Most salon owners know that salon insurance is essential to protect their business against unexpected losses. However, although they know it’s essential, many salon owners don’t fully understand salon insurance and what it covers.
Salon insurance is similar to the insurance many other businesses buy. It covers similar types of risk. There are a number of important differences though so it is important to buy an insurance policy that is designed for salon owners rather than rely on a standard business insurance policy.
Most people understand property insurance because it operates in the same way that the insurance on their home and contents operates. It covers the salon’s business assets such as the building,
- The fixtures and fittings
- Any business equipment
- The stock
Normally, the cover is provided on an “all risks” basis. This means you are covered for all losses that arise due to accidental damage or theft. However, despite the cover being described as “all risks”, there will be certain exclusions which means that some losses will not be covered, so it’s important that you check your policy to see what is and isn’t covered.
Salons tend to have shop fronts, and so there’s a risk that your front window will be broken either due to an attempted theft or vandalism. Not all salon insurance covers glass breakage, but most specialist salon insurance providers will make sure that your property insurance contains a glass cover extension that covers the cost of replacing any broken glass and any signwriting on the glass.
Liability insurance covers compensation claims made against you if someone believes you are responsible for them being injured or for their property being damaged. It comes in a number of forms.
Public liability insurance covers compensation claims made against you by third parties. It usually comes with products liability insurance. This covers compensation claims that arise from defects in any products that you’ve sold or supplied.
Employer’s liability insurance is similar but covers compensation claims made by your employees. You’re legally required to have this if you employ people.
Salon insurance is different to standard business insurance because a standard business liability insurance policy does not normally cover claims that arise from any treatments that you’ve provided. Specialist salon insurance should include a treatment risk extension which addresses this and covers compensation claims that arise out treatments that have gone wrong.
Standard business liability insurance policies don’t cover compensation claims involving purely economic losses, either. They only cover compensation claims that involve an injury or property damage. If you have done the hairdressing for a model and it wasn’t right there would be no injury or damage but the model could have lost income as a result or a photographer could have incurred additional costs. Salon insurance should contain a financial loss extension to cover this type of claim.
Legal expenses insurance covers your legal fees in the event of you becoming involved in legal action. You can become involved in legal action for a number of reasons, including :
- Disputes with neighbours or clients
- Criminal charges being made against you
- Employment tribunals
- Tax/VAT inspections
Salon insurance should include legal expenses cover as standard, but it is important to check because not all providers do.
Personal accident insurance
Another optional cover in a salon insurance policy is personal accident insurance.
When you are self-employed, you’re not entitled to receive sick pay if you are unable to work. Personal accident insurance replaces your lost income when you’re unable to work due if you have been injured or you are ill by paying a weekly benefit. A lump sum is payable if you will be unable to return to work as a result of your injury or illness.