darragh Timlin

With over 25 years’ experience, Darragh is an expert in all things insurance. Starting his career in commercial property underwriting, Darragh has worked for a number of global insurers and is now Managing Director of Salon Saver, part of the wider Henry Seymour Group.

All articles by Darragh Timlin

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