Containing Insurance Costs

The indoor tanning industry has undergone tremendous changes over the past 30 years, evolving from small salons with a handful of tanning beds to large, beautiful facilities housing 10 or more tanning units and offering ancillary services. Today’s market has a healthy mix of independent salons, larger chains and franchises serving approximately 30 million tanners. The rapid growth of the industry has created a variety of exciting and challenging new issues.

When the tanning industry was young, so were the tanning beds and salons. Any tenant improvements that were done seem basic in comparison to current build-outs. Sunless tanning was not in existence, nor were the many other fabulous ancillary services now being provided. In light of such developments, many of the older salons are remodeling, adding on, moving and growing.

Consider discussing your growth plans with your insurance professional. You can get a premium estimate on the additional cost to insure a remodel of your salon. Let your agent know if you plan on adding square footage, as well as the cost and type of any new equipment and the anticipated increase in your annual gross receipts.

If you are planning on replacing older tanning equipment, your agent will need to adjust your Business Personal Property limit to reflect this. If you are thinking about adding an automatic sunless spray booth, make certain it is properly installed and maintained. Claims are arising in regard to leaking units that can cause considerable property damage to your salon. You will be responsible for the deductible and the claim experience will be reflected on your policy. An incident like water damage also could cause damage to neighboring suites and, therefore, increase your exposure.

Tanning salons now are offering many day spa services including nails, facials, hydrotherapy, body wraps, airbrush tanning and teeth whitening. As you do your research to determine which ones will best suit your existing business and improve your bottom line, make sure to consult your insurance agent. Certain services may not increase your exposure or premium very much and your agent can keep you apprised of what works best with your policy. For example, you might be considering a service such as permanent makeup or laser treatments, which are difficult and costly to insure; information from your agent might make a difference as you determine which route to take with the growth of your business.

Adding more retail items such as swimwear, lotions and jewelry also is common. Once again, you will need to apprise your agent of the inventory worth and percentage of sales from retail operations so that, if a loss occurs, the claim can be handled quickly and judiciously.

If you don’t have a central station alarm, you should consider installing one— particularly if you are adding a new retail section. Ask your insurance professional to make sure that glass coverage is available on your policy in the event of a break-in. Glass breakage is often the easiest method of entry for burglars—and, even though glass is a part of the building, many leases make the tenant responsible.

If your growth plans include adding additional employees, be certain to offer training programs that give them access to a certification program. Consider the need for Employee Dishonesty Coverage. Most policies exclude theft—whether it is money or goods—by employees. If you use independent contractors for spa services, make certain they are licensed and carry their own insurance.

You may be considering a beautiful new exterior sign to draw attention to your salon. Signs can be quite expensive and are vulnerable to vandalism and elements. Make sure your policy appropriately protects your investment.

Growth is an exciting time for any business, but don’t forget the importance of having an insurance agent that specializes in the tanning industry to help you identify the specific coverage and limits of liability you will need to protect your new business assets. 

For more information or to get a quick, no-obligation quote, call (800) 844-2101 or visit www.universalinsuranceltd.com.