Author: FSB Insurance Service
If you’re in the hair and beauty industry, you’ve faced an incredible number of challenges over the past few years. It’s been tough and it shows, however, IBIS World have found in their 2022 industry report that the hair and beauty sector is expected to grow by 54% year on year in 2022 so let the good times roll!
When times are difficult an unanticipated cost can be make or break for some salons and stylists, that’s why it’s essential to know how your insurance can help to soften the blow when the unexpected happens.
Whilst owning a salon does let you be free to do what you love best (making customers feel great) you still need to protect your business from accidents, fire, damage, or theft, unhappy clients and more!
Here’s some of the extra risks you might encounter that insurance can help you with;
If something goes wrong, you may receive a claim against you which could be difficult to reconcile, the right insurance can help you mitigate the costs associated with settling a claim.
Running a properly insured salon insurance means you could be protected against unexpected financial penalties raised by a compensation claim, fire or accident.
If a customer makes a complaint, proper insurance can help you to deal with a client’s claim rapidly and professionally, before they take to social media. You may find customers are ready to be more forgiving about a bad situation if you can be confident that you can settle it quickly.
Spending some time identifying and mitigating the danger in your salon, things like installing CCTV, following the NHBF code of conduct, or government advice, will help you to avoid some of the worst consequences of some risks, but even if you take the greatest care in the world you still can’t remove all of the risk no matter how hard you try!
So what should you know about insurance as a hair and beauty specialist? Well it goes beyond insuring just your premises. Keep reading to find out what you might need to think about and stay protected.
Insurances Hairdressers should consider;
Employers Liability insurance (EL) is a legal requirement if you are running any business that employs anyone; it helps to cover costs in the event of staff sickness or injury that’s caused by work they carry out for your business.
You will need this even if staff are just temporary or employed on a casual basis or even if they are sub-contracting for you, it’s the law.
You will need to provide your ERN or PAYE number to your insurer to make sure any future claims can be paid from your policy. Learn more about your ERN here.
Public Liability insurance (PL) covers damage or injury to a third party (or their property) for which you can be held legally liable, whether this is a customer, supplier or just a passer-by. It can also cover injury or damage incurred to/on property belonging to a third party.
Liquids like water, shampoo, conditioner and oils are a risk in most salons, not to mention trip hazards from cables attached to equipment and machinery. Check with your insurer to make sure you are covered for every risk you need to be.
It is common for self-employed people to have this insurance because of the protection it offers. If you’re working for yourself then you should pay serious attention to PL, if only to avoid crippling costs in the event of something untoward happening. Learn more about Public Liability insurance here.
Ok so you’ve decided to set up a stand at Salon International, run a braiding bar at Glastonbury, or start a mobile service, but do you know what you need to stay covered if you start to work away from your salon?
If you’re exhibiting or selling at a trade show or event, you may need to increase the sum insured on your policy, as not only will you have a full shop, but you’ll have a full stand at the show too!
If the venue you’re working at has requirements for businesses to have a certain limit of indemnity, you will need to notify your insurer. This can usually be achieved with minimal changes to your premium.
If you’re using heat, or electricals you will need to make sure that activity is covered. If you’re hiring any machinery it’s important to check whether it will be covered by the company you’re hiring from, or whether you need it covered by your own policy.
Selling products or services ‘off-site’ at trade shows, exhibitions, craft fairs or markets - it’s important to check whether such activities are covered by your policy. You can arrange for an extension to your policy with your insurer (either for a specific time period or for the rest of your policy term), or you can purchase specific exhibition cover from a different insurer. Learn more about ‘“Working Away’ and your insurance here.
Renting Chairs (Subcontracting)
Are you renting chairs out in your salon? It’s a great way to help out stylists and boost your salons’ profile, but what does it mean for your cover? Your insurer will consider this sub-contracting and you should be aware of what that means for your insurance.
The first thing you need to know is that there are two different types of contracting;
A labour-only subcontractor will work under your supervision and you will have certain responsibilities when working together. You provide equipment, they provide the skills.
You are responsible for labour-only contractors’ insurance. Failure to insure labour-only subcontractors properly could result in problems with your insurance policy and even a Health and Safety Executive penalty. So, make sure you update your policy if needed!
Bona-fide subcontractors work under their own supervision and direction. Using their own tools, often brought in to undertake work which cannot be done directly.
The contractor has the responsibility to decide how, when and where to work and would be paid once the work is completed. Bona-fide subcontractors are responsible for their own insurance.
So what does this mean for you? Well if you are taking on a stylist on a Labour-only basis you will be liable for labour-only subcontractors in the same way as a direct employee. So make sure they are included on your insurance as if they were employees.
Most Public Liability policies will include cover for Bona-fide subcontractors as a standard extension, subject to annual payments not exceeding a percentage of turnover and a requirement that you keep a record of their Public Liability insurance. Find out more about employing subcontractors here.
Treatment Liability Insurance
Treatments are the lifeblood of many salons business. But, a mistake during a procedure for a client or an unexpected allergic reaction to a product can mean as much trouble for you as for them.
Whilst Treatment Liability (TL) insurance is not a legal requirement in the UK it can help in the event that you find yourself in legal trouble after seeing a client.
Treatment Liability insurance is important because it helps to protect you from claims made because of injury or damage in relation to the professional services offered by therapists, hairdressers, barbers or beauticians.
Treatment Liability insurance can cover legal fees to defend claims of injury, illness or property damage due your services or advice and helps with compensation payments you may pay for damages.
Talk to a qualified FSB Insurance Service advisor to make sure you have the right cover for your business and protect yourself from being exposed should anything go wrong.
Just fill in the form below to request a call-back and an advisor will reach out to you or call 020 3883 7976 today.
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