Investing Your Insurance Dollars Wisely
Are you paying too much money for insurance? You might be surprised to find out how many salon owners neglect to review their policy at renewal time. Such practices not only waste money, they also can leave your salon exposed to significant risks. If you haven't given much thought about your insurance coverage lately, you may want to review the list of recommended coverages below to make certain that your salon is adequately protected. As always, we recommend that you secure the services of an insurance agent or legal adviser you can trust before making any changes to your present coverage.
Essential Coverages No Salon Owner Should be Without
Most tanning salon owners agree on the importance of securing appropriate insurance coverage to protect themselves and their business. The following is a list of basic coverages salon owners should consider:
Professional Liability
Professional Liability protects you against accidents or negligent acts that might
arise out of your indoor tanning professional services. For example, if one of your
customers suffers burns from overexposure, professional liability offers protection
against any claims he or she may make.
Product Liability
Product Liability provides protection against claims arising out of the use of the
product. For example, if a customer has an allergic reaction from the use of a tanning
accelerator or lotion and sues you because you sold it to them, this form of insurance
coverage will protect you. (Note that while the responsibility ultimately may rest with
the manufacturer, Product Liability will cover your legal defense costs).
Commercial Business Liability
Commercial Business Liability pays those sums the insured is legally obligated to pay
as damages because of bodily injury, property damage, personal injury, or advertising
injury.
Building Coverage and Business Personal Property
Building Coverage protects you against direct physical loss or damage to covered
buildings from covered causes of loss such as fire and vandalism; Business Personal
Property Coverage protects you against direct physical loss or damage to covered property.
Replacement Cost on Buildings and Personal Property
Replacement Cost on Buildings and Personal Property provides protection against the
cost to repair or replace your property with no deduction for depreciation. For example,
if you suffer a loss due to a covered cause of loss, your insurance company will pay you
the total amount of your loss, up to the limit of your policy. Some policies may have a
coinsurance clause that could restrict replacement cost.
Business Income
Business Income pays for actual loss of business income sustained due to the necessary
suspension of business operations during the period of restoration after a covered loss.
Extra Expense Coverage
Extra Expense Coverage provides compensation for extra expenses incurred as a result
of covered loss.
Computer Equipment
Computer equipment can be covered separately or as part of business personal property.
Replacement cost pays for the replacement cost to reproduce data or programs that are lost
or accidentally erased.
Money and Securities
Money and Securities pays for theft, disappearance or destruction of money and
securities used in your business.
Fire Legal Liability Coverage
Fire Legal Liability Coverage provides coverage when your lease requires you to
provide extra fire insurance on the building where the salon is located. This coverage may
be required in cases where the building you operate in is damaged by a fire you cause.
Note that fire insurance is not always automatically provided on all leases, and that you
may be required to add your landlord as an additional insured on your liability policy.
Employee Dishonesty
Employee Dishonesty provides coverage against employee dishonesty causing the loss of
money and securities from your premises, and the loss of other covered business property
such as computers or office furniture.
Worker's Compensation
Worker's Compensation is a specialized form of liability insurance that protects you
against claims from job- related injuries or illnesses to employees that is required by
law in some states. Employer's liability coverage also may be required in your state and
is normally a part of this insurance coverage.
Choosing the Insurance Company for You
Securing the right insurance coverages is a necessary precaution for reducing your operating risks and protecting your assets. But if you want to get the best insurance protection, you need to do more than just choose the right coverages--you also need to choose the right insurance company. Here are the three most important things you need to know to evaluate an insurance company:
1. The Company's Financial Strength
An insurance company's financial strength reflects its ability to meet its obligations to its policyholders. The easiest way to do this is to check the rating report of an independent insurance industry analyst, such as the A.M. Best Company. You can get up-to-the-minute ratings, reports and insurance news on any particular insurance company by calling A.M. Best's 24-hour voice and fax service by dialing (800) 424-BEST.
2. The Company's Claims Performance
Claims performance is the make-or-break factor that separates a good insurance company from a great one. A responsive company should contact you within 24 hours of receiving your report to begin the settlement process. When evaluating insurance companies, be sure to ask your agent or broker which companies provide the highest level of customer service and satisfaction when handling claims. Choose the one that puts your needs as a policyholder first--both before and after a loss.
3. The Company's Specialized Knowledge of Your Business
In order to protect your assets, an insurance company (and its brokers and agents) must have specialized knowledge of the tanning industry. Some companies have developed specialized coverages for the tanning industry that not only provide superior protection but can actually contribute to lower premiums. Your agent or broker can tell you which companies specialize in salon insurance products and services, as well as which companies offer industry discounts.
Universal Insurance Facilities, Ltd. offers a variety of flexible and affordable coverages for every size salon, including claims-made coverage (both with or without prior acts coverage) and occurrence form professional liability policies. Universal's program is rated A++ (Superior) by A.M. Best Company--that's the highest possible rating from the most respected rating service in the country. To get more information about Universal's specialized tanning salon insurance coverages, please contact Universal Insurance Facilities, Ltd., P.O. Box 40079, Phoenix, AZ 85067-0079, (800) 844-2101, fax (602) 970-6240 or via its Web site at www.vpico.com/universal.
