All businesses need public liability insurance and nail salons are no different. Although there are some unexpected losses that businesses could recover from if they weren’t insured, public liability insurance covers the sort of unexpected losses that could put a nail salon out of business – and no nail salon insurance package should be without it.
What public liability insurance covers
Public liability insurance covers compensation claims made against you by a member of the public who alleges that something you have done – or failed to do – has resulted in them being injured or damage being done to their property.
Some compensation claims can result in substantial compensation awards. In addition to the compensation awarded, there may also be an amount for the claimant’s loss of earnings if the claimant was unable to work as a result of an injury you caused. There will also be legal fees and other associated expenses. All of these costs will be covered by a public liability insurance policy.
Compensation claims often involve complex legal arguments. Your public liability insurer will have a legally trained claims team that specialises in handling compensation claims. This means that if a claim is made against you, you won’t need to worry about dealing with the claimant’s solicitor and can get on with running your business while your insurer handles the claim.
Public liability insurance does not cover compensation claims made against you by your employees. To cover such compensation claims, you’ll need employer’s liability insurance, and this type of insurance is a legal requirement if you employ anyone, even if you’re only employing them on a casual or temporary basis.
A minor injury such as light bruising resulting from a fall will be settled for a few hundred pounds. However, by the time the legal fees and other expenses have been factored in, it’s likely that the total claim cost will be at least £1,000.
A more serious injury such as a broken wrist is likely to end up being settled for something in the region of £20,000. If the person who was injured was unable to work due to their injury, that settlement could be much higher.
Severe injuries, such as spinal injuries, where the injured person will not make a full recovery, can easily result in settlements of £250,000. There could also be additional costs if the injured person needs to have their home adapted to reflect their disability, for instance.
Products liability insurance
Public liability insurance often comes as a package with products liability insurance. Whereas public liability insurance covers compensation claims arising out of something you’ve done or failed to do, products liability insurance covers compensation claims arising out of any defects in products that you’ve sold or supplied.
Legally, if you have sold or supplied a product, you’re responsible for any injuries or damage caused by defects in that product, even if you didn’t manufacture it, so it’s important that you make sure you have this cover.
Treatment risk extension
A standard public liability insurance policy will exclude cover for compensation claims which arise out of professional activities. This means that if someone slips or trips in the salon, any compensation claim arising from that would be covered. However, any compensation claims made by someone who has been injured or had their property damaged in the process of having their nails done wouldn’t be covered.
The treatment risk extension deals with this by extending the insurance, so that it provides cover professional activities.
Financial loss cover
Standard public liability insurance only covers compensation claims which involve either injuries or property damage. Compensation claims for purely economic losses aren’t covered.
It’s important to make sure that your public liability insurance policy has a financial loss cover extension so you don’t find yourself uninsured if a compensation claim for purely economic losses is made against you.