Archive for the ‘salon insurance’ Category

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Beauty salon insurance – with and without the treatment risk

Monday, November 28th, 2011

Over the years, any business insurance broker will start to develop an understanding of which parts of the economy they can concentrate their activities. Businessinsure know that we can offer an excellent service to the SME market and all kinds and types of property owner. We don’t pretend to be experts at placing cover for aviation, nuclear and offshore, for example. But property owners, shops, pubs, offices, restaurants, takeaways, hairdressers and beauty salons are bread and butter to us.

We deliberately set out to explain as much as possible to our customers over the phone about their quotes, rather than just emailing or posting the quote and leaving it at that. We sometimes get unstuck though, by doing a proper broking job. We try and understand what our customers need. The Financial Services Authority (who regulate us) call this “demands and needs”. We have had many occasions when we have quoted a customer a comprehensive policy, for a figure (lets say £1,000) and they then come back and say another broker has quoted £650. We try and ascertain what alternative cover they have and 9 times out of 10, it is lesser cover. In addition to less cover there are usually higher excesses and more onerous terms.

After the customer has a claim, usually somethign small such as a broken window or theft, they realise that the wider cover and lower excess was actually quite a good deal and come back. As far as beauty salon insurance is concerned, the major difference in cover is that we can quote with, and without treatment cover. This can usually make a 50% difference in the premium. We will always point out to the customer the differences and usually email the two separate quotes. It is then up to the customer to decide, based on the information we have provided, if they need to take out the wider cover, with full treatment risks included.

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Salon insurance – adequate cover for stock

Tuesday, September 20th, 2011

Salon Hairdressing and beauty salons, along with many other types of business in the UK, have had to learn the hard way in recent years and adapt to survive. There are very few “pure” hairdressers trading around the country. Walk into any ladies or unisex salon and you are more likely to find displays of products, shampoos, lotions and conditioners for sale.

I have been involved in the supply of salon insurance policies for over 20 years. Back in the early 1990’s, you would be lucky to have a stock sum insured of a few hundred pounds. This was purely to cover the stock in trade. Most hairdressers and barbers simply stored the stock they used in the shop. If customers wanted to buy anything, this was sold to them in a normal retail sense. Then, as time went by, more and more salons realised that the stock they used was not normally available in the supermarkets or chemists. They started to increase the ra nge of stock until you would normally find one wall, in the reception area, stacked full of stock for sale. This meant that stock levels, and the sums insured, started to increase. As these items were stored at the front of the shop, smash and grab thefts, whilst not a big problem, did increase.

Over the past 5 years though, the type of stock sold has increased from expensive shampoos and conditioners, to curling tongs, straightening irons and hairdryers. These items, whilst you can pick up for a fiver in some supermarkets for the value offering, are top of the range. Whilst the salon may not physically own the stock, because the manufacturers supply it to them and only collect money for what is sold, they may have a responsibility to insure it.

It is therefore important, that when you are speaking to your business insurance broker (because this is the only way to get the right product at the right price) about your renewal, that you ensure that the stock sum insured is reviewed correctly. This must represent the maximum replacement cost of the stock that you have a legal (as in you own it) or a contractual (the supplier says you must cover it) responsibility to cover.

Smash and grabs are increasing. A thief that can smash a window and walk away with three or four straightening irons is going to cost you a fair few pounds to replace. But, you do not insure for the maximum possible loss, you need to insure for the cost of all your stock. Otherwise average will apply. This means, in simple terms that if you under insure, then your claim will be under paid. If you have £10,000 of stock, but only insure for £1,000, then any claims settlement will be for 1000/10,000 (one tenth) of the total cost. This applies to the claim, whatever the size. So if you lose the three or four straightening irons mentioned, then you do not get a claim settlement of £400, you only get £40.

This is something you need to understand when looking for a business insurance quote, particularly if you choose to look online, because you will not get any advice or help when using a comparison website.

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Commercial Insurance – Glass Claims – Watch your limit

Friday, August 5th, 2011

One of the major sources of minor claims under commercial insurance package policies is damage to shop front glass. Although many properties are now protected by roller shutters, the number of claims for glass damage have not really reduced in recent years.

