When you’re starting your own salon business the list of things to do is endless. Before you can even think about opening your salon’s doors to clients waiting to be pampered you need to write your business plan, get your finances in order and secure a location.
But an often overlooked task which should be high on your list of priorities is to get a salon insurance quote. Sorting this out sooner, rather than later, gives you an idea of how much you need to allow for your outgoings each month and gives you the chance to shop around to get the right cover before you start your business.
The good news is that getting the best salon insurance quote doesn’t have to be complicated. But just in case a policy or premium seems too good to be true, here are 5 essentials to look for before you go ahead.
You may face many of the same challenges and risks as most other business owners, such as flooding or fire damage to your property; becoming a victim of burglary; a client falling and hurting themselves; at times the list can seem endless.
Despite this, some salon owners think that the worst won’t happen to them. Perhaps this is partly down to the fact that there is no legal requirement to have salon insurance in place.
So, what are your legal obligations when it comes to business insurance? Well, regardless of that type of salon you own, there are two types of insurance which you must have by law if either of the following statements applies to you:
This essential cover protects employees if they’re injured following an accident, or they become ill, as a result of their work. If you’re found to be liable for the accident or illness and compensation has to be paid, this insurance may provide the funds to meet your liability. It can also cover the expensive legal costs of dealing with such a claim.
You’ll need to check your salon insurance quote to make sure that you have the minimum £5million of cover that’s required by the Employers’ Liability (Compulsory Insurance) Act 1969, however most insurers offer £10 million of cover as standard.
So, if you’ve got employees working in your salon, the chances are that you’ll need employers’ liability insurance. There are a few exemptions however and the most significant for your type of business is if your salon is family run and not set up as a limited company. For this to apply all members of staff must be closely related to you e.g. husband, sister, son etc.
Once you’ve got your employers’ liability in place, you’ll need to display a copy of the insurance in your salon where all employees can view it. You can choose to display the certificate electronically but all employees must be able to access it.
As a responsible salon owner, protecting your employees should be a priority. However, if you need further encouragement that employers’ liability is a must, remember that the Health and Safety Executive (HSE) is responsible for enforcing the law for this insurance and there are significant penalties for non-compliance.
For every day that you don’t have adequate employers’ liability in place, you can be fined up to £2,500. A further fine of up to £1,000 can be given out even if you have insurance but fail to display the insurance certificate correctly.
Hopefully, your employees will never become injured or ill as a result of working in your salon but the law, and common sense dictates that it’s better to be safe than sorry by getting your employers’ liability insurance sorted.
You may spend most of your working week pampering your clients in your salon but if you have a vehicle that you use for work purposes, then you’ll need commercial, rather than personal, motor insurance.
A standard motor insurance policy only normally provides cover for social use and commuting to and from your workplace. However, if you use your vehicle to visit clients in their own homes whilst providing mobile services, or you drive your employees around, then you’ll need specialist cover.
Commercial motor insurance will cost a bit more than personal insurance but you shouldn’t be tempted to risk choosing the cheaper option. If you ever did need to claim, your policy could be invalidated if you were using your vehicle for work purposes at the time. This will need to be purchased separately to the salon insurance cover.
Paying a higher premium could actually end up being less expensive in the long run if it means that you’re able to claim when you need the cover most.
Running a salon may not seem like the most dangerous career choice in the world but when you mix a busy workplace, wet floors, specialist equipment and sharp objects, almost anything can happen.
But just like your clients, no two salons are the same. When you get your salon insurance quote check that all the risks your individual salon face are covered. Most salon insurance packages are made up of optional, as well as core, covers. This allows you to tailor the policy to the needs of your business.
So, if you own a beauty salon, rather than or as well as a hairdressers or barbers, you’ll need to think about the additional risks that your business is exposed to. And it’s not just your insurance which you need to consider.
Beauty salons have different licensing requirements to hair salons. If you’re planning on offering any of the following treatments, then you’ll need to register with your local authority’s environmental health department:
Checks will be performed to ensure that you’re adequately qualified to provide the treatments and that your salon is suitable.
If laser treatments are among the services you’re planning to provide, you’ll also need to register with the relevant public body:
As you’d expect, the more varied and bespoke the treatments are that you provide, the higher your salon insurance quote is likely to be. This reflects the increased risks to your business because no matter how qualified and experienced you and your staff are, accidents can and do happen.
Setting up your business is an expensive time and it can be tempting to opt for the cheapest insurance. But this could leave you out of pocket big time further down the road if you find out that you’re not covered when it comes to claiming. Cheaper policies usually offer less cover or a lower quality of service; both of which could have serious financial consequences for your business when you need your insurance the most.
Instead of focusing on saving money, think about safeguarding the business that you’ve worked so hard to build from the impact that a claim could have on your ability to keep your salon open. Salon insurance is a necessity, not a luxury if your business is to be a success. Finding a policy that offers the right cover for the best cost is a balancing act that’s important to get right.
With the risk of contradicting the previous point, it’s also important that you only pay for the cover you need. After all, if you look after the pennies, the pounds look after themselves, as they say.
Choosing to buy a policy that can be tailored to suit your needs will be more cost effective than one that provides blanket coverage to all salons, regardless of what treatments are offered.
Some of the covers you may want to consider include:
Public liability insurance
Your clients will visit your salon to look good and feel better about themselves but as with any busy workplace, there are risks. Your clients could:
No one wants to think about the worst happening but if a client does become injured or ill whilst in your salon, you could find yourself liable for compensation claims and costly legal fees.
If you own the building where you run your salon from, then this is designed to cover the rebuild and associated costs incurred following a claim. It will also cover any permanent fixtures and fittings if they were to become damaged following an insured incident such as a fire or a flood.
After your employees and your salon, the equipment you use is key to the success of your business. Having this cover means that if the contents of your salon are damaged or stolen, you can replace them . And get back to running your business.
If your salon falls victim to a flood or fire, you may not be able to operate your business for a while. Business interruption will cover you for a reduction or loss of income caused by such an insured event. As a hairdresser, beautician or nail technician you may be able to continue your business elsewhere while your salon is out of action. In such circumstances, Increased Cost of Working cover could help with the expense of renting another space to trade from.
Note: Don’t forget to review your policy as your business changes. Very often salon owners buy an insurance policy when they start their business and simply renew it every year without checking whether the cover is still relevant.
Choosing the right provider to purchase your salon insurance from is just as crucial as getting the level of cover right.
Here at Lloyds Bank Business Insurance Services, we understand the importance of trust, which is why we’ve chosen to work with Arthur J. Gallagher Insurance Brokers Limited, one of the UK’s largest insurance brokers.
They understand the unique risks that your salon faces and their experienced advisers can help take the guesswork out of finding a policy that’s right for you. Ready to get started?
You can get an estimate in less than 10 minutes, then speak to an adviser who will check your details and make sure you have the right cover before you buy.
If you’re unsure of the insurance you need and would like some guidance about how to fully protect your business, then you’re only a phone call away from advice.
Simply call 0345 377 0002 and an experienced advisers will be on hand to help you get the right level of shop insurance in place. Lines are open 8am to 6pm, Monday to Friday.