Day: August 10, 2020

Salon and Spa Insurance Guide: 5 Things All Owners Need To Know

#1. What is salon and spa insurance?

Salon and spa insurance is a type of commercial insurance designed for the unique risks this industry faces. As the owner of a salon and/or spa, you need to make sure you’re protected against major risks that could seriously disrupt your business. These risks like property damage, employee theft of cash, customer injuries, employee injuries, Covid-19 infections, and more.

Provide offers online quotes for salon and spa insurance, which covers all these major risks that business owners need to protect against.

#2. What types of insurance do salons and spas need?

1. Commercial property insurance

This protects your salon and spa from common and major risks like:

1. Fire and explosions
2. Water damage
3. Furniture damage
4. Inventory damage
5. Burglary
6. Vandalism

Besides some exceptions, commercial property insurance essentially protects all the contents of your store. You can also choose to add on coverage to protect the building itself, which is useful if you happen to own your commercial property premises.

Some examples of what commercial property insurance covers are:

1. Shop contents: inventory, furniture, renovations, equipment, etc.
2. Glass fixtures (e.g. shop display windows)
3. Employees’ and your personal belongings

Example: One of your electrical outlets in your salon and spa catches fire. The fire spreads to the rest of your salon and spa and destroys the premises. All your renovations, inventory and equipment are destroyed. This type of insurance will pay for the property damage caused, equipment replacement, and will replace your destroyed inventory.

2. Work injury compensation insurance (WICA insurance)

With the re-opening of Singapore’s economy, customers are beginning to slowly return to enjoying their favourite spa and salon treatments. This means that salon and spa employees will be coming into close and extended contact with large numbers of the public. Given the highly infectious nature of Covid-19, this presents a serious infection risk to salon and spa employees.

Under the Work Injury Compensation Act (WICA), business owners must pay for:

1. Medical expenses of employees for work-related injuries/sickness
2. Lost wages of employees while hospitalised/on medical leave

For patients infected with Covid-19, the government has already declared that hospitalisation charges will be waived for Singaporeans/PRs. However, business owners are still legally liable to pay the lost wages of employees while they’re hospitalised or in quarantine! Remember that hospitalised Covid-19 patients can be warded for up to 2 months (or more!). As a salon and spa owner, can you imagine how costly it would be to pay 2 months’ worth of salary for a worker in the hospital?

This is where Work Injury Compensation Insurance (WICA insurance) steps in. WICA insurance will protect your employees from work-related injuries/sickness, including Covid-19 infections.

This pays for:

1. Medical expenses like hospitalisation and surgery charges
2. Lost wages while on medical leave
3. Lawyer’s fees if your employees sue you for injuries/sickness

Work injury insurance also happens to be highly affordable:

Example 1: One of your staff gets infected with Covid-19, and spreads it to all your other employees. Your salon and spa manager ends up being hospitalised for one month. The manager’s monthly wage is $5,000. Because this is a work-related infection, you are now legally responsible for paying your manager’s lost salary. If you have Work Injury insurance, it will cover your managers’ lost wages.

Example 2: While mopping the floor, one of your staff slips and falls, breaking their hip. They require surgery to fix a steel plate in their hip. The hospital bill is $10,000. Because this is a work-related injury, you as the salon and spa owner are now liable for this $10,000 medical expense for your employee. Work injury insurance will pay for the medical bills, as well as lost wages while your staff is on medical leave.

3. Public liability insurance

Public liability insurance will cover two major liability risks for salons and spas:

1. Customer and third-party injuries (e.g. customer slips and falls)
2. Property damage to third-parties (e.g. during renovations)

This type of insurance will pay for medical expenses if people get injured while browsing in your salon and spa. If you intend to do renovations to your store, public liability insurance is crucial. It will protect you from legal liability if your renovations damage other people’s property, or injure other people.

Example: One of your employees was mopping the floor. A customer slips on the wet floor, breaking their arm. They require surgery to fix a steel plate into their arm. They sue you for their $30,000 to pay for their surgery costs, and for personal injury damages. This insurance will pay for their medical fees, your lawyer’s expenses, and any final damages awarded by the court.