It is not only outside of business hours that businesses suffer malicious damage to their windows, but during business hours. We have seen claims for everything from childrens bikes, golf balls, stones thrown up by cars, ladders and childrens buggys falling backwards causing damage to shop front windows.

With our Health and Safety culture in the UK, you are not allowed to replace a window, below approximately waist height, unless it is at a certain strength. Therefore, a shop with a window that has been in place for 20 or 30 years will have to replace it with a better, tougher, quality one. Which is of course more expensive.

As we all know the shop window is, your shop window. Retailers want this as big as possible as it is the best form of free advertising you will ever get. As a result single shop windows can now be made of huge pieces of glass. Huge pieces of glass cost huge amounts of money to replace.

In England and Wales, and to a slightly lesser degree in Scotland, anyone renting a premises, particularly shops and/or offices will be responsible under the terms of their lease for the glass.

Although you do not legally own the glass, because it is part of the premises, if it is broken then you are responsible for the replacement. This is where you need to check two things on your shop, office or salon insurance policy.

Firstly, that you actually have fixed glass cover. Surprisingly, some insurers do not automatically include this cover. Thankfully the numbers are very small and most nowadays have it automatically in their packages.

Secondly, once you have confirmed that you have the cover, you need to check what sums insured you have. The most we have seen paid out on a glass claim, was for a furniture shop, where three of the main windows were smashed over a weekend. The culprit was seen on CCTV but it was not clear enough to arrest or convict the individual. Unfortunately this seems to be an increasing story we hear regarding council and/or police CCTV, but that is a separate point. The total claim, including the emergency boarding up, was £8,500.

I think you know where this is going. If your cheap package policy only gives you a limit of £500 or £750, or £0, as some do. Then this is woefully inadequate.

Speak to your business insurance broker and make sure that your policy has the right limit. If you didn’t by your policy from a broker, then speak to one straight away and get them to review your current insurance policy to see if it is adequate.

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Salon insurance – getting the best quote

Tuesday, July 12th, 2011

Whilst no-one would ever say surviving in business these past three or four years has been easy, those that are still around have learned many, many lessons. Parts of the retail industry have been absolutely slaughtered. Think of the big name retailers that have suffered, disappeared or reduced their floor space. There are too many too mention here, but it has helped some of the smaller retailers. How? Because some of the larger companies that have gone were simply undercutting anyone and everything, because they simply added to their ever increasing debt mountain. They were hoping that they would see the recession out, but many were in trouble way back in the good times five or six years ago.

As a business insurance broker, we can see how well parts of industry are doing by the amount of new business we see.  A broker gets two types of new business. An existing company that is moving from one broker to another and the brand new, never before traded business. It is the brand new ones that are the measure of what sort of health a particular industry is in.

We are starting to see more and more enquiries for new salon insurance in 2011 than we saw through the whole of 2009, and we are only at July. Part of the process of setting up your new business is that you will need to arrange a suitable policy to protect your business, it’s assets and it’s liabilities. Now, setting up is never easy and never cheap. You do not want to pare costs to the bone at the expense of quality, and the same applies to any commercial insurance policy you decide to take out. You do not necessarily have to have bad, or lesser, cover in order to save money. Speak to a broker and let them look around for you, do not, whatever you do, simply go direct to a one insurer company, they cannot offer you any choice, so how do you know you are getting a good deal?

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Salon insurance – what should I look out for?

Monday, June 27th, 2011

As an independent business insurance broker, our role is to provide customers, or potential customers, with help and advice about the most suitable policy for them. Customers expect us to be able to sell them a policy that will provide suitable cover for them in years to come.

The difficulty we face and our customers as well, is that we make the best possible effort to provide a suitable policy at the best price. Take salon insurance for example, in an average town, with average sums insured, we would look to quote around £4/£500 per year. Of course, there are variations but overall, this is a good rough idea of the annual premium.

We go to different insurers and always get accidental damage and treatment risk, wherever available, as this is something that you need. It is not legally required, but these are the two biggest insurance threats. What can happen is that the customer who we quote £500 to, says that they have a quote for £400 etc etc. This is the frustrating part, we know full well that our policies and quotes are competitive, for the cover provided. If someone has a cheaper quote then it is more likely than not, that it is lower cover. If we then say to the customer, do you know that you do not have x, y or z cover, they don’t always care. They feel that they have bought a policy from a broker and it will help them out in the event of a loss.

