Owning a beauty salon is a challenging endeavor for small business owners. You’re tasked with providing style and service to a wide range of individual tastes and you have to manage a spectrum of diverse employee personalities. Finding adequate and affordable business insurance coverage probably seems like just one more herculean task on your plate. However, it’s not something you should ignore.
The business of cultivating beauty is a broad spectrum—providing services and products to clients, staying on top of the latest trends, and keeping staff educated. But without a solid risk management plan that includes sufficient insurance coverage, you won’t be able to sustain your mission to supply your customers with style if an exposure results in excessive costs to you.
We want to help you protect your clients, your assets, and your valued reputation. Making sure you get the right type of coverage with the right insurance company could be the ticket to ensuring that your business stays alive in case of an injury or incident in your salon.
Who Needs Salon Insurance?
A large variety of experts fall into this category, including but not limited to:
- Barber Shop
- Day Spas
- Hair Salons
- Massage Therapists
- Nail Salons
- Tanning Salon
What Insurance Coverage do Beauty Salons Need?
There are a variety of coverages a salon owner should obtain—but these are the most important to protect hair salons:
General Liability Insurance
General Liability Insurance protects you from claims of third-party bodily injury and property damage that can occur at your salon. This is a foundational policy that will help to protect you in case of injury to customers or another claim for damages. Just because you did nothing wrong doesn’t mean you can’t be sued. That’s why you must have a solid general liability policy as part of your business insurance package.
The highly personal aspect of your business—services that involve clients’ hair, and often faces—means that perceived injury or damage can be intensified. A dissatisfied customer may never take it to the level of a lawsuit. But if they do sue, you want to be sure that your salon has a general liability policy in place to assist you in covering the resulting costs.
Example: Unfortunately, life is full of unseen and unplanned events. When you take a client back to shampoo the toner out of their hair, their view is obstructed by the foil hanging in their face. The client slips on the wet floor and crashes into the sink bowl—leading to a concussion. The client sues your salon for the cost of medical expenses. Having general liability insurance will protect your business and help cover the cost associated with the accident.
Commercial Property Insurance
This is important if you own, rent, or lease the building your business is in. In general, your commercial property insurance will cover you from common risks such as fires, natural disasters, accidents, theft, or vandalism that cause significant property damage. Property insurance covers the physical assets of your business, including equipment, tools, lighting fixtures, furniture, inventory, mirrors, and valuable papers and records.
Commercial property insurance sometimes includes ‘Business Income Insurance’ (or