Why an ironclad insurance plan is one of the most important things you can do for your salon.

When was the last time you looked at your salon’s insurance policy? Do you know what’s covered and what’s not? The sad truth is that it will likely only be when you need your policy badly—because there’s been an accident, disaster or lawsuit—that you’ll scrutinize it. And, at that point, if you don’t have the right coverage, it will be too late to go back and make changes.

Michelle Pargee, owner of Milica SalonSpa in Langley, B.C., knows first-hand how important a good insurance policy is. This past January a water pipe burst at her salon, and the impact was devastating. “I received a call that the fire department was at the salon and that an alarm had gone off and the salon was flooding,” says Pargee. “When I got there, I saw water flooding out the front door. The firemen were waiting for me to unlock the door so they could get in. As I walked in, I saw that the walls looked like waterfalls. There was approximately four inches of water everywhere, and the back room and spa ceilings were beginning to collapse. I started crying.”

Quebec-based insurance specialist Daniel Pauzé, president of Asserpro Inc., a company that specializes in insurance for esthetic institutes, salons and spas, understands what it’s like to help a client through a disaster. “Our insurance program includes very special protection, and it is very important that we help insurance claim managers understand our program,” says Pauzé. “Last year, one of our clients had his salon completely destroyed by a fire. The incident happened on a Saturday night, when the salon was closed. The next morning (Sunday), I was there with him, to help him understand what was next for him.”

Do…Focus on recovery.

By the time the flooding stopped, 1,000 litres of water had flowed into the salon, causing extensive damage. Luckily, Pargee had the presence of mind to immediately ask the firemen to save the salon computers, which held all the data the salon needed to run. “One of my stylists, Sylvain Bellerose, drove out to hook the salon computers up in my dining room. We transferred the salon phone to my home line,” says Pargee. Even with an insurance policy that covered her for this kind of damage, the insurance process was slow and still ongoing months later. Also, since this was not the first time her business had experienced a flood—the salon flooded in 2009, also because of a burst pipe—she knew she was going to be facing a significant rate increase in the future. Meanwhile, she had to focus on the very challenging present.

Don’t…Be afraid to ask for help.

A nearby business, Champers Salon, had 16 chairs and agreed to rent Pargee half the salon. It wasn’t easy, and the complications were many—phone lines, Internet, how to get debit and credit payments working at two locations, how to check out clients at the temp salon without the computer program there—but Pargee and her staff made it work. “After six weeks, our salon and spa was rebuilt, and we moved back in,” says Pargee. “We’re almost back running as normal, although, it’s still financially tight.”

Do…Review your policy now.

Pargee’s story wouldn’t have had such a happy ending if she didn’t have a solid insurance policy. That’s why you should always closely review any exclusions in your policy, and work with your insurance provider to get the coverage that works for your business. It’s also a good idea to choose an insurance firm which specializes in esthetic, salon, spa and barbershop insurance. Although it is possible for Canadians to buy insurance directly from an insurance company, from an agent who represents only one insurer or from an insurance broker, Pauzé recommends always using an insurance broker when purchasing insurance. “An insurance broker’s foremost duty is to his or her client,” he says. “That means an insurance broker works for you.”

Do…Talk to your insurance adjuster.

Salons, spas and barbershops are usually small businesses, which means they can get a Business Owners Policy (BOP) that includes general, product and professional liability in a standardized package. If you’re not sure what you’re covered for, make an appointment with your insurance adjuster and find out.

Do…Treasure your team.

In the end, no matter how good your insurance policy is, if disaster does befall you, having a team like Pargee did at your side will certainly help. “Through amazing teamwork and great client support and a little creative thinking, we survived,” she says. “And now nothing will stop us.” Her advice to other salon owners facing similar adversity? “All I can say is, never give up,” says Pargee. “No matter how difficult a situation seems there is always a solution. Stay strong. And cherish those who stand by you.”

Checklist: Get Back to Work Faster After a Disaster

1. Go digital. Paper records, files and appointment books don’t fare well in water, wind or fire. Go paperless and you can easily store and replicate information.

2. Back up your information. From client lists to payroll to inventory, store everything on a remote server that backs up automatically and can be accessed remotely from anywhere.

3. Use a laptop. In case of disaster, it’s much easier to transport out of harm’s way than a desktop computer.

4. Be prepared. Know in advance how you plan to communicate with your staff and clients if something happens in the salon.