I’m a self-employed stylist about to open a hair salon, what hairdressing insurance do I need?
Gerry Donnachie, who heads up the underwriting team at AXA Business Insurance, answers your business insurance dilemmas
I’m a self-employed stylist and I’m thinking of moving my hairdressing business into a salon premises.
Up until now, I’ve been working from home and haven’t worried about business insurance and regulations.
However, I know I need to get insurance to open a hair salon as I’ll be dealing with customers from a shop premises, rather than customers visiting my home.
What hairdressing insurance do I need and how much should I look to pay for it?
The simple answer is that you have always needed hairdressing insurance.
Whether you’re working from home or in a salon, there isn’t much difference in the risks and regulations you have. If you're applying chemicals, hot appliances, scissors or razors to people, there are ways it can go badly wrong regardless if it’s your first job at your house, or your thousandth job in your professional salon.
Our underwriting team has a number of stories about claims we have settled on behalf of hairdressing and beauty businesses over the years. The truth is that your activities can come with high insurance liability.
Even a standard pair of curling tongs or straighteners can reach temperatures of 250 degrees – many of our heavy construction trade customers don’t routinely handle temperatures like that!
‘Girl burns off hair with curling iron' is a YouTube search we often run in the office for trainees. As a beauty professional, you're not going to leave tongs sizzling in someone's hair for five minutes but they can roll off a table, be grabbed by a child or burn into a carpet in a few seconds – all of which can happen to anyone on a busy day.
Having said all that, now I can say that your case isn’t unusual.
Many people get into hairdressing and beauty because they have a talent, and start by doing jobs for family, friends and contacts in a fairly casual way. At that point, you’re probably not even calling it a ‘business’, hence ‘business insurance’ is not top of mind.
Hairdressing insurance: First things first
Public liability insurance is needed when you start any kind of hairdressing work, at any location. It isn’t legally required, but I’d consider it an absolute basic.
When you get a quote for this, you’ll be able to add all the additional covers below at the same time, so this is your starting point.
Public liability covers you for property damage or injuries. Compensation claims arising from chemical burns, cuts, skin reactions to treatments, as well as the hot appliance injuries described above, are all covered.
Usually this cover will also include products liability, which will cover you if you are selling products from your salon and they cause injury or damage
You can choose from between £1m and £5m worth of cover (although higher limits can be arranged). A quote I have just run for a small hairdressing business with two employees came out at £150 per year for £1m of cover, and £250 for the highest level of cover.
However, the ultimate cost will depend on many considerations, such as what type of work you do (if you apply higher risk treatments, for example), the number of employees you hire, qualifications, the insurance cover level you choose, and so on.
If you hire someone to work for you, you also need employers' liability insurance. It covers your legal liability if an employee is injured in the workplace or falls ill through work.
It is a legal requirement and you can face heavy fines for not having it.
Check that very carefully: if you employ a close family member – say, it's you and your husband/daughter/mum working with you – it isn't legally required (just a good idea).
Most other work arrangements will need it though – including part-time, temporary, apprentice and casual workers.
Why you need insurance if you’re running a business from home
Lock, stock and barrel. If you run a business from home and don’t inform your home insurer, you are running a risk of future claims being turned down. Letting your insurer know just takes a phone call. As you’re moving to a salon, it’s not necessary now, but I’d like to flag that up to other readers.
When you get your quote, you’ll be able to cover all your liabilities and your salon under one package.
You’ll need to prepare a few figures so that you pay the right price and get the right level of cover. You’ll need to estimate the value of:
- The salon building (if you own it or are responsible for insurance).
- Contents – including fixtures and fittings, mirrors, displays, racking and the like.
- Stock – the value of stock, such as shampoos and hair products, that you have typically. Consider the replacements costs if stolen.
- Something to bear in mind: if you have a traditional shop front, you'll have the option of covering that too as an addition to your buildings cover. This is just how much you think it would cost to repair or replace things like the glass, shutters, blinds and lettering.
Things to think about as your hairdressing business grows
The best advice I can give to a growing business like yours is to update your insurance policy as you go.
When you get additional staff, invest in new equipment or change your premises, update your policy so it is always keeping step with reality, and your insurer knows what they are underwriting.
I'll end by mentioning insurance you may want to add for your hairdressing business now or at a later stage:
- Professional indemnity – if someone sues you for poor professional advice. As a hairdresser you might find that you start getting asked for advice on hair care and treatments by your clients. So, this isn't necessarily about what you do to your client, but what they do on your advice (and claim it’s your fault when it goes wrong).
- Business interruption – if you have to close the business temporarily after catastrophes like a fire or flood, this would cover the income you lose by not being able to work (up to a limit you set during the quote).
You can cover your hairdressing business online in minutes – our interactive wizard will help you choose what is right for you. If you'd like to talk to an adviser, you can call AXA on 0330 159 1520.