Today, running a business requires more care and more attention to detail. Over 10 years ago when we first insured hairdressing businesses, average stock was $3,000 to $5,000 and business assets $20,000. In 2005, the average stock is $40,000 to $50,000 and business assets as high as $250,000 including sophisticated fit-outs.

Compliance regulations have changed considerably. Association membership is a tool for compliance to industry regulations. Risk management must include comprehensive insurance cover. At association meetings, I mention to Salon owners that some policies should not stand-alone. In other words, Professional Indemnity has to go with Statutory Liability. Statutory liability covers you for any breach of any Act of New Zealand Parliament in force at the time of claim. Professional Indemnity covers any act of negligence. In the event of a claim, the insurance company will ask for proof of both policies. It is vital that you inform your insurer immediately you suspect a claim may arise. Even if the claim does not occur for another year, the fact that you have notified the possibility of a complaint ensures that you are covered.

Business Interruption, (loss of profits insurance) is one of the essential insurances, but without a claim against your assets there is no cover for loss. There are exceptions. For example, there is an automatic insurance extension if there is prevention of access, failure of utilities, closure of transport routes, ports, airports or suppliers premises are damaged. If you are a new business and have no history of turnover or profit, you can always insure your increased cost of working when a disaster or unexpected accident occurs. Business Assets can be claimed for without any other policy. This also applies to Public Liability.

Business Accident and Sickness is a wonderful insurance. The Insurance Brokers Limited developed this unique benefits cover some 8 years ago. Some of the advantages for the association members are - there is no tax to pay on claiming, no proof of income is required, there is only seven days excess for sickness and it tops up ACC without proof of pay out from ACC.

Employer's Liability indemnifies you, the employer, against legal liability for damages arising from your employee sustaining accidental death or accidental bodily injury in connection with your business. This includes sickness, disease, disability, shock, fright, mental anguish (including stress, depression) or mental injury. Click here for an example pre-employment medical questionnaire, which can be given to any applicant who you interview for a position in your salon. Once you have employed someone it is too late to question the new employee about a pre-existing medical condition.