As a therapist or salon owner your expertise is beauty, but you know the importance of having insurance in place to cover you if the unforeseen happens. You need to understand the policy wording to...
As a therapist or salon owner your expertise is beauty, but you know the importance of having insurance in place to cover you if the unforeseen happens.
You need to understand the policy wording to be able to make an informed choice so that you can purchase the correct policy and choose the correct cover for you. However, policy wordings can be a little daunting if you’re not too sure what some of the words mean.
Here are some insurance terms explained to you:
Average – Some policies are subject to ‘average’ which means in the event of a claim if you have underinsured your stock, contents and tenants improvements your claim payment will be reduced by the amount you have underinsured.
Cancellation – Termination of a policy before it is due to expire.
Employers Liability – Insurance for employers in respect of their liability to employees for injury or disease arising out of and in the course of their employment. With some exceptions this insurance is compulsory in the UK.
Endorsement – Documentary evidence of a change to the policy during the 12 months the policy is running.
Excess – The first part of a claim that is “paid” by the policyholder. Rather than physically having to pay this amount, the claim sum paid out by insurers will have this amount deducted instead.
Exclusion – A certain circumstance or a specific type of loss that the insurer will not cover you for.
Indemnity Period – The maximum length of time your business is paid by your insurer. When the maximum indemnity period has been reached, then claim payments will cease. This is in regards to Business Interruption insurance.
Insurance premium tax – A tax that is charged by the Government on insurance premiums, currently 12%
Material fact – A fact which would influence the insurer in deciding whether to accept or decline a risk, how much to charge for the risk and whether or not to impose extra terms and conditions.
Non-disclosure – A failure by the policyholder to disclose a material fact or circumstance which could alter the policy e.g. having previous claims.
Pro rata – The amount that is charged for the remaining term of your policy. At renewal this charge will be for the whole year
Schedule – The part of a policy containing information particular to the risk
Statement of fact – A statement clarifying the basis on which the insurance has been accepted.
Sum insured – The amount of contents, stock and tenants improvements insured and therefore the maximum amount payable in the event of a claim
Tenants’ improvements – Improvements made by a tenant to a leased premises. Generally, these cannot be removed without damaging the premises e.g. flooring
Wear & tear – This is the amount deducted from claims payments to allow for any depreciation in the property.