AFCA Determines Home-Based Waxing Salon Is a Business

In this case, the policyholder's wife ran a beauty salon from their residence, offering services such as brows, lashes, and waxing. The salon featured an A-frame sign, a unique logo, an appointment booking app, and active social media pages. Despite these indicators of a commercial enterprise, the policyholder answered "no" to questions about business signage and customer visits when obtaining their home insurance policy.

Following a storm damage claim in January, Suncorp declined coverage, citing the policyholder's failure to disclose the home-based business. The insurer argued that accurate disclosure would have prevented the completion of the online policy purchase.

The policyholder contended that the salon was a hobby, primarily serving family, friends, and neighbours on a barter basis, without an Australian Business Number (ABN). However, AFCA's investigation revealed social media activity dating back to 2022, including customer reviews and posts offering Afterpay facilities. Additionally, the salon had established operating hours and service pricing.

AFCA concluded that the salon's operations, including appointment scheduling, service pricing, property signage, and online presence, demonstrated a clear intent to generate income. Consequently, the salon was classified as a business, and the policyholder's non-disclosure constituted a misrepresentation.

For beauticians operating home-based salons, this ruling underscores the critical importance of full transparency with insurers. Accurate disclosure of business activities ensures appropriate coverage and prevents potential claim denials. Beauticians should:

• Clearly disclose all business operations when applying for insurance.
• Understand the specific requirements and exclusions of their insurance policies.
• Maintain accurate records of all business activities, including client interactions and financial transactions.

By adhering to these practices, beauticians can safeguard their businesses against unforeseen events and ensure compliance with insurance policies.