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How to get the Right Insurance for your Salon or Spa
43 Plays10 months ago
In the 12th episode of the Business of Style Podcast, hosted by BeautyCouncil, we welcomed Kieran Nock from Apollo Insurance for a friendly chat about insurance essentials for beauty professionals. Kieran broke down the ins and outs of securing insurance right from the start of your beauty career.
Kieran pointed out that getting insurance coverage early on is a smart move. He noted, "the moment you have dollar one coming through the door, you're going to want to have some sort of coverage in place.” This is vital because even activities like advertising, done before you actually start earning, could expose you to legal risks such as copyright infringement.
Here’s what we covered that you’ll find super helpful:
- Getting Covered Early: Starting with insurance coverage as soon as your business kicks off can shield you from unexpected liabilities.
- Understanding Liability Insurance: This type of insurance is crucial for covering damages for which you might be responsible, like injuries at your workspace or damages during a service.
- Professional Liability Insurance: Also known as Errors and Omissions Insurance, this is essential for services that impact clients directly, such as treatments. It protects you if something goes wrong during a service or if you forget a critical step.
Kieran also discussed specific scenarios, like renting a chair in a salon, which require particular attention to insurance needs. He emphasized that professionals in these situations should not only have general liability insurance but also consider additional coverage tailored to their arrangements.
For those new to business insurance, Kieran recommended chatting with an insurance professional to understand what coverage fits best and ensure it aligns with any contractual requirements.
This podcast episode is packed with straightforward advice for anyone in the beauty industry, from newcomers to experienced pros looking to understand their insurance needs better. Whether you're running a salon, renting a chair, or working independently, managing your business risks with the right insurance is key to keeping your operations smooth and secure.
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Transcript
Introduction to Workplace Insurance
00:00:00
Speaker
If you're curious about insurance and have questions around what you need to do to protect yourself while you're working, we've got Apollo here to help you understand and answer some questions around workplace insurance requirements and what happens in the event of a certain thing or two that could happen on a day-to-day basis.
00:00:29
Speaker
And so with me right here is Kieran Nock from Apollo, one of our partners. Kieran, I want to welcome you to our little Q&A here. And can you just take a minute and introduce yourself and tell us who you are and what you do.
00:00:40
Speaker
Awesome. Yeah. Thanks, Greg. My name is Kieran Nock. I'm a team lead in new business at Apollo Insurance. We specialize in offering digital insurance solutions for personalized tenants, home insurance, and then small business insurance. Really identifying that particularly on the small business insurance side, it doesn't need to be as complicated and as laborious a process as it has been in the past to get insured. So we provide online solutions for small business owners to get a quote and an insurance policy in place within that's
00:01:11
Speaker
Sounds great. Wonderful. And listen, everybody wants less complexity these days. And that's why we partnered with you. Getting people to sign up via your, your easy to use process is super simple. We've had some great feedback and we look forward to working with you down the road. So we've got a couple of questions here from some of our members and sort of some of the questions that have just popped up and we've come across over the years as we've worked with our members and of course, people working in the industry. So I'm just going to throw these at you right here.
00:01:37
Speaker
and I'm going to put you on the hot seat here and you're going to answer the best you can in terms of how we can address some of the more common concerns that we hear out in the business. So the first one is, we got a
Importance of Insurance for Professionals
00:01:50
Speaker
question here. When should professionals, and I substituted the word professionals because there was a long winded thing in there about who they were. When should professionals get insurance? Should they get it right away as soon as they start working in the industry? Or should they wait until they've been working for a little bit? So Kieran, what do you say to that?
00:02:08
Speaker
That's a good question, Greg. It depends. It ultimately depends on the operations, right? It's going to be different for every professional business owner. I think as a general rule, the moment you have dollar one coming through the door, you're going to want to have some sort of coverage in place because that is the threshold where you're really going to be at risk for incurring liability working with third parties. That's not to say that it doesn't make sense for certain business owners or certain professionals to get insurance.
00:02:35
Speaker
In place beforehand, just because you're making money doesn't mean or you're not making money doesn't mean that you can't be found liable for something. So a good example of that would be let's say you start advertising before you actually start making any money if that's something that you would do. You could incur issues or run into issues with copyright licensing.
00:02:55
Speaker
and you can be held liable for damages there. So I think that it's a good idea to assess and speak with an insurance professional about your operations, but as a general rule, the moment you start making money, you want coverage in place.
00:03:10
Speaker
Yeah, sounds like a good practice. And in fact, even when you begin to just do business without, let's say, necessarily putting your hands on a client, like you say, the issues around copyright, whether it's music, images, you name it, even the name of your company could could put you in a bit of hot water. So it's likely best to be properly covered from the get go, correct?
