The salon and day spa industry is constantly recreating itself, with new services and products, along with new clients. This creates the need to continually review new loss exposures in order to ensure that all of your insurance needs are met. Outlined below are just a few of the areas to consider when reviewing your current and future insurance coverages and limits.
The first area to consider is the types of services that your business provides to your clients. You absolutely, positively need Professional Liability Insurance to cover any of these exposures. Services such as microdermabrasion, massage therapy, laser treatments, botox injections, permanent makeup, permanent eyelash or eyebrow coloring or extensions, ear candling and weight reducing treatments, may require special coverage. These are some of the services which are generally excluded from standard professional liability coverage. Be sure to discuss this in detail with your insurance advisor.
Repackaging products with your salon name also increases your chance of a claim. You may be considered by the courts as the "manufacturer" in some instances, just because your name is on the bottle or box. It is a good idea to be added as an Additional Insured on the actual manufacturer's insurance policy.
Tanning services may require a separate policy. Spray tanning may be covered on a standard policy, but UV tanning will require its own policy through a specialty market.
It is also important to review your building contents and inventory at least annually in order to keep your insurance values up to date. This review should include the items built into the building or the build out that you have installed. The replacement cost of these "improvements and betterments" needs to be included in your values to ensure they will be covered in case of a loss. Leased equipment should also be included in this annual review.
Another area of coverage to discuss with your insurance advisor is Employment Practices Liability Insurance. Employment Practices Liability Insurance will protect you against claims of unfair or wrongful termination, sexual harassment, discrimination, invasion of privacy, libel and many other employment related claims. Some policies include a limited amount of coverage for this exposure - $5,000 to $10,000. You may want to consider increasing this amount, as the legal expenses to defend these types of claims can be very costly.
One last item to discuss with your insurance advisor is flood insurance. We have all seen the devastation that can occur and the resulting losses. Be sure that you understand what is covered and what is NOT covered by your business insurance policy.
Anne Cassidy is CPCU Assistant Vice President with Aon Affinity Insurance Services, Inc. Aon is a benefit provider offering insurance products and services crafted for PBA's salon/spa section. To learn more, call 877-738-6993 or visit www.aon.com.