Salons and spas should ensure that their public liability insurance includes specific cover for hair treatment liability and beauty treatment liability. This will protect you from legal liability if you injure customers while performing treatments. For instance, some clients with sensitive skin might suffer severe skin irritation if you dye their hair. For beauty treatments, some clients may suffer allergic reactions to your beauty products, especially if you perform procedures like chemical peels on them.

4. Fidelity guarantee insurance

If you allow employees to manage the cash register, or handle cash payments from customers, there is a real risk of employees stealing from you. Salon and spa owners should consider having Fidelity Guarantee insurance coverage to protect against dishonest staff members.

A Fidelity Guarantee insurance policy pays for:

1. Cash/cheques that are stolen by employees
2. Fraud committed by employees (e.g. issuing false invoices or false refunds for their own benefit)

Example: You assign an employee, Lisa, to man your cash register. For two days in a row, you come up short $500. After reviewing the CCTV footage, you discover that Lisa has stolen the money. He refuses to return the stolen money. A Fidelity Guarantee policy will pay for the $500 that was stolen from you.

Note: Fidelity guarantee insurance is common not just for salon and spas, but also for retail businesses and other industries that deal with lots of cash. If you’re not handling the cash yourself at all times, make sure you have Fidelity Guarantee coverage. Unless you’re running multiple salon and spas, you won’t need a lot of coverage – even having a policy with a small limit (e.g. a couple thousand dollars of coverage) is advisable to protect you from employees seeking to take advantage of you.

#2. Salon and spa insurance discounts – tips and tricks

CCTVs – Having CCTVs in your salon and spa can attract lower prices from insurers

Fire extinguishers, sprinkler systems – Having fire extinguishers and sprinklers can result in lower prices for property insurance

#3. How much does salon and spa insurance cost?

With Provide, salon and spa owners can get a comprehensive package of insurance starting from just $300/year – i.e. a little over $25/month. That’s probably less than what you’ll spend on your phone bill! Considering the significant amount of protection you get, that’s a really good deal.

You can mix and match any combination of the above policies to suit your needs.

#4. Salons and spas providing medical treatments need special coverage

Some salon and spas provide medical treatments. Examples include procedures like laser hair removal, microdermabrasion, IPL (Intense Pulse Light), chemical peels, and other similar therapies. If your salon and spa provides this, you’ll require extra coverage to protect yourself from legal liability.

Providing such medical treatments come with increased risk of potentially causing injuries to clients. If clients suffer severe breakouts, burns, or even severe skin infections like abscesses, they can certainly sue you for causing these injuries to them.

If you’re providing such medical procedures, you need to select a policy that specifically covers these risks. Provide’s platform makes it easy for you to cover these risks online, quickly and affordably.

#5. Where is the best place to get salon and spa insurance?

Provide is the best place to get online salon and spa insurance quotes.

With Provide, salon and spa owners can get a comprehensive package of insurance starting from just $300/year – i.e. a little over $25/month. That’s probably less than what you’ll spend on your phone bill! Considering the significant amount of protection you get, that’s a really good deal.

When you use Provide, you’ll save up to 25% on your insurance premiums. Our online operating model creates lower overheads, so we pass every dollar saved back to you. At Provide, we take pride in understanding the unique risks that each industry and business faces, so we can recommend the best solutions to protect you from such risks.

Claims Occurring vs Claims Made: What’s The Difference?

Insurance policies can be structured to respond to claims in two different ways: on a claims occurring basis, or a claims made basis. This is a feature that is generally seen in liability policies – for instance professional indemnity insurance, or directors and officers liability insurance (D&O liability insurance).

What is a Claims Occurring insurance policy:

A claims occurring policy will cover claims that occurred during your policy period, regardless of when the claim is actually made to the insurer. This means that you can switch insurers, file a claim with your new insurer, and you’ll still be covered even though the claim had occurred while you were insured with your previous insurer.

