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How much would you pay for a haircut? ITC Maurya paid ₹2 Crore for a really bad one!

How much would you pay for a haircut? ITC Maurya paid ₹2 Crore for a really bad one!

In 2018, a 42-year old woman went to the luxury hotel for a haircut before an important interview. She asked the hairdresser to give her a 4 inch trim from the bottom. The hairdresser asked her to take her glasses off and keep her head down throughout the haircut.

But after it was over, the woman was in for a rude shock: most of her long hair had been chopped off!

As an apology for the negligence, the salon didn’t charge her for the haircut, and also offered a free hair extension and treatment. However, the salon botched that too, damaging her hair and scalp with excess ammonia.

After that, things went downhill for the woman. She was traumatised by the incident and had a severe mental breakdown. As a result, she eventually lost her job. Furthermore, she had aspired to be a model, and had done ads for VLCC and Pantene in the past. Due to the loss of her long tresses, following this dream was no longer possible.

Taking all of this into consideration, in September 2021 the National Consumer Disputes Redressal Commission (NCDRC) asked ITC Maurya to pay ₹2 Crore as compensation to the woman.

ITC had to pay this exorbitant sum because of human error- which to a certain extent is unavoidable. And so, establishments that render professional services should consider getting Professional Indemnity Insurance.

What is Professional Indemnity Insurance?

It is a policy that protects service provider companies or professionals from the financial repercussions of errors that land them in legal troubles. It takes care of:

  1. The legal costs of defending themselves against lawsuits
  2. The compensation that they have to pay to their clients as a result of their error or negligence

These policies work on the basis of the claims made during the policy period. In other words, the financial losses caused due to error or negligence are covered only if the professional misconduct in question happened during the policy period.

Professional Indemnity Insurance can be undertaken by any professional such as doctors, architects, financial consultants, lawyers etc. and the establishments that represent them.

Enjoyed learning about Professional Liability Insurance? Check out Public Liability Insurance next

Further Reading

Learn more:What does Professional Liability Insurance cover?