Why You Should Consider Higher Limits of Liability

Why You Should Consider Higher Limits of Liability

Of all the insurance coverages available for salon owners to protect themselves and their businesses, one of the most essential is liability coverage. Securing adequate liability insurance is of prime importance for salon owners, whose professional services may pose a risk of injury to their customers. In addition to liability arising specifically from the use of tanning equipment, salon owners also may be held accountable for a variety of other kinds of business liabilities such as trips and falls. Such liabilities can arise from any number of business relationships, including those with customers, suppliers, partners and landlords. Liabilities can stem from the actions of employees, non-compliance with governmental regulations, the sale of equipment, maintenance of your premises and even from competing with other businesses. Some sources of liability are unique to the tanning industry, while others are not; nevertheless, it is important for you, as a salon owner, to be aware of these potential loss exposures when setting up and operating your business.

Business Liability vs. Professional Liability

There are two types of liability that all salon owners need to know about: business liability and professional liability. Business liability protects a salon owner against bodily injury lawsuits--for example, a lawsuit claiming that a customer or visitor was injured while on the premises (such as those injuries caused by trips and falls). Business liability also provides protection against property damage claims; personal injury lawsuits involving libel or slander; claims arising from the physical eviction of a person while on the premises and/or claims of false arrest; and claims arising from false advertising.

The second type of liability coverage is professional liability, which protects a salon owner against any accidents or negligent acts that may arise from providing professional services. For example, professional liability protects salon owners from claims made by customers who have suffered burns from overexposure, or who have had a photosensitive reaction to a lotion or gel. But beware: manicurists and beauty salon owners sometimes make the mistake that their professional liability insurance will cover a tanning bed claim--it will not, and if a salon is uninsured, the salon owner's personal assets could be at risk, including a car and a home.

In view of increased litigation and skyrocketing jury awards, many salon owners today are carrying higher limits of coverage. In some states, an injured party can recover only compensatory damages; however, in others states, punitive damages also may be awarded. An injured party may seek compensatory damages to recover out-of-pocket expenses for medical care and medications, lost wages, property damage, pain and suffering, disfigurement and even the loss of the capacity to enjoy life. A business may seek to recover lost profits and out-of-pocket expenses. In the absence of statutes, determining the monetary amount of damages usually is left up to the courts and their juries. In recent years, awards of more than $1 million have not been uncommon. Therefore, a legal liability limit of $1 million no longer can be considered excessive, even for the smallest salon.

The good news is that higher limits of business liability readily are available for tanning salon owners at very reasonable rates. Universal Insurance, for example, can increase a salon owner's business liability limit from the $500,000 standard to $1 million for less than $100 per year on average for single-location salons; and from $1 million to $2 million per year for less than $50 on average.

In addition, Universal can upgrade a salon owner's professional liability limit from $500,000 to $1 million for just a few hundred dollars per year on average. Universal's group purchasing power has put higher limits of liability within the reach of many salon owners who previously were unable to afford the increased coverage. Universal's agents and underwriters are tanning industry specialists, and can advise salon owners about real-life insurance requirements and how the salon's interests can best be served. If you are on a limited budget, Universal's agents can explain how to invest insurance dollars where they will do the most good.

Universal's Tanning Salon Insurance Program is rated A++ (Superior) by A.M. Best and Company--that's the highest possible rating from the most respected rating service in the country. For more information about Universal's specialized tanning salon insurance coverages, please contact Universal Insurance Facilities, Ltd., P.O. Box 40079, Phoenix, AZ 85067-0079 or call (800) 844-2101 or fax to (480) 970-6240. Our e-mail address is located at www.vpico.com/universal.