Decoding Your Hairdressing Insurance Policy (Key Terms Explained)

By Dean Laming on July 30th, 2023

Understanding policy terminology can sometimes feel like solving a challenging puzzle.

It’s true that policies use complicated words and phrases. Spending even just a few minutes reviewing the terminology can provide the clarity you need to understand precisely what your coverage includes and excludes–and that’s what this post is for. Read on to learn more.

Understanding Your Hairdressing Insurance Policy: Clarifying Key Terms

1. Professional Indemnity Insurance

When providing hairdressing services, there is always a risk of a client claiming that your professional advice or service caused them harm or loss. Professional indemnity insurance (also known as professional treatment risk insurance) lets you operate your business confidently, knowing that potential claims won’t lead to devastating financial consequences.

  1. Public Liability Insurance

Accidents can occur in your salon that leads to injury or property damage to a member of the public, leading to potential legal claims against your business.

Public liability insurance is vital for any business that interacts with the public. It covers legal costs and any compensation claims made by third parties.

Public liability insurance protects your business from the financial implications of accidents, allowing you to focus on providing the best service to your clients.

  1. Employers’ Liability Insurance

If you employ staff, there’s a risk that they could be injured or become ill due to their work. If this happens, they may claim you.

UK law requires that you have employers’ liability insurance, which covers any legal fees or compensation claims made by employees.

Employers’ liability insurance allows you to fulfil legal obligations and protect your business from potentially significant financial outlays.

  1. Product Liability Insurance

The products used or sold in your salon could potentially cause harm to customers, resulting in legal claims against your business.

Protect your business with product liability insurance, which covers the legal and compensation costs associated with claims related to product usage.

Product liability insurance means you can confidently use and sell products, knowing you’re financially protected against potential claims.

  1. Buildings and Contents Insurance

Unforeseen events, such as fires, floods, or theft, can cause damage to your salon premises or its contents, resulting in potentially significant repair or replacement costs.

Protect your salon’s structure, valuable equipment, and furnishings by taking out buildings and contents insurance.

With buildings and contents insurance in place, you can be reassured that your business can quickly recover from unexpected events with minimal financial impact.

  1. Stock Cover

Your salon stock, including hair products, is vulnerable to damage, loss, or theft, which could lead to significant financial loss.

Consider obtaining stock cover as part of your business insurance policy. This insurance provides financial cover for replacing lost, stolen, or damaged stock.

With stock cover, you can replace necessary items without financial strain, ensuring your business operations can continue smoothly.

  1. Business Interruption Insurance

Business interruption insurance is an essential element to consider when you’re looking at your hairdressing insurance policy.

This specific insurance offers you financial protection if you temporarily shut down your salon due to unexpected events that damage your premises, like a fire or flood. The cover compensates for lost income during interruption, enabling you to maintain your financial obligations.

Business interruption insurance is a practical way to ensure the continuity of your hairdressing business, even in the face of unexpected adversity.

  1. Personal Accident Insurance

Personal accident insurance is another aspect of your hairdressing insurance policy that should not be overlooked.

This type of cover provides financial assistance if you or one of your staff members suffer an injury that prevents you from working temporarily or permanently. It can help with medical expenses and offer a payout if the injury results in permanent disability.

In a profession where physical well-being is crucial, personal accident insurance is a significant part of mitigating risks, helping to ensure that an unexpected accident doesn’t lead to a financial crisis.

  1. Legal Expenses Cover

Legal expenses cover is a part of your hairdressing insurance policy that deals with the potential costs associated with legal disputes.

Suppose a customer, employee, or third party brings a legal claim against your salon. In that case, this type of insurance can cover legal fees, the cost of legal advice, and any potential compensation payouts. Whether it’s an accident in the salon or a dispute with a supplier, legal expenses cover can be a financial lifeline.

Investing in legal expenses cover is a prudent way to protect your business from the financial strain of legal issues, providing peace of mind and financial security.

  1. Seasonal and Fleeting Increases

Your hairdressing insurance policy may include a term for seasonal and fleeting increases, which is an essential aspect to grasp.

This clause automatically increases your cover limits during specific periods when business is hecticfor example, Christmas or the wedding season. This added flexibility helps to ensure that your insurance coverage remains adequate, even during periods of increased activity.

Understanding and taking advantage of the provision for seasonal and fleeting increases can help ensure your salon remains appropriately insured during peak periods, safeguarding your business and maintaining customer trust.

  1. Excess and Premium Payments

The terms ‘excess’ and ‘premium’ are integral to understanding your hairdressing insurance policy’s cost implications.

The ‘premium’ is the amount you pay your insurer for your cover, while the ‘excess’ is the amount you agree to pay towards a claim before your insurance starts covering the cost. Typically, choosing to pay a higher excess can result in lower premiums. However, you must ensure the excess is affordable should a claim arise.

By wisely managing your excess and premium payments, you can tailor your insurance policy to fit your financial situation, thereby maintaining optimal coverage and ensuring the financial stability of your salon.

Choose Salon Saver for Hairdressing Insurance

Understanding the complex jargon of your hairdressing insurance policy can be a real headache.

But not fully grasping these terms might mean missing out on vital coverage, and in the worst-case scenario, you could find yourself financially vulnerable when unexpected incidents occur.

In the end, getting to grips with the terminology in your policy is about safeguarding your business for today and tomorrow. It gives you a solid foundation, assuring you that you have the necessary preparations to handle any challenges.

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

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