Can You Save Money by Not Having Hairdressing Insurance?

Balancing the books is a crucial aspect of running any business, including hairdressing salons.

When assessing ways to reduce overheads, some salon owners might question the necessity of hairdressing insurance. After all, what are the odds of a fire, a lawsuit, or an accident? However, choosing not to have insurance can expose your business to substantial financial risks.

In this article, we aim to provide an understanding of why hairdressing insurance is a critical component of risk management, despite seeming like an additional expense. We will assess the potential costs of unexpected incidents and compare them against the cost of insurance coverage.

Understanding the benefits of affordable hairdressing insurance and the enormous costs you can incur without sufficient coverage is essential. We aim to provide you with the knowledge you need to make smart decisions for the future of your business.

1. Assessing Risks: Can You Afford to Go Uninsured?

Every hairdressing business faces a spectrum of risks. These range from treatment liabilities, where a client suffers a reaction to a product you’ve used, to public liability issues, where someone slips and incurs an injury.

It’s also important to note that there’s a surge in injury claims, with irritations caused by hair colour reaching as much as £35,000.

Now, imagine having to bear the brunt of this payout from your pocket because you chose to forgo insurance.

So, while avoiding insurance premiums might seem like a cost-saving strategy, the reality could be much more costly.

But with the right salon insurance, these risks become manageable.

2. The Cost of Hairdressing Insurance Vs. Potential Savings

The idea of paying for hairdressing insurance may seem like an extra expense that you could do without, especially when you’re trying to cut costs.

But let’s weigh this against the alternative scenario. Without insurance, a single incident could lead to a claim that amounts to thousands, if not tens of thousands, of pounds.

Plus, consider the added stress of handling the legal processes yourself.

These sudden costs could severely impact your business, negating any short-term savings you might have made by not taking insurance.

The answer becomes clear when you compare these potential expenditures against the cost of a comprehensive hairdressing insurance policy. The premiums you pay now are significantly less than the potential financial liability you could face.

3. Case Study: Financial Consequences of Uninsured Disasters

Let’s examine a hypothetical yet realistic scenario.

Imagine a busy day in the salon you offer your services when, unfortunately, a client suffers a severe allergic reaction to a hair dye you’ve applied.

They sue you for negligence because you failed to do a strand test and now seek compensation for their medical bills and emotional distress.

The client’s claim, if successful, could amount to thousands of pounds in compensation, not to mention the legal fees involved in defending the claim.

As an uninsured business, you’d be fully liable for these costs, which could lead to significant financial distress, even bankruptcy.

A similar nightmare scenario happened to a hairdresser who left her client under a heat machine for 30 minutes. The client, a mum-of-two, was awarded £17,000 payout after being left with a bald spot. Thankfully, the hairdresser was insured.

This scenario emphasises that a single claim’s potential financial consequences far outweigh the cost of insurance premiums.

4. Liability Claims: How Much Can They Cost You?

Picture a scene where a customer slips on a spilt hair product in the salon you offer your services and suffers a severe injury.

The fallout from this situation isn’t merely a couple of pounds and an apology. Liability claims can result in enormous legal costs, compensation payments, and even reputational damage.

These expenses can range from thousands to tens of thousands of pounds, sometimes even more.

Now, consider the same scenario but with an affordable hairdressing insurance policy.

Such a policy could cover public liability claims, allowing your insurance provider to handle legal fees and compensation payments. This protection is a lifeline, securing your financial stability and ensuring your business can continue to operate even when faced with potentially crippling liability claims.

5. Alternatives to Comprehensive Hairdressing Insurance

Often, hairdressers, particularly those just starting or operating on a tight budget, may consider forgoing comprehensive hairdressing insurance to save costs. However, doing so can expose them to potential risks, from client injuries to equipment damage, resulting in significant personal expenses.

If you are thinking of forgoing hairdressing insurance entirely, one alternative is tailored insurance coverage, where you opt for the most basic cover for your needs.

This could include getting a policy covering the most common risks associated with your particular hairdressing operations while skipping coverage for less probable events.

For example, you might prioritise public and treatment liability covers, safeguarding you against client injuries and damages caused by treatments.

This way, you’re still protected against substantial financial risks while keeping your premium costs more manageable.

Most importantly, you need to ensure that the type of insurance you get is adequate for your specific needs and risk exposure.

6. A Close Look at Public Liability Insurance for Hairdressers

Think about this scenario: again, a client slips on a wet floor in the salon you offer your services, but this time breaks an arm.

The compensation and potential legal fees from this single incident can quickly escalate, and without appropriate cover, you would need to pay.

Public liability insurance for hairdressers is a critical cover to consider. It offers protection against claims made by clients or members of the public who have suffered injuries or property damage due to your business operations.

This type of insurance can cover the cost of compensation claims, legal expenses, and even medical bills, thereby protecting your business from unexpected costs and ensuring its financial stability.

While the cost of the premium may initially seem high, the potential savings from having this cover in place in the event of a claim can be significantly greater.

7. Balancing Costs: Reducing Insurance Premiums

Thankfully, you don’t have to break the bank to secure your business. There are several ways to reduce insurance premiums while maintaining adequate coverage.

For example, improving safety measures where you work, conducting regular risk assessments, and implementing staff training programs can significantly reduce the likelihood of accidents.

This, in turn, lowers the perceived risk from an insurer’s perspective and can lead to lower premium costs.

8. Health and Safety Measures to Lower Your Risk

A busy salon’s daily hustle and bustle can sometimes lead to neglect of health and safety protocols. Unfortunately, this laxity significantly raises the risk of incidents that could lead to insurance claims, or worse, legal action if you’re uninsured.

What would happen if your client trips over a loose cable in the salon you offer your services?

By implementing robust health and safety measures, you can drastically lower the risk of such incidents. Regular risk assessments, maintaining a clean and clutter-free workspace, clear labelling and usage instructions for hair products, and comprehensive staff training can go a long way in preventing accidents.

Further, well-documented health and safety protocols can be helpful in negotiations with insurance providers, resulting in lower premiums.

Making an Informed Decision: The True Value of Insurance

It’s not uncommon for hairdressers to question the value of hairdressing insurance. After all, the premiums may seem like just another expense on an already lengthy list.

This is why understanding the true value of insurance is pivotal.

Insurance for hairdressers is not just an operational cost—it’s an investment into your business’s financial security and longevity.

In the long run, the price of a policy is minuscule compared to the financial risk you undertake by choosing to remain uninsured.

So, the real question isn’t whether you can save money by not having reliable hairdressing insurance but whether you can afford not to have it.

Dean Laming

Dean Laming is a Chartered Insurance Broker with more than 25 years insurance experience. Through various underwriting, operational and management roles, Dean has built up extensive knowledge of the hair and beauty sector and is now Managing Director of Salon Saver, part of the wider Henry Seymour Group.

All articles by Dean Laming