What is a Claims Made insurance policy:

A claims made policy will cover claims that happen while your current policy is active. It will cover claims that occurred in the past, but only if you held uninterrupted coverage from the time of the claim in question.

If you switch insurers, you may (or may not) be able to get coverage for claims that stem from incidents while you were with your old insurer. Some insurers will offer retroactive cover if you’re switching from another insurer, while others will not. Speak to your broker if you need clarity on this.

Examples on claims occurring vs claims made policies:

The above descriptions can be a little confusing if you’re new to insurance. So let’s look at some examples to make things a little clearer!

Claims Occurring: You started a construction company 5 years ago. You had a commercial general liability (CGL) insurance policy that expired last year. You haven’t renewed since then.

For your very first project in year 1, you built a house for a client. However, some cracks and leaks have recently occurred now that the building is 5 years old. The client is now blaming you for allegedly providing shoddy work, causing this damage to their building. Because this claim occurred in year 5  you’ll still be covered even though your policy has lapsed. See where the term “claims occurring comes from?”

Claims Made – Situation 1: You started a construction company 5 years ago. From Day 1 of operations, you bought a Professional Indemnity Insurance policy, written on a claims made basis. You have renewed this policy every year without fail, therefore maintaining uninterrupted coverage.

For your very first project in year 1, you built a house for a client. However, some cracks and leaks have recently occurred now that the building is 4 years old. The client is now blaming you for allegedly providing shoddy work, causing this damage to their building.

Because you have maintained uninterrupted coverage since you took on this project, you’ll be covered for any claims, even though the incident stems from work you did 5 years ago!

Note: The first date from which you’ve held uninterrupted coverage is called the retroactive date. It’s a technical sounding term, but as you can see from the example above, has significant implications on your coverage. Read this guide on retroactive dates for more clarity.

Claims Made – Situation 2: Let’s keep the story the same as above. However, this time, you only bought a Professional Indemnity Insurance policy in year 4 of operations.

Are you still covered if you have a policy? The answer is, unfortunately, no. That’s because a claims made policy only covers claims made while the policy is active. You didn’t hold an active policy while doing this first project in year 1, remember? You only bought the policy in year 4, so the insurer won’t cover this claim.

What kinds of insurance policies are claims occurring vs claims made?

Claims Occurring Insurance Policies:

1. Commercial general liability (CGL) insurance: This is usually written on a claims occurring basis. CGL policies are broadly-written policies that protect companies against liability for causing personal injury, property damage, and providing wrongful advice. As part of this comprehensive coverage, CGL policies are usually also written on a claims occurring basis, so clients have additional protection. Of course, such protection comes at a higher cost than other policies that are written on a claims made basis.

Claims Made Insurance Policies:

1. Professional indemnity insurance: This is usually written on a claims-made basis. Because of the significant exposure that insurers have when insuring professionals, insurance companies will tend to limit their exposure by structuring professional indemnity policies on a claims-made basis.
2. Directors and officers liability insurance (D&O liability insurance): This is usually written on a claims-made basis. When companies get sued, the company’s directors and officers will often get sued also.

Claims occurring vs claims made policies: which one should I get?

This depends on your needs, but the vast majority of SMEs will typically get claims made policies. This is because claims made policies already offer excellent protection against claims, and also happen to be much more affordable. The main thing that policy holders need to take note of is to hold uninterrupted coverage, so that any claims from past work will be covered.

Provide is the best place to get online business insurance quotes.

When you use Provide, you’ll save up to 25% on your insurance premiums. Our online operating model creates lower overheads, so we pass every dollar saved back to you. Speak with one of our expert brokers today.

Retail Shop Insurance Guide: 5 Things All Shop Owners Have To Know

#1. What is retail shop insurance?

Retail shop insurance is a type of commercial insurance designed for the unique risks that shop owners face. As a retail shop owner, you need to make sure you’re protected against major risks like property/inventory damage, retail theft, public liability, employee injuries or Covid-19 infections, and more.