00:03:27
Speaker
Yes, yeah, absolutely. And I think that a good, a very good, strong consideration to make when you're, when you're setting out is not everyone's incorporating their, their business, like they're operating as themselves, their sole proprietor. And there's, there's a certain degree of legal liability that you were not protected from by incorporation. So if you were to have a lawsuit brought against you through your business operations,
00:03:53
Speaker
and your sole proprietor, your personal assets are on the line. So it's a really good idea to think about an insurance policy being in place to help protect you in the event of a claim. That's not to say that you are incorporated, you don't need insurance. It's still a surefire way to put yourself out of business if you do have a claim brought against you, but that is something that I advise all small business owners. If you're operating as a sole proprietor, you definitely want coverage in place.
00:04:18
Speaker
Yeah, a really good point considering that many people who get into this industry are young, perhaps don't have a lot of assets to begin with. The last thing you want to do is mess up your personal life just as your beginning. So let's talk about liability because you brought that up a few times and that was another question too that we came across.
Understanding Liability Insurance
00:04:32
Speaker
What is liability insurance? Maybe you can just describe what it is. Like what is liability? How can insurance cover it? And why do people in the personal service industry, why should they have it?
00:04:44
Speaker
Yeah, so I think that probably the short liability would be any sort of damages to a third party that you could be found liable for. I know it's kind of a that word plays into itself. But if you're if you're found negligent for damages, let's say you cause some bodily injury or or you damage someone's property, you could be found liable for those damages.
00:05:06
Speaker
And it's very likely that they're gonna try to recoup those damages from you. From a business perspective, I think that there's plenty of different kinds of liability insurance, but I think it's probably just, it's best to look at two core types of liability insurance as it applies to professionals. So the first would be commercial general liability insurance, which is standard to virtually every business. They're gonna wanna have this coverage in place.
00:05:31
Speaker
And primarily what this would look at covering is just general bodily injury property damages that could be incurred through the operations of that business. So a good example of that would be let's say you're hosting a client space that you're responsible for maintaining you either rent it or own it.
00:05:48
Speaker
they come in and they like something quite standard would be a slip and fall. They hurt themselves on the property that you're responsible for maintaining. You have a duty of care to make that property safe for them to come on site and contract business with you. You can incur liability if they were to hurt themselves and then they could sue you for weight loss of wages, emotional bodily injury, damages.
00:06:12
Speaker
And then so that that's actually a pretty broad coverage. Another example on the property damage side would be let's say you were weren't hosting someone on a space, but you were actually going to a client space or a third party space that you were renting and you were to cause some property damage there.
00:06:29
Speaker
let's say you're working in a barbershop, you leave the tap running. You cause water damage to the building. They are likely going to want to recoup those losses from you, especially if their insurance policy is responding. In that case, the insurer that they have is going to subrogate against your insurance policies where they're going to basically take legal action against you to recoup those damages.
00:06:54
Speaker
So that's very broad, high level overview of the commercial general liability insurance. I hope that I didn't make that too confusing. It sounds to me like if you wreck something or hurt someone or cause them some sort of damage that either cost them money or whatever the case may be, that is in a broad sense liability and you want to be covered against it to the best of your ability, if that's what I get from this, correct?
00:07:18
Speaker
Exactly, yes. And now the distinction between that and your professional liability insurance, also sometimes called errors and omissions insurance, that type of coverage protects you in the capacity that you're operating as a professional. So in a very technical sense, if the error side of that is where you do something that you shouldn't have done, you would have coverage under your errors and omissions professional liability insurance.
00:07:44
Speaker
or an omission where you didn't do something that you shouldn't have done, or you didn't do something that you should have done. So I think a good example of that is maybe how it pertained to some people in your industry would be, let's say you're a beautician and you're providing a wax treatment, the wax is too hot and it burns a customer.
00:08:04
Speaker
this would be considered to fall under your professional liability insurance because you're operating in that capacity as a professional. You should have known that the wax is too hot or tested it to make sure that you didn't harm your client. Right. That makes sense. And I guess if it's an omission, it could be maybe you didn't do a patch test on a client and they had a severe allergic reaction, lost a patch of hair for 12 months. Worst case scenario, they're a fashion model and wow, now you're in some hot water, right? So that's where you want that professional liability insurance, correct?
00:08:33
Speaker
Yes. Yeah, exactly. And I mean, I could give a very real example of something like that that happened to me when I was a child. I was getting my hair cut and the hairstylist cut my ear and it wasn't serious. I mean, it was just an accident. It looks like it grew back. So yeah, it's still there. Thank God. But fortunately, I mean, you know, my family, myself, me as a kid, like it's no big deal. You just
00:08:58
Speaker
but what we're starting to see as a society is more and more people like this, particularly true in the States and some cases coming up into Canada, people are getting a lot more litigious. You can't judge what an individual is going to do. I mean, they could just be a particularly disagreeable person and want to make a big deal of something small. They could take legal action against you. And even if you're found not to be liable for those damages, there's still costs associated with that.
