There’s no doubt that running your own business is very risky. But is the saying true: “Greater risk equals greater rewards”? The day you sign your tenant lease agreement, you open yourself, or your legal entity, to greater exposure. However, with the right business model and staff, owning a business can be extremely lucrative.
In our office, we speak with salons owners all day, and a good portion of the time, I am trying to answer all of their “what if” questions. Sometimes there are easy solutions to give a person peace of mind. While some people might consider insurance “a necessary evil,” smart business owners know that insurance provides peace of mind – which can be priceless.
So ... let’s get into the minds of some salon owners and see what keeps them awake at night.
Q. What if a staff member allows a client to tan for too long? Or someone gets hurt while in the UV equipment?
A. Certified training programs are very helpful for all staff members. This education should help your staff to properly skin-type and know more about the equipment they are operating. UV equipment is considered a medical device and should be used appropriately. When a client comes in to tan, your staff should tell them how long they can use the equipment – and not the other way around.
Even with the best education and experience, operator error can occur, and your customers could suffer injuries from the tanning equipment (or other ancillary services). Burned or injured customers can attempt to hold the salon owner liable by filing a lawsuit. This is where Professional Liability comes into play. Professional Liability can protect the salon against accidents or negligent acts that may arise out of the professional services.
Q. What if I have a fire at the salon? Or the business next to me has a fire that burns down my salon, too?
A. Most tanning salons are tenants in buildings or strip malls. Even though you don’t own the building, you should still insure your property. Most landlords are responsible for the building structure, and the tenants are responsible for the property inside their business. This property is called the “contents,” and may include tenant improvements, depending on what your lease dictates.
Fire is normally considered a covered cause of loss – regardless of where the fire originated. This is a time when insurance comes into play. Make sure that your business insurance policy has adequate limits; review the meaning of coinsurance; and choose a policy that that includes replacement cost.
Keep in mind that a higher deductible might keep your premium down, but you want to make sure that you can afford to pay this amount in the event of a covered cause of loss. Also, Business Interruption coverage could come into play after a fire. Business Interruption (Loss of Income coverage) is designed to help minimize your risk. Check to see if your policy has this coverage and included extra expense which refers to any extraordinary expenses you incur during the period of restoration.
Q. What if a client gets seen undressing?
A. Fortunately, these types of claims don’t happen as often as they did 10 years ago. Many tanning salons now have dividing walls that go from the ceiling to the floor. Previously, partition walls were much shorter, and it was easy for peepers to look over at their tanning neighbor getting undressed. Although the frequency of these claims is down, they do still happen. As the owner, you are accountable for all actions of the salon. The humiliated client can find you at fault for personal injury. Personal injury falls under the Business (General) Liability portion of a policy. Business Liability can provide coverage for bodily injury and property damage that occurs on your premises and can protect your salon in the event of a related lawsuit.
Q. What if an employee’s purse/wallet gets stolen at the salon? What if a client leaves their personal belongings behind and we can’t find them?
A. These two “what ifs” almost go hand in hand. Your employees shouldn’t leave their belongings out. It is their responsibility to keep these items behind the front counter or in an office where they are safe and secure. Your business policy is not meant to cover employees’ personal property.
At the same time, you are not meant to watch after your clients’ property. Their property should never be in your care, custody or control. Add signs at the front desk and in the rooms stating that you aren’t responsible for lost or stolen items. Of course, you never want anything stolen from your employees or your clients, but this is an area where if you aren’t strict, it can put you at risk. Most likely, these types of scenarios are not covered by your insurance.
These are just some of the questions that go through other salon owners’ heads. Some “what ifs” are going to be out of your control, but many of these exposures can be covered if you have the proper insurance and risk-management techniques. To run a safe business, make sure you and your staff are well-trained; the business is kept clean; and all opening and closing procedures are done on a daily basis. Think of it like this: If you were walking into another business, what would you want to see? How would you feel walking into a restaurant that had no insurance, a server who didn’t know the menu, and dirty bathrooms? You would probably never go back.
First impressions are everything in our industry, so keep your clients happy. Happy clients keep on coming back – now that should help you sleep at night.
Jenny Bortman is an account executive for Universal Insurance, which has been serving professionals in the indoor tanning industry since 1993. For a competitive, personalized quote or additional information about Universal’s exclusive Tanning Salon program, call 800.844.2101 or visit www.uitanning.com.
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