Nothing we say at this quote comparison stage can help. As far as they are concerned, they are being charged 25% more by us.

So, what should you look out for? Make sure you have unlimited shop front glass cover, with lettering included. Treatment cover is a must, as well as accidental damage. Then, make sure you have a reasonable excess, around the £250 or £200 mark. Any higher and you have to question why buy the policy in the first place. As ever, speak to a business insurance broker, and let them decide what is best for you and get the quote in writing, and review it, before you accept the cover.

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Business insurance – glass cover

Tuesday, June 7th, 2011

Those of us that have worked in, or studied, business insurance will be told, or learn, within the first few weeks that you cannot usually insure something which does not belong to you. The example we are usually given is that you cannot take out a policy on your next door neighbours house or car and then, if they suffer a loss, put a claim in against it.

That, to most of us, is fairly obvious but it has to be laid down in statute and any type of policy will have this built into the policy wording.

However, you will have noticed that we said usually because, as with most things, there are one or two exceptions. We had an enquiry from someone looking for a salon insurance policy. As part of the normal underwriting and fact finding process we asked about their previous losses. They had been trading for 6 years and mentioned that they had a glass claim for £1,000 that was turned down. Why was it turned down? Because their previous policy that they had bought from a website that offered (and we use the term loosely) to compare business insurance. All that had happened was that the website had flagged up the cheapest, sold it on price and didn’t point out as boldly as they could have done, that there was no glass cover.

So, how does this relate to insuring things that do not belong to you? In the UK, the majority of shops, offices, restaurants, salons and takeaways wil be in rented premises. But, and it is improtant, as part of their lease over 95% of these businesses will be resonsible for all fixed glass and sanitaryware. Fixed glass means the shop front and rear glass including fixed mirrors in the building and snaitaryware means toilets and sinks.

Their policy did not have this cover, their landlord refused to make a claim on their commercial building insurance policy so the hairdresser had to stump up the cost themselves. Not only that, as it was a loss they had to declare it when looking for a quote. We managed to get them a competitive quote, with unlimited glass cover with a £200 excess.

If you do have a rented premises, please make sure that you have adequate insurance. You would not believe the cost of one smashed shop front window.

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Cancellation rights in relation to Business Insurance

Tuesday, May 31st, 2011

As a business insurance broker, we do have a detailed knowledge of all aspects of cover. We try to help anyone that phones us up, even when the chances of getting some business out of the call are very slim. We were open yesterday on the Bank Holiday and I received an interesting call from someone just looking for some advice.

This customer, Miss A, had just started a new venture and had received a salon insurance quote from a recommended broker. As everything was a bit of a mad rush to hit her start date, she hadn’t really had a chance to look around for any alternatives. After the initial start date had passed and the business had opened without a hitch, she was sitting down to review some of her paper work.

The reason being that she had just received the invoice for her insurance and one of her members of staff who was going to send the cheque, commented that it seemed a bit high compared to her last job. So, Miss A had asked us just for an idea of the costs. She gave me brief details and, based on what she had told me I knew that we would have at least three different insurers who would quote around the £400 mark, possibly less if we referred it back to the insurers.

Her quote, believe it or not, was £795.00, which was way over the top. She had proceeded with the cover, but I explained to her that, under the EU distance selling directive, she had 14 days to cancel the policy, at no charge whatsoever. She said that her brokers were closed on the Bank Holiday, but she would give them a call today as her 14 days are up on the 1st June.

If they play ball, then they should cancel the insurance cover, ab initio, or in plain English, from inception. But and it is a big but, you have to be careful because you are not getting 14 days cover for nothing. What you are getting is no days cover for nothing. Potentially you could be faced with a liability claim in months to come and, because you had no cover, you could be faced with a large bill.

The best thing the customer can do, is to try and get the current provider to reduce the premium, on the basis that the market price is a lot less than £795. Our recommendation was not for her to cancel the policy, she may just have to bite the bullet and accepted that she was over quoted for the first year and put it down to experience.

If you get a chance, always look around for an alternative.

