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Determining your salon’s insurance needs

Determining your salon’s insurance needs may be one of the duties you dislike doing. However, as a salon owner or manager, you may not have a choice in the matter. Although this task may seem daunting, it can be made much easier if you follow these simple steps.

Step 1

Decide what type of insurance coverage you actually need. No matter what size salon you have, you will need public and product liability insurance. If you have more than one employee, you must have employees’ liability coverage. You’ll probably also want to protect yourself and your salon from lawsuits, so you’ll want to have professional liability/indemnity (beauty treatment liability) cover.

Most likely you’ll want to protect the salon’s business content and stock too, since it’s so expensive to replace it if it gets damaged or stolen. You will also want to cover the building and the property it sits on, unless you happen to be renting the space. Another thing to consider is business interruption compensation. Do you need protection in case some event, like a flood or fire temporarily closes your salon doors?

Do you need to consider getting protection from loss or theft of business money? Or cover your stock and content while its being transported somewhere? How about coverage for the accidental failure of your telephone line, or your electric, water, or gas supplies? Basically, just think about everything that could possibly go wrong, and decide how you can use insurance to protect yourself, your business, your employees, and your clients.

Step 2

Determine how much you are willing or capable of spending on insurance. Take a realistic look at your budget. Is the business doing well enough to afford the extra coverage, or do you need to stick to the basic coverage for now? If you can’t afford all the coverage at one time, then which types need to be your highest priorities? Insurance companies estimate the risks they are taking by how likely an event will occur. They also estimate the cost to them if they have to pay out a claim for the events they do decide to cover. As a salon owner, you should be making the same types of estimations.

Step 3

Do some comparison shopping for insurance coverage. Compare the companies and the services they offer. Compare each separate peril they cover or exclude. Compare the amounts of coverage offered for the same premium rate. Ask each company what discounts they offer. If you rent your space, find out what coverage is provided by the landlord. If you must cut the cost of insurance, see if the insurance company will modify the policy to tailor fit your salon’s individual needs.

Step 4

Buy the insurance! You’ve already done all the decision making and hard work. Now you can start determining your salon’s insurance needs for next year, based on your estimated business expansion.