00:09:27
Speaker
or that faulty claim being brought against you, there's legal fees associated with defending yourself. So court could still throw it out, but without an insurance policy in place, those are fees that you could end up incurring yourself and no one wants to. Yeah, very good. Very good point. That's a very good point because certainly you can't just go to court and defend yourself. You really need legal representation. And as we know, lawyers start at around, at least a decent one, around 300 an hour or so.
00:09:52
Speaker
Yeah, it can add up very quickly. And even if, like you say, the claim isn't necessarily substantiated, or it was sort of questionable, you still have to go, you still have to cover yourself. So let's transition over to, I really like those two pieces, by the way, the errors and omissions and the other general liability. So thanks for pointing that out.
00:10:13
Speaker
The other question we got here was somebody said, I'm a chair renter and I work about three days a week.
Insurance Needs for Chair Renters
00:10:19
Speaker
Do I need insurance? And by chair renter, essentially what we mean is somebody, an individual who literally rents a chair in another establishment and does business as an independent sort of entity and comes and goes. Do they need insurance and how does that differ than let's say a classic sort of more traditional setup where you have employees?
00:10:40
Speaker
Yeah, I mean, I feel like you can probably already know my answer to that question. I am biased towards insurance, but there is definitely a few things to consider. Even if you're renting, you're still operating in a capacity as a professional. In many cases, on a contract basis, you're not going to be covered under the commercial policy that
00:11:03
Speaker
that that space that you're renting from has. So that business, in many cases, they might even require you to carry your own insurance and provide proof of it, especially if you're renting the space. They might ask to be listed as an additional insured on the policy if you're renting that space. So basically, if you're going to cause any damage to the property, they know that you have coverage in place to help protect them for damages that you could be liable for. And then again, I mean, you still face all the same
00:11:32
Speaker
same risks of having a claim on the professional liability side because you're still operating in that capacity as professional. You can still cause that bodily harm to somebody as a result of not doing your due diligence to make sure that they're safe to transact business with you. So that there's the component of the landlord wanting to see or the business that you're renting from wanting to see that commercial general liability policy in place. But then also you might be responsible for that space around your chair.
00:12:00
Speaker
So again, if someone were to hurt themselves, slip and fall, like, I mean, there could be water on the floor. You didn't mop it up. You're responsible for maintaining that area that liability can fall upon you. So there's a lot of different components to, or reasons why you might want to have that policy in place. Yeah. Really good point. Once again, I suppose, you know, just another scenario. Let's say you are, uh, doing someone's hair. You, you spill a bit of liquid on the floor. That individual stands up, um, and they slip and fall and bang their head.
00:12:30
Speaker
may think oh that's covered under the under the general sort of premises insurance but because you did it or you were involved in it certainly it may or may not apply so great great reminder to everybody that you will not necessarily be covered in the event of an injury or anything else just because you're working in another location that insurance can be limited I guess right to the operations which it is which could be a simple
00:12:54
Speaker
somebody who just buys a space and rents it out and they're covered for things like maybe fire or theft or who knows what, but not necessarily those individual discrete parts. So thank you. That's great stuff. So just a real simple
Insurance for Client Injuries
00:13:07
Speaker
one. This is a great question though. Like what if a client slips and they break their wrist? Will insurance cover me? This person wrote. So what happens if there is that injury and they slip and they will insurance cover all the damages that result in that? And I only
00:13:23
Speaker
Pick this one out because the wrist actually can prevent you from working on a computer, can prevent you from driving, can really restrict your ability to earn a living. And if you're self-employed, it can cost you a lot of money. So maybe just talk about that in terms of that injury piece and how insurance can help.
00:13:38
Speaker
Yeah, so that's touching on the bodily injury component of the commercial general liability. So this is what you would often see in an insurance industry, we just call this slip and falls. Very common for most businesses, especially if you're, again, you're renting that space or you're actually hosting clients in a space that you own, a commercial space that you own, very common for any sort of operation where you're responsible for maintaining a property.
00:14:06
Speaker
Um, so that, that slip and fall, like let's say you are liable for that. Um, and there's, there's a lot of costs associated with defending yourself. There's the settlement costs. There's the legal fees. There's the court fees. There's the loss of wages to the, uh, the harmed party in this case. So that would be insured under the bodily injury section of the commercial general liability. Very, very common for most business owners. Yeah, I would imagine so. Cause there's all sorts of opportunity for injury. I mean, I've seen it myself just, uh, I saw somebody once upon a time,
00:14:36
Speaker
totally take a dive in a restaurant because they, I don't know, they tripped on a carpet. And it was bad. I remember thinking how injured they really were. And I thought to myself, wow, I mean, it can happen anywhere anytime and it often does, right? We've all heard of the stories of the people who burn themselves with too hot coffee. And so the injury can happen certainly.