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Beauty salon insurance – glass and sanitary ware cover

Sunday, November 14th, 2010

Anyone who owns or runs a hairdressers or beauty salon, will know the importance of a quality salon insurance policy. You will of course never expect to have a claim, that is the whole point of the cover, it is for the unexpected event.

If you have been running a salon for a number of years, the chances are you will have had a broken window. Not everyone of course, but as far as salons are concerned, in our experience, this is the biggest source (in number) of claims.

The value of each claim is of course limited to the cost of the replacement glass and any emergency call out costs. Increasingly, insurers are starting to apply overall limits to the sum insured for glass. You really do have to work out a rough idea of the replacement cost for all of the glass, front and back, at your property. Whilst a small back window may only be a few hundred pounds, your main shop front windows could cost thousands of pounds each to repair.

So, if your policy has a limit of a few thousand pounds and you have more than one ”large” window, you really need to get your limits checked. Some of the better, longer established business insurance companies, do have cover that is unlimited. This is a bit like final salary pension schemes though, they are disappearing fast.

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Salon insurance – treatment risk

Wednesday, November 3rd, 2010

One of the major risks facing beauty salons is for injury caused to customers. If a customer visits and slips over on something that was spilled on the floor, this will fall under the public liability.

If however a customer is having a hair cut or a beauty treatment and is injured, this will be excluded under public liability. What happens is, that most business insurance companies that cover salons, will have a separate section to allow you to “buy back” this treatment cover.

The limits for this cover do not usually mirror the standard liability covers and are restricted to say, £50,000 or £100,000 any one claim. It does not normally add in a huge amount to the premium, standard costs for treatment cover are around £35 per operative per year.

The part that needs to be checked, very carefully, is what treatments are actually covered. For example, we have just provided a quote for a brand new salon that is using various machines to provide IPL, laser and other treatments. None of them are invasive, but they are “heavier” treatments than standard hairdressing, manicures and other beauty treatments.

We quoted a figure, which the customer said was over 50% more than the nearest alternative. We had a range of cheaper quotes, but they were only for restricted treatments. We asked the potential customer to double check whether the alternative included IPL and laser. He checked the salon insurance quote he had got online and, as you have guessed, it did not provide him with the cover he needed. There was no legal obligation on him to take out the cover, but thankfully common sense ruled and he decided to take out the correct cover to protect him.

With the continued rise of no win, no fee solicitors it does not take much for a member of the public top make a claim. They can effectively do this for no cost at all. The solicitor will take up to 35% of any claims settlement. When we are talking £15,000 for someone who alleges their scalp has been injured during a standard hair cut, you can see why it is beneficial to take out this cover. Without it, your business could suffer financially.

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Hairdressers insurance – laminate flooring contents or tenants improvements?

Wednesday, October 13th, 2010

If you have a hairdressers insurance policy, this blog question may make about as much sense as a martian story book. But, you should consider the question, as it applies to your policy wording.

If you have a policy, or are looking for a quote, you will need to know the replacement costs of all contents in the building you trade from, that either belong to you, or you are responsible for.

It is very easy to work out how much your stock costs, if you have a stock control system. You can probably work out fairly easily how much your movable contents, such as chairs, sofas, computers etc will cost to replace. You are also probably responsible for what insurers call tenants improvements. If you do not own the building, you will not need to insure the structure (unless you have a full insuring and repairing lease, which we have talked about before).

So, you don’t need to insure the “bricks and mortar” but, if you have made any improvements to the building, that you would not necessarily take with you if you moved, then you will need to insure them. If there was a fire or a flood, these improvements will/could be damaged and you will be financially out of pocket.

One of the biggest costs, is your flooring. Most business insurance policies will have the option of including a separate item for tenants improvements, because they are cheaper to insure, because the likelihood of theft is much reduced.

If you have a laminate floor, nowadays you can have two types. Either one that is fitted, permanently, or you can have one that you could effectively take with you if you moved, almost like carpet tiles. Depending on the type of floor you have, your contents (if it is movable) or tenants improvements (if it is fixed) sum insured needs to be increased to account for this. A decent, hard wearing, shop suitable laminate floor can cost up to £10,000 for a reasonable sized shop. Make sure that you have adequate cover, speak to your broker for advice, that is what they are there for.

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