Do You Need Shop Insurance If You Sell Goods in Your Salon?

By Darragh Timlin on June 17th, 2023

The main source of income for any salon comes from providing cosmetic treatments. However, in today’s competitive market, many salons are diversifying their services by offering a range of retail products for sale.

From moisturising creams to shampoo, selling goods in your salon is a great way to boost your revenue. However, it’s crucial to ensure that your business is adequately protected in case something goes wrong. You’ll need to ensure you have a comprehensive salon insurance policy in place that will cover you in case of product-related claims.

In this article, we will discuss the various components of salon shop insurance, including product liability insurance, and how to ensure you’re adequately protected. Read on to find out more!

Do Salons Need Shop Insurance?

As a salon owner, the best type of insurance policy for you will always be one that is designed specifically for your business.

Shop insurance, or retail insurance, is targeted towards businesses whose revenue comes solely from the sale of goods. However, it won’t cover the provision of services, such as the treatments that may be offered in a beauty salon.

It’s important to find an insurance provider with extensive experience in the salon industry, such as Salon Saver. A reputable insurer will be able to assess your needs, and the potential risks involved, and provide you with a comprehensive package customised to your requirements.

Understanding Salon Insurance: What It Covers

Salon insurance is a type of business insurance tailored to beauty salons, hairdressers, and other establishments that provide cosmetic treatments. A good salon insurance package will comprise many different policies, such as:

  • Commercial property insurance
  • Contents insurance
  • Employer’s liability insurance
  • Public liability insurance
  • Professional indemnity or treatment risk insurance

When selecting the right policy for your needs, it’s essential to understand what types and levels of cover are available, and how they apply to your business. For example, if you sell goods to customers, you’ll need to ensure you are covered financially for any claims related to your retail activities.

The Importance of Product Liability Insurance for Salons

If your salon sells products on site—be it haircare items or beauty tools—you should ensure that your salon shop insurance includes product liability cover. This is a type of insurance that protects a business from claims related to the manufacture or sale of goods to the public. It covers your liability for losses or injuries to a buyer, user, or bystander caused by a product you have sold or supplied. This includes damage that arises from a product malfunction, or simply from mis-selling the item in question.

Not every salon will require the same level of coverage; thus, assessing your retail activity levels can help determine your individual needs. For instance, if you only sell a few high-margin specialty products occasionally or as an add-on service (e.g., branded shampoo), then you might only require a basic policy. However, if you have a dedicated retail section with substantial inventory levels, obtaining a high level of cover becomes more critical.

What Types of Claims Does Product Liability Insurance Cover?

Product liability insurance is designed to protect your salon against claims arising from the products you sell to customers. Even if you are not the manufacturer, you may be deemed responsible purely for your role in selling the product. For example:

  • Allergic Reactions: A client could have an adverse reaction to a product purchased from the salon, such as hair dye or tanning oil. If the salon did not properly inform the client of potential risks or assess their suitability, they could be held liable.
  • Faulty Products: If your salon sold a faulty product, resulting in injury or harm, you could face legal action. For example, a shampoo or conditioner that damaged a customer’s hair, or a malfunctioning hair straightener that caused burns.
  • Ineffective Products: If a product sold by the salon does not provide the results it claimed to, leading to emotional distress or financial loss, customers might sue for false advertising.

It’s important to note that different product liability insurance policies will have terms, conditions, and exclusions that determine what is and what isn’t covered. You should ensure you understand the ins and outs of your salon insurance package before you make a commitment.

Stock And Contents Coverage: Protecting Your Salon’s Inventory

Stock and contents coverage is another crucial aspect of salon shop insurance. This is designed to protect your merchandise, tools, equipment, furnishings, and other tangible assets in case they are damaged or stolen. In addition to the physical products you sell, this type of insurance can also cover any equipment used for retail activities, like display stands or POS terminals.

When evaluating stock and contents coverage options for salon shop insurance policies, make sure to choose a coverage limit that accurately reflects the total value of your inventory and equipment. Keep in mind that some providers might offer specific extensions tailored to salons (e.g., increased limits for high-end beauty products). Always clarify with insurers before making a decision.

Contact Salon Saver for a Personalised Quote

By understanding the various aspects of salon shop insurance and selecting a policy tailored to suit you, you can rest assured knowing that your business remains financially protected. This leaves you free to focus on delivering exceptional services and products to your clients, without worrying about accidents or court claims.

Salon Saver specialises in comprehensive, tailored insurance for salons, including hairdressers, beauty salons and more. Our insurance policies are strictly no-fuss – they include all core covers you need to keep your business safe, without any unnecessarily expensive add-ons. To find out more, or to obtain a no-obligation quote, contact Salon Saver today. Our friendly team will be happy to help!

Darragh Timlin

With over 25 years’ experience, Darragh is an expert in all things insurance. Starting his career in commercial property underwriting, Darragh has worked for a number of global insurers and is now Managing Director of Salon Saver, part of the wider Henry Seymour Group.

All articles by Darragh Timlin

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