A Look At Insurance Overview: Part 1

One of the most challenging tasks associated with owning or managing a profitable tanning salon is securing proper insurance coverage. The multiple liability exposures unique to this industry create an uncommon need for adequate protection.

Following is the first of a two-part series that overviews some important coverages you need to adequately shield your tanning salon.

People who tan irresponsibly can be at risk of injuries including sunburn, premature skin aging, cataracts and other eye and skin diseases. Injuries also can be caused by operator error in underestimating or overestimating the amount of UVB being released during the tanning sessions. Customers who suffer injuries from tanning beds can attempt to hold the salon owner liable by filing a lawsuit.

Professional liability protects the salon against any accidents or negligent acts that may arise out of its professional services. For example, professional liability protects against claims made by customers who may suffer burns due to overexposure.

This coverage protects your property from direct physical loss or damage from covered causes of loss. Look for a policy that includes replacement costs on buildings and business personal property. Most property coverage requires a deductible. Keep in mind that while a higher deductible will help keep your premium down, you want to make sure you can afford to pay the amount in the event of a loss.

Business-income coverage, or loss-of-income insurance, is designed to minimize your risk in the event of a loss. Loss of income refers to the suspension of your operations by direct loss or damage. Extra expense refers to any extraordinary expenses you incur during the period of restoration, which begins with the date of a loss resulting from any covered cause.

Owning and operating a tanning salon comes with plenty of accountability. Even if you operate with the utmost care and provide the best service, a client can find you at fault for a personal loss. Business liability provides coverage for bodily injury and property damage that occurs on your premises and protects your facility in the event of a related lawsuit. It usually will cover damages from the suit as well as legal fees.

Tanning salon insurance, like most commercial policies, does not include flood insurance; and many salon owners don’t realize their standard business policy doesn’t protect them until it’s too late. As a matter of fact, only a small portion of businesses exposed to the risk of flood damage are insured.

Fortunately, it’s easy and inexpensive to protect yourself against flood-related damage through the National Flood Insurance Program (NFIP), which is backed 100 percent by the federal government. The NFIP divides risk areas into three basic groups—low, medium and high. Less than one-third of all reported flood claims come from high-risk areas; more than one-quarter come from low-risk areas. That’s why most business-insurance experts strongly recommend flood insurance, even if you are at low risk. You can obtain good and affordable coverage even if your salon is in the boundaries of a flood plain. It costs an average of just a few hundred dollars per year for businesses in less-hazardous areas, and the NFIP and its write-your-own servicing companies guarantee coverage for anyone in a high-risk area.

In nearly all 50 states, it is required to provide workers’ compensation. However, it’s also sensible to have additional insurance coverage. If you fail to warn employees of any existing danger on your premises, you can be held liable for damage suits brought on by an employee under common and workers’ compensation laws. Therefore, this very important coverage must be considered a mandatory part of your insurance portfolio.