Insurance question

[Essexgary]

Hello Everyone.

Just want to say. Love the Forum, Such amazing people and a wealth of information and help at hand...... Which hopefully I can tap into right now.....

We are just finishing off converting our Garage at home into a treatment room. There will be 3 of us working out of this new space and our current summerhouse Studio (which is a summerhouse in the garden). Now, I know I need to notify the council and apply for permit to undertake massage etc as well as home insurance changes. My BIG Question is.... DO we each get insured to undertake our own range of treatments (which will mainly be different from each other) or go for 1 salon insurance covering all 3 of us for our treatments??? Not sure how to go about finding out or even who to call for salon insurance without paying over the odds. Want a decent insurance without it costing the earth.

I thank you all now for any help info or advice that you can offer and give.

Gary x

 

[Essexgary]

Oh.... forgot to say that we will be offering these are prob loads more......

Reiki
Hopi Ear Candling
Reflexology
Massage
Hot/Cold Stone Masssage
AromaMassage
Waxing
Electrolysis
Advance Cosmetic Procedures (Skin Tag Removals Etc)
Nails
Beauty Treatments

 

[AcidPerm]

Each business needs to purchase insurance so if you’re employing staff, you concentrate on cover for the salon and the staff working within it. If the other 2 are self employed based in the salon, they will need to purchase their own insurance cover.
If you have a mortgage, you need to notify your lender too.

 

[Essexgary]

Each business needs to purchase insurance so if you’re employing staff, you concentrate on cover for the salon and the staff working within it. If the other 2 are self employed based in the salon, they will need to purchase their own insurance cover.
If you have a mortgage, you need to notify your lender too.

We are one family....... We all live in the same house and will all draw a wage from the business after expenses etc. The Holding company is a limited company with myself and partner each having 50% stake. But in essence we will all be self employed..... I think. We are currently in process of sorting home insurance out.

In all honesty we are a couple of months away from actually being able to accept any clients as still fair amount to finish with the conversion and kitting out.

 

[AcidPerm]

We are one family....... We all live in the same house and will all draw a wage from the business after expenses etc. The Holding company is a limited company with myself and partner each having 50% stake. But in essence we will all be self employed..... I think. We are currently in process of sorting home insurance out.

It’s sounds quite a complex set up so you should ideally take advice from an accountant as I’m unclear from your post how the third person can be self employed if they’re drawing a wage from the business. But then again, I’m not an accountant!

 

[salonfrog]

say. Love the Forum, Such amazing people and a wealth of information and help at hand.

Absolutely agree!

 

[salonfrog]

It’s sounds quite a complex set up so you should ideally take advice from an accountant as I’m unclear from your post how the third person can be self employed if they’re drawing a wage from the business. But then again, I’m not an accountant!

The structure can work but be very careful with that set up. If you haven’t already, get it checked by your accountant as AcidPerm says. Happy to chat through if you need to.

 

[Essexgary]

Thank you all for your replies. Yes I know we have loads to think about and sort out. employment status is one of many hurdles that need to be overcome. It is on a very long list of things to think about and to do.

Does anyone have any suggestions on who or where I can go for insurance advice first though, still drawing a blank on if it cost effective to get salon insurance or 3 individual policies.....

 

[BannerPenguin]

You can’t really get the insurance advice you need without 100% having the right employment structure.

I hope you got council and mortgage permission before you converted as would hate for them to say you can’t run a business from home after spending all that money.

 

[AcidPerm]

As @BannerPenguin says, you really must sort out the employment structure first.
If you purchase 3 separate policies and a client trips over in the salon and damages her knee badly, which policy will be used to make a claim?
Insurance companies will happily sell you a policy if you tell them you’re self employed, but when it comes to claiming, if they think you’ve not been 100% accurate with the information you provide, you will come unstuck. There’s also the overlap with the house insurance (mortgage?) to consider.

 

[MissNightbreed]

Do you have a local business advice centre that you could speak to? Your local council may have a business department, mine does and it's been very useful. Sounds like you need some professional advice especially in relation to your employment structure. Insurance will be a case of contacting several to find the best deal for you, it may be easier to ring them and ask the questions you need to. Do you need planning permission for your venture from the council? I'm thinking you may need to and it's worth checking. Good luck x

 

[Essexgary]

Do you have a local business advice centre that you could speak to? Your local council may have a business department, mine does and it's been very useful. Sounds like you need some professional advice especially in relation to your employment structure.

Will be looking into this on Monday. Thank you for the pointer.

Do you need planning permission for your venture from the council? I'm thinking you may need to and it's worth checking. Good luck x

No. Having already spoken to the Planning Officer and told them plans of the conversion and what we will be doing there and he was more than happy that we could proceed without planning permission on all counts.

 

[Essexgary]

You can’t really get the insurance advice you need without 100% having the right employment structure.

We looking into all this now. Didnt really think the employment status would be that much of a problem..... Live n Learn.....

I hope you got council and mortgage permission before you converted as would hate for them to say you can’t run a business from home after spending all that money.

Council are all OK with what we are doing. Have already spoken to the Planning Officer. Home Insurance are in the process of being dealt with.

 

[BannerPenguin]

We looking into all this now. Didnt really think the employment status would be that much of a problem..... Live n Learn.....




Council are all OK with what we are doing. Have already spoken to the Planning Officer. Home Insurance are in the process of being dealt with.

that’s great about the council make sure to get it in writing as they have a non-existent memory and will change their minds on a whim.

Mortgage provider? That can be a big problem as they can withdraw your mortgage if they don’t agree so make sure you have it in writing from them too.

 

[FlawlessBeauty]

Please get your planning officer to send you an email confirming that. I got stung that way when i started out. Big headache! Eventually had to get planning permission and all is now sorted. However it specifically says i can be the only person working there with no more than one client at a time.

You will need to speak to your current home insurance too as some don't cover you if you work from home. We had to switch ours. We used an insurance broker.

You will need a treatment license from your council which i think will be for one main person heading the business and 2 employees but don't quote me on that. They usually want to inspect the property the first time. They want to make sure you have smoke alarms, etc.

Insurance will depend on whether you are employed or self employed. Even if you are self employed i would say the owner/s of the property would need insurance covering trips and slips as well as treatment coverage.

 

[TheDuchess]

I wrote as a ex insurance broker. Commercial insurance is not like car insurance where you ring around loads of companies for a quote. There are only a few options. My recommendation is find an insurance provider you feel understands your business and will help you get back on your feet after a fire or save you peace of mind if you have an accident ie choose your insurance the way you expect your clients to choose their beauty salon.

There are some schemes that are frankly iffy to deal with - a good broker will help you out by presenting your case for you and this can make all the difference. It's what I used to do with my clients, I would tell the insurer (honestly) that the concern that they are raising at claim time is something that was considered at policy inception.

My recommendation is that the way you are setting up is that you are one business. You will need a policy as the "landlord" or salon owner to cover all visitors to the premises and all employees and freelance staff working under your direction providing services to your clients. This can also insure equipment, premises, your turnover if you are unable to trade because of a fire or flood and your liability to clients for any injury through negligent treatment.

You will also be liable for VAT on your combined turnover, unless the third person is running a separate business within your premises.

If the third person is truely self employed they will be exposed to some business risks - not just of not earning, but of losing money. You will need a rental agreement setting out the charges for services they receive: rent, heat and light, use of equipment. If they are on commission only, what happens if the earnings are zero? They will need to provide their own tools and products and you should have an agreement over laundry, cleaning, rubbish etc. Are they "nails by Maria" with control over the pricing, availability, products etc? Do clients know that this is a separate business or will they look to you to compensate for any issue? Will the money be separate with separate receipts for services?

If the third person is freelance providing services for clients of the salon, then they will be a "worker" and still eligible for holiday and sickness and pension payments - even if paid commission only and responsible for their own tax and NI. You are also exposed to the risk they may expect employee status and minimum wage etc. Court rulings are very grey in this area so there are no helpful, fixed guidelines. It's all case by case.

So for insurance, you need one business policy for all of you working in the address. The third person will also need their own policy (BABTAC probably best) if they are working elsewhere as freelance/self employed, this policy will also cover them to work in your premises if they are truely self employed offering a business within a business.