Huge rises in insurance premiums over the past few years are threatening to cripple the beauty industry, writes Sorcha Crowley

They say time is a lousy beautician. Professional beauty treatments work so much better. But for thousands of Irish beauticians, the battle for insurance is threatening their existence much more than any number of crow's feet.

One salon owner, Oona Doherty, is particularly worried. The liability insurance for her skin-care clinic and beauty salon in Sligo will soon expire, but she hasn't been given another quote yet.

In 2001, she paid about £200, or €254, to insure each of her therapists. Last year, the premium was increased to €447 a therapist. Forty miles away, across the border in Enniskillen, a beauty therapist could be insured for as little as stg£35 (€49) last year or £44.50 (€62) today.

Doherty doesn't know what her premium will be this year but is sure it will rise. A therapist at another salon told her she was recently quoted €1,400 a therapist.

After almost 19 years in the business, during which time she has won several awards and had only one minor claim against her, for £189 (€240) several years ago, Doherty is finding herself cornered by events beyond her control.

Increasing numbers of claims have resulted in rocketing insurance premiums. Almost half the industry is operating without insurance simply because it can't afford cover.

The situation became so bad in March last year that the UK underwriters for an insurance scheme run by the Society of Applied Cosmetology, which represents Irish beauty therapists, decided that enough was enough and pulled out of the Irish market.

The society couldn't renegotiate group cover with another underwriter until this month, such was the extent of Ireland's reputation in the UK underwriting industry for having a claims culture. It now offers insurance only to its members.

The wounds are still smarting from the crisis that followed. "Many people felt badly let down by the society and didn't bother renewing their membership," says one central-Dublin beautician. "I had to pay €25 per month for cover from March to June last year and decided to find my own cover in the end."

Sharon Stanford, the society's manager, says: "It was difficult for anybody last year. The insurance crisis affected the industry as a whole. Liability insurance is regarded as more of a medical insurance now."

Doherty estimates that as many as 70 salons closed last year because they couldn't get cover. Liability insurance, including professional malpractice indemnity, is not compulsory for Irish beauticians, but those who trade without it put themselves at financial risk.

"If you continue to trade without insurance, it's like picking your own pocket, because if something happens, what are you going to pay with?" says Harry Thompson of Kindlon Insurances, a brokerage in Ranelagh, Dublin.

"It's a crime what's happening to the industry. People either can't get insured or can't afford it. Without a doubt, there are between 800 and 1,000 therapists around the country without insurance," he says. Thompson is one of the handful of Irish brokers offering cover to beauticians.

Many beauticians, including Doherty, fear more premium hikes. "The answer to that is yes, they will go up," says Thompson. "There will need to be a bigger premium. They [the insurance companies\] have to be given a reasonable chance of making a profit."

No company could offer The Irish Times a sample quote. All said premiums depend on how long a salon has been in business, how many staff it has and its volume of trade, among other factors.

Why is there such a gap between UK and Irish premiums? "In Ireland, there are approximately 1,800 therapists registered. In the UK, there are thousands more paying premiums," says Thompson.

Many believe the crippling problem of claims has led the Irish industry to its crisis point. Public-liability payouts came to €268.2 million in 2001.

"The cost of claims has gone up. It's a hostile environment for insurers," says Martin Long of the Irish Insurance Federation. "A book of quantum, giving consistency in relation to compensation payments, is awaiting legislation," he says. "If we can introduce these measures, it will stabilise the market."

With alarm bells ringing among US companies here, Mary Harney, the Tánaiste, is keen to increase Ireland's competitiveness, but will she do anything for the beauty therapists?

"The Minister is keen to attract new insurance companies into the Irish market from abroad," says a spokesman for the Department of Enterprise, Trade & Employment. "If we're going to bring about a reduction in premia, it means attracting the big players from Europe."

Ciaran O'Donoghue, an insurance broker with Gunn Robinson O'Higgins, is not sure it's as easy as that. "The big boys laugh at us - we're such a small market, we're so litigious," he says. "London and Switzerland see huge awards for fairly innocuous claims and won't do business here."

One UK insurance broker who won't be tempted south of the border is Laurence Hinge of Cathedral Associates."It is cheaper to get cover in the UK and Ulster because we don't have juries who decide on compensation awards," he says.

For a salon with 10 or 12 therapists and no claims in five years, Hinge quotes a premium of stg£2,000 (€2,800). The same salon could expect to pay up to €7,500 for full cover here, according to industry sources.

Last week, Lisa O'Donnell won €3,500 in damages when she temporarily lost her sight after an eyelash-tinting procedure. Her eyes were itchy, swollen and filled with mucus, and she could not see for several days, the court was told. "The case was pretty cut-and-dried, like a medical-negligence case," says her solicitor, Dermot McNamara. "Certain treatments require testing beforehand, in particular waxing and tinting. We find out what should have been done and then apply that to the case."

McNamara says most cases settle out of court, which means statistics are hard to find. "Most beauticians have a working relationship with their client and problems get resolved that way. It's cheaper for the salons," he says.

With some claims as high as €20,000, the risks of bogus claims are real. One beautician tells of how a client tried to sue for loss of income after reacting to a treatment. When investigations revealed that the claimant had left the country and was working in the US, the case was quickly dropped.

For Esther Murnane - and, perhaps, women in general - the promise of beauty far outweighs the discomfort of some treatments.

At a Dublin salon this week, her right eye started watering and became bloodshot during an eyelash tint, "but the therapist did try to cool it down. She said I must have opened my eyes slightly during the tint", she says. Like many people, Murnane admits she will have it done again.

Meanwhile, the premiums - and the risks for clients and beauticians - climb higher and higher.