Small Business Insurance for hairdressers

Small Business Insurance for hairdressers

As a qualified hairdresser, you might be close to achieving your dream of owning your own salon, but you also need to consider the risks involved. As a business owner, insurance takes on a whole new meaning, because there are various scenarios that could leave your vulnerable which could lead to a claim being made against you. The right type of insurance will protect you from some of the larger risks to hairdressers, therefore it is important that you get the right cover. Risks within your salon include, but are not limited to, the following:

Accidental injuries to clients in the salon
Claims of negligence from clients

Accidental injuries can include spilling hot wax on your client or burning them with perming or hair straightening chemicals and slipping on a wet floor. Whilst you should ensure your salon has the correct risk management in place to avoid these incidents, unfortunately they can still happen. To ensure you are covered for risks of accidental injuries to clients, you need Public Liability Insurance.

In an incident where you provide your client incorrect advice, either before, during or after a treatment they could also submit a claim again you for negligence. Ensure you are covered for these types of claims with a Professional Indemnity Insurance policy.

Your business model also makes a makes a difference to the insurances you need. Your two business models are either owning your own salon or renting a chair in a salon, the latter being an increasingly popular start-up business model. Let’s take a look at both of these business models, so you will know which type of insurance cover you need for your new hairdressing business.

Insurance cover for hair salon owners

Fitting out your own salon can cost you thousands of dollars in equipment, but what happens if your property is damaged or you have a break in? Make sure you discuss with your insurance professional cover for your property and belongings, otherwise in the event of an incident, this could be costly and reduce money from your profits. If you are looking to employ workers or apprentices, ensure you have the adequate Worker’s Compensation insurance solution.

Business Interruption Insurance is yet another type of insurance that is important for owners of salons, because it covers you if you can’t operate your business. If your building is flooded, suffers fire or storm damage and you can’t operate your salon until repairs are completed, this insurance can cover all your on-going costs until you can operate again. Bills such as your lease, employee wages, council rates, electricity and water, as all these bills still need to be paid, even if you can’t operate.

Insurance cover for the ‘rent a chair’ business model

If you opt for the ‘rent a chair’ business model, you avoid all the insurances required by a salon owner, however you do still have a duty to cover yourself. You need to check whether or not you are covered under the salon’s Public Liability and Professional Indemnity Insurance, because if you aren’t covered, you will need to obtain these yourself.

It all comes down to whether you are considered an independent contractor or an employee. As an independent contractor, you won’t be covered under the salon’s Worker’s Compensation Insurance, so it is important to consider taking out Personal Accident Insurance to cover yourself against work-site injuries.

As you can appreciate, insurance cover for independent hairdressers can be complex, depending on the business model you select and your own needs. For help deciding which insurance policies are suitable for your business model, talk to an insurance specialist today.

General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

SME Business Insurance

Business Insurance is used by many businesses, but it’s best suited to SME-type operators.

SME Business Insurance

What is SME Business Insurance?

Any business in Australia, including small to medium-sized businesses, will benefit from an added layer of financial security in the form of an SME Business Insurance cover. This provides owners and businesses with protection against financial risks and the loss of key assets. It also protects customers, employees, suppliers, and contractors.

Some types of insurance are mandatory, like Workers' Compensation, Professional Indemnity, or CTP Insurance for motor vehicles – these are called statutory insurance covers. Other types of insurance are optional, but they are important ways of reducing business risk and protecting your finances and assets.

What does SME Business Insurance cover?

Property Damage – cover ranges from fire, storm, lightning and other perils to any type of accidental loss or damage. The property insured includes damage to buildings, contents, stock, plant and equipment, raw materials, and consumer goods.
Business Interruption – covers weekly amounts or net profit loss and ongoing fixed costs following property loss or damage. Also referred to as Loss of Profits or Consequential Loss Insurance.
Burglary/Theft - covers break-in at the business premises and the damage is done, as well as theft of goods or stock;
Money - covers theft of money in various locations (during transit, in a locked safe, or in a private residence) at any time (within and outside business hours).
Liability - covers a variety of statutory and civil legal liability, including personal injury and property damage, environmental liability, management liability, statutory liability, professional liability, aviation, marine and motor vehicle-related liability;
General Property - covers specified portable property against accidental loss or damage once it is taken off the premises, within Australia or overseas;
Equipment - covers sudden internal derangement and accidental loss or damage to plant, equipment and machinery, as well as computer and other electronic equipment. Loss of stock and business interruption cover can also be part of this insurance.
Motor vehicle & mobile plant – covers registered and unregistered motor vehicles, mobile plant & equipment, farm equipment, construction plant, as well as attachments and trailers. This insurance can also cover loss of income, downtime and hire costs of replacement equipment.

Speak to an insurance expert

It is our business to understand your objectives, needs, financial situation and risk profile and provide you and your business with tailored risk and insurance advice.
This is how we work with your business:

1.   We analyse your objectives, needs, financial situation and risk profile to develop appropriate strategies and solutions.
2.   With your input, we undertake risk assessments and conduct market research to determine the most suitable insurance product(s) for your key risk exposure.
3.   Your insurance adviser will present appropriate strategies and solutions and also negotiate and place insurance covers agreed.

Frequently Asked Questions

How can insurance help small businesses in Australia?
- In Australia, small businesses are encouraged to invest in business insurance to help protect their business from costly eventualities like damage to property and liability claims. Investing in a comprehensive yet affordable insurance policy promotes the continuity of the business in times of losses or great financial trouble.
What does SME stand for?
Small-to-medium enterprises (SMEs) are businesses whose revenue, number of employees and assets do not exceed a certain threshold. Each country or industry defines a set of criteria to determine whether an organisation falls under the SME category.
How can insurance help small entrepreneurs or SMEs, or how it relates to risk management?
Risk transfer is one of the treatment approaches in managing risks in business, and insurance is an example of risk transfer. It’s a strategy that SMEs employ to shift a risk or a liability from one party to another when that party specialises in managing a specific kind of risk/liability.
Why is insurance important for business owners?
Getting an insurance policy for your business is important, as it cushions or completely shields you from the hefty costs of certain unforeseen issues (accidents, damages to properties, effects of force), legal claims, and other liabilities. Without insurance, business owners might be forced to foot the bill out of their own pocket.