Barbers need business insurance just as every other business does. It helps them protect their barber shops if they incur unexpected losses which could cause problems.
However, barber shop insurance is slightly different in terms of the cover that the insurance policies provide. These differences are needed because. although in many respects barber shops are similar to every other business, there are certain risks that are unique to barber shops.
A barber shop insurance policy will be similar to a standard business insurance policy in the sense that it will include property and liability insurance. You can also add legal expenses insurance and personal accident insurance. However, there are some extensions that you can add to a barber shop insurance policy to tailor it to your business.
Property insurance protects your barber shop premises and contents against losses due to accidental damage and theft.
You need to insure your property for its full value as you could be penalised if you had to make a claim and you were underinsured. It’s also important to ensure that you check your policy to see whether there are any policy conditions you need to comply with. You might require an intruder alarm, for instance.
Liability insurance comes in three different forms:
- Employer’s liability insurance
- Public liability insurance
Products liability insurance covers compensation claims made against you. Claims made by your employees are covered by employer’s liability insurance and if you employ anyone, this type of insurance is required by law. Claims made by other people are covered by public liability insurance. Products liability insurance deals with claims that arise from defects in products that you sell or supply.
Compensation claims are often expensive to settle. Relatively minor injuries can result in claims that cost £10,000 – £20,000 to settle, whereas if a more serious injury is involved, the eventual settlement cost could be ten times that amount.
In addition to the compensation awarded, liability insurance also covers any associated costs and expenses, such as any legal fees that are incurred.
Liability insurers will help you deal with any compensation claims. These claims often involve complex legal issues so this is important. The insurers have legally trained teams that specialise in dealing with these types of claims which means that they can ensure the best possible outcome.
Legal expenses insurance
You can become involved in legal action in a number of ways:
- Disputes with neighbours or customers
- Employment tribunals
- Tax/VAT inspections
- Contractual disputes
- Criminal charges
Legal expenses protects you if you become involved in legal action by covering your legal costs. Your legal expenses insurer can also provide assistance to help you handle the legal action.
Personal accident insurance
Personal accident and sickness insurance covers your income if you cannot work because you have been injured or you are ill.
A weekly benefit is paid if you are off work, so you will be able to cover your monthly bills during your recovery. If you won’t be able to return to work as a result of your injury or illness, a lump sum is payable instead.
The difference between standard business insurance & barber shop insurance
There are a number of differences when it comes to the cover provided by a standard business insurance policy and a barber shop insurance policy.
A standard business insurance policy’s liability insurance will only cover a compensation claim that involves either injuries or damage to property. Barber shop insurance should include a financial loss extension and that extension will mean that a claim for a purely economic loss is also covered.
Also, standard business liability insurance does not cover claims arising as a result of professional services. Compensation claims arising due to the provision of barbering services are excluded. A barber shop insurance policy should include a treatment risk extension to covers such claims.