As a salon owner, it is common for you to constantly be approached by salespeople wishing to provide you with services or products. Their opening lines usually relate to saving you money, and what business owner would not be in favor of that? However, it’s important that the buyer is always wary of a deal that appears too good to be true; the legal term caveat emptor exists for a reason.
Insurance is no stranger to this concept; unfortunately, it also falls into the category of services for which owners are always trying to reduce costs. It is important to always keep in mind that the tanning industry requires very specific coverage, and it’s not always in your best interest to nickel-and-dime your policy. While an insurance provider might be willing to insure your salon, the policy’s conditions might exclude the exact coverage you need.
The team at Universal is often asked what the benefit is to having a specialty agent rather than a local, general agent. Unless a local agent works with a carrier that understands the unique exposures related to a tanning salon, the policy they can provide might not offer coverage appropriate to your needs. We routinely see “tanning salon” insurance policies – even from some agents who say they specialize in them – that exclude vital coverage.
One such policy we recently saw excludes bodily injury due to health hazards. Health hazards are defined as diseases (i.e. cancer), eye damage, skin aging, etc. And because the policy says the definition of health hazards is not limited to those specifically listed, burns could also be considered excluded. You are operating equipment that is classified by the FDA as a medical device, but have a policy with exclusions relating to use of these devices. With these exclusions, what coverage is the policy actually providing?
Working with a local agent is not, in itself, a bad thing. But this also means you should be proactive in making sure the policy they offer to you meets your needs. You know your business the best. Ask them to show you where in the policy it indicates coverage of tanning unit operation. Ask them to explain all exclusions and how they would affect you in the event of a loss. No one can guarantee that any circumstance that occurs will be covered, however, if there is an exclusion and you are aware of it from the beginning, at the time of loss you will know there is no coverage. For example, if your policy has an exclusion for cancer, you can be sure that if someone claims they got cancer from tanning at your salon, your policy would not respond. Additionally, if the injury is excluded from coverage, it is excluded from defense. This means that you would be responsible for defending a lawsuit brought against you.
Speaking of defense, make sure to check with your agent to see if the policy includes the cost of defense within limits. This means that any payments made to defend you against a claim reduces the amount of coverage you have to actually pay a claim. Because defense is so expensive, it is not difficult to imagine one claim exhausting your entire limit. In addition to defense within limits, some policies may be able to provide defense outside the limit, giving you separate limits for legal defense costs.
When you make a decision on insurance, you are transferring the risk of your business to another company. You should decide on a policy only after you’re satisfied that you will be appropriately covered. If you have questions, contact an agency that specializes in tanning salon insurance – they will be happy to review your unique needs.
Unless a local agent works with a carrier that understands the unique exposures related to a tanning salon, the policy they can provide might not offer coverage appropriate to your needs.