Provide offers online quotes for retail shop insurance, which covers all these major risks that retailers need to protect against.

#2. What types of insurance do retail shops need?

1. Commercial property insurance

This protects your retail shop from common and major risks like:

1. Fire and explosions
2. Water damage
3. Furniture damage
4. Inventory damage
5. Burglary
6. Vandalism

Besides some exceptions, commercial property insurance essentially protects all the contents of your store. You can also choose to add on coverage to protect the building itself, which is useful if you happen to own your commercial property premises.

Some examples of what commercial property insurance covers are:

1. Shop contents: inventory, furniture, renovations, equipment, etc.
2. Glass fixtures (e.g. shop display windows)
3. Employees’ and your personal belongings

Example: One of your electrical outlets catches fire. The fire spreads to the rest of your retail shop and destroys the premises. All the renovations and your inventory are destroyed. This type of insurance will pay for the property damage caused, equipment replacement, and will replace the destroyed inventory.

2. Full theft insurance

This type of insurance compensates you if someone steals from your retail shop. For instance, if a customer walks into your store and steals your goods, you would be compensated for the value of the goods that were stolen.

Theft vs burglary insurance:

Theft and burglary might sound like somewhat interchangeable terms, but they carry very different meanings in insurance, with significant implications for policy holders.

A property all risks policy (which almost all shops will have) will cover burglary. However, if you read the fine print, this only covers burglary with forcible and violent entry. This means that coverage will only apply if someone breaks into your shop (e.g. picks your lock, cuts your padlock, smashes windows, etc).

Burglary coverage does not apply to theft, which is stealing goods without forcible and violent entry. For most shop owners, it is actually theft that is more concerning. Given that many customers will walk in and out of the store every day, it is very difficult to ensure that people don’t steal your goods.

A full theft policy will thus extend your coverage to include stealing of goods without break-ins.

Example: Someone walks into your clothing store. They pick up a large bunch of clothes, and head into your changing room to try them on. They hand you back the clothes they tried on, and don’t buy anything. At the end of the day during your stock-taking, you realise you’ve lost $500 worth of merchandise. When you review the CCTV footage, you realise the person who took that large bunch of clothes handed you fewer clothes than they took into the changing room. This type of insurance will pay for the value of your stolen merchandise.

3. Work injury compensation insurance (A.K.A. WICA insurance)

Now that Singapore has re-opened its economy, customers are beginning to slowly return to patronising retail stores. This means that retail shop employees will be coming into close and extended contact with large numbers of the public. Given the highly infectious nature of Covid-19, this presents a serious infection risk to retail shop employees.

Under the Work Injury Compensation Act (WICA), business owners must pay for:

1. Medical expenses of employees for work-related injuries/sickness
2. Lost wages of employees while hospitalised/on medical leave

For patients infected with Covid-19, the government has already declared that hospitalisation charges will be waived for Singaporeans/PRs. However, business owners are still legally liable to pay the lost wages of employees while they’re hospitalised or in quarantine! Remember that hospitalised Covid-19 patients can be warded for up to 2 months (or more!). As a retail shop owner, can you imagine how costly it would be to pay 2 months’ worth of salary for a worker in the hospital?

This is where Work Injury Compensation Insurance (WICA insurance) steps in. WICA insurance will protect your employees from work-related injuries/sickness, including Covid-19 infections.

This pays for:

1. Medical expenses like hospitalisation and surgery charges
2. Lost wages while on medical leave
3. Lawyer’s fees if your employees sue you for injuries/sickness

Work injury compensation insurance also happens to be highly affordable:

Example 1: One of your staff gets infected with Covid-19, and spreads it to all your other employees. Your retail shop manager ends up being hospitalised for one month. The manager’s monthly wage is $5,000. Because this is a work-related infection, you are now legally responsible for paying your manager’s lost salary. If you have Work Injury insurance, it will cover your managers’ lost wages.

Example 2: While mopping the floor, one of your staff slips and falls, breaking their arm. They require surgery to fix a steel plate in their arm. The hospital bill is $10,000. Because this is a work-related injury, you as the retail shop owner are now liable for this $10,000 medical expense for your employee. Work injury insurance will pay for the medical bills, as well as lost wages while your staff is on medical leave.

4. Public liability insurance

Public liability insurance will cover two major liability risks for retail shop:

1. Customer and third-party injuries (e.g. customer slips and falls)
2. Property damage to third-parties (e.g. during renovations)

This type of insurance will pay for medical expenses if people get injured while browsing in your retail shop. If you intend to do renovations to your store, public liability insurance is crucial. It will protect you from legal liability if your renovations damage other people’s property, or injure other people.

Example: One of your employees was mopping the floor. A customer slips on the wet floor, breaking their arm. They require surgery to fix a steel plate into their arm. They sue you for their $30,000 to pay for their surgery costs, and for personal injury damages. This insurance will pay for their medical fees, your lawyer’s expenses, and any final damages awarded by the court.

5. Fidelity guarantee insurance

If you allow employees to manage the cash register, or handle cash payments from customers, there is a real risk of employees stealing from you. Retail owners should consider having Fidelity Guarantee insurance coverage to protect against dishonest staff members.

A Fidelity Guarantee insurance policy pays for:

1. Cash/cheques that are stolen by employees
2. Fraud committed by employees (e.g. issuing false invoices or false refunds for their own benefit)

Example: You assign an employee, Robert, to man your cash register. For two days in a row, you come up short $500. After reviewing the CCTV footage, you discover that Robert has stolen the money. He refuses to return the stolen money. A Fidelity Guarantee policy will pay for the $500 that was stolen from you.

Note: Fidelity guarantee insurance is common not just for retail shops, but also for F&B businesses and other industries that deal with lots of cash. If you’re not handling the cash yourself at all times, make sure you have Fidelity Guarantee coverage. Unless you’re running multiple retail shops, you won’t need a lot of coverage – even having a policy with a small limit (e.g. a couple thousand dollars of coverage) is advisable to protect you from employees seeking to take advantage of you.

#2. Retail shop insurance discounts – tips and tricks

CCTVs – Having CCTVs in your retail shop can attract lower prices from insurers

Fire extinguishers, sprinkler systems – Having fire extinguishers and sprinklers can result in lower prices for property insurance

#3. How much does retail shop insurance cost?

With Provide, retail shop owners can get a comprehensive package of insurance starting from just $300/year – i.e. a little over $25/month. That’s probably less than what you’ll spend on your phone bill! Considering the significant amount of protection you get, that’s a really good deal.

You can mix and match any combination of the above policies to suit your needs.

#4. Retail shops selling jewellery, watches, and other precious goods need extra coverage

Precious goods: Some retailers’ line of business involves selling expensive goods like jewellery, watches, antiques or other precious merchandise. If this sounds like you, take note: most standard retail shop policies will actually exclude coverage for such merchandise.

Have a look at this policy’s exclusions, which is taken from the policy wording of a well-known American insurer. This is a typical example of what most standard retail shop policies will not cover:

“This retail shop policy excludes loss or damage to gold, silver, platinum, or other precious metals and jewellery, watches, pearls, set or unset precious stones or furs, and garments trimmed with fur”. 

If you’re selling these expensive goods, you need to have a tailored policy that specifically covers these risks. Provide’s platform makes it easy for you to cover these risks online, quickly and affordably.

#5. Where is the best place to get retail shop insurance?

Provide is the best place to get online retail shop insurance quotes.

With Provide, retail shop owners can get a comprehensive package of insurance starting from just $300/year – i.e. a little over $25/month. That’s probably less than what you’ll spend on your phone bill! Considering the significant amount of protection you get, that’s a really good deal.

When you use Provide, you’ll save up to 25% on your insurance premiums. Our online operating model creates lower overheads, so we pass every dollar saved back to you. At Provide, we take pride in understanding the unique risks that each industry and business faces, so we can recommend the best solutions to protect you from such risks.