Salon and Spa Insurance Guide: 5 Things You Need To Know

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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.

  1. 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:

Worker Category Typical Premium Typical Coverage
Hairdresser, beautician, manicurist/pedicurist, etc. From $15/month, per worker $10 million annual limit per company

 

Cashier From $7/month, per worker
Admin-only worker From $5/month, per worker

 

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.

  1. 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.

  1. 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.

Cover Coverage Amount Typical Annual Premium
Commercial property insurance $100,000 $150
Public liability insurance $100,000 $100
Work injury compensation insurance $10 million per company $80 per worker
Fidelity guarantee insurance $5,000 $100

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.

 

 

 

 

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