00:14:55
Speaker
Well, these are great questions or great answers. I want to thank you very much.
Ensuring Adequate Coverage and Contractor Insurance
00:14:59
Speaker
And just in closing then, can you just tell us roughly then what sort of questions when they reach out to someone such as yourself, what sort of questions should individuals who are interested in getting insurance and want to explore a little bit more, what kind of questions should they be asking and considerations they should be looking into?
00:15:17
Speaker
I think what the right limit for you is something that you should explore with an insurance professional. What will often come up is you might be compelled to get insurance from a third party that you're working with. So that example where you're renting a chair, they might ask to see a limit of $2 million of
00:15:37
Speaker
commercial general liability insurance and they want to see a certificate produced before you can start working with them. What I've run into quite often is someone's coming to us because they do have a contract that they need to satisfy and they need insurance for that contract and they just said they were very unclear, the third party, not the individual coming for insurance,
00:15:58
Speaker
The third party just says, you need to have insurance. And something that we often start asking is how much. We can make recommendations about that. We're definitely in a position to help you figure out what's the right limit for you. But we want to make sure that we're also satisfying those third parties so you're not purchasing a policy where you have $1 million in commercial general liability insurance and they want to see $2 million. We can always make those changes, but we try to save you time, make you feel very comfortable with your policy, understand what you're covered for,
00:16:28
Speaker
In some cases, it's not just a liability component. You might have equipment or contents, business property that you're using. You want to get coverage on that. We have advisors available to answer all of those questions. I think another component would be based on your revenues, the sort of risk that you face, right? If you're doing a bit of a side hustle, it's not something that you're doing as your main source of income. You're maybe making five, 10 grand, just doing this because you really enjoy it. And you figure you may as well make a bit of money off of it.
00:16:57
Speaker
Maybe your exposure is a little bit limited. You might carry a lower insurance limit, but once you start operating a business that starts pulling in so much larger revenues, that's when you want to start to consider higher liability limits, especially since your exposure is so much higher based on the volume of people that you're dealing with.
00:17:15
Speaker
True, true. And of course your own income as well too. And I would imagine along those lines, it's really important that anybody who is providing spaces to chair renters, independent contractors and operators, that they actually do ask for this insurance. Am I right? I mean, that should be, it sounds to me like from what you're saying.
00:17:32
Speaker
part of the equation, correct? It's becoming much more commonplace that businesses are doing that. Frankly, I'm still surprised to see that there's certain businesses that aren't asking for that because there is an exposure. You're working with someone who's not an employee that you could get roped into a claim and if they don't have coverage in place, you could really be out of pocket if there is a claim. If you get very different.
00:17:56
Speaker
I would imagine so that if you're an owner and you do not explicitly include in your own policy coverage for independent contractors that you may just find yourself completely out of luck. Is that right? Is that unless you actually specify that in your policy?
00:18:12
Speaker
you may not be covered, correct? Exactly. I think often when someone's starting business, insurance is not the first thing that they're thinking about. It's the last thing they're thinking about. It's, you know, unfortunately something a lot of people don't want to deal with or don't even think about. And I mean, that's why I think it's good that we're doing something like this because there was a huge exposure for everyone involved if you don't have coverage in place. And
00:18:38
Speaker
If you're a business owner and you're requiring contractors to carry that or not carry it, it's very likely that they hadn't even considered it. It's not that they don't want to get it. It's not that they don't want to pay for it. It's just that it's not even something that's crossed their mind. So unless that comes up at some point and
00:18:55
Speaker
conversation. If you're renting or you're renting out of space, that's probably something that you want to bring up with all parties involved just to make sure that everyone's protected and no one's getting the short end of the stick if something were to happen.
00:19:11
Speaker
Yeah, it's a good point, Kieran. And we live in such, at least our industry is very much a mixed media, as I like to call it. We have so many different varieties of business models from traditional employer-employee relationships, right up to situations where you've got a combination of or two locations, one's rental, one's not. So yeah, it's really critical that everybody get on the same page.
00:19:34
Speaker
Kieran, just in closing, any final words of encouragement for our people in terms of just staying safe and getting your, you know, proceeding forward in a really responsible way just before we wrap up? I think if you're here and you're watching this, you're already on the right path. You're considering how to protect yourself. You're taking your business seriously. And I think the moment you start thinking like this, you're really going to set yourself up for success. So if you're thinking about insurance, your head's definitely in the right place. And I wish you all the success with your business there.
00:20:03
Speaker
Well, thanks, Karen. It's really wonderful to continue working with you. And of course our members can reach you through the member dashboard area. Thanks again. Right on. Thanks, Greg.