How regulatory changes may bring risks to the spa and beauty industry

While many salon owners get into business because of their passion for all things beauty, they must be wary about the regulations that allow them to operate.

In recent months, the regulatory landscape has drastically changed in the spa and beauty industry.

From superannuation hikes to the minimum wage increase and potential amendments to paid family and domestic violence leave, these changes are designed to better represent salon employees across the sector.

For many across the beauty industry these changes are ultimately a positive step forward. However, they do increase the risk for small business owners, who are now dealing with increased liability and penalties if things get missed.

This is where Management Liability (ML) insurance* can be an important safeguard for small businesses as it protects business owners and the insured company itself from the many exposures relating to the management of a company.

This article will explain these risks in detail and show how small business owners could be protected by a Management Liability (ML) policy.

Know when you’re responsible as a business owner

A recent example of this risk occurred when a Sydney-based cosmetic injectables and skin clinic was penalised close to $30,000 for failing to comply with a notice regarding the back-payment of entitlements to an employee.

The Fair Work Ombudsman also ordered the sole director of the clinic to back pay the worker back in full.

In another case, a beauty therapist in Victoria was awarded $150,000 in damages, with the employer being found vicariously liable for not preventing or adequately addressing the beauty therapist’s sexual harassment by a male co-worker.

Although this case makes for grim reading, it shows that employers can ultimately be responsible for what their employees do in the workplace. 

Basically, the beautician’s employer was partly held responsible for the actions of their employee because it was the employer’s obligation to stop it from happening.

While these are isolated incidents, it shows employers must be vigilant to meet their obligations. There is no guarantee that a technicality won’t land you in an expensive and stressful legal proceeding.

What a Management Liability policy can cover

It’s important for small business owners to consider what safeguards are in place if a claim is made against them.

A Management Liability* policy is designed to cover a variety of situations that could occur when running your business.

These include OH&S issues, unfair dismissal, sexual harassment, and defamation.

ML policies can also be tailored to your business needs depending on the risks you face.

For example, you could get Employment Practices Liability* to cover you from claims made by employees about their employment conditions or breaches of employment laws.

Statutory Liability insurance* is another type of cover within the ML umbrella that could be useful for small business owners in the beauty industry. It is designed to cover the company, senior management, and employees for allegations of wrongful breaches of key legislation during the owner’s business activities.

Generally, ML policies are designed to cover the damages and claimant costs awarded against the insured business, as well as legal, defence and claims investigation costs. It also covers some civil fines and penalties.

How can beauty businesses get Management Liability insurance?

With beauty businesses facing anything from hefty penalties to disqualification, there is a clear need to find an effective way to protect your business. Many will find that it is not worth risking all the work put into opening a business over some regulatory mistakes. 

Fortunately, BizCover has made sorting your Management Liability insurance easy because life can already be dramatic enough! With just a few clicks of a mouse or a phone call, you’ll get multiple competitive quotes. Select your preferred policy, and you’ll be covered instantly.

Visit to get your insurance today – it really is no dramas!  

*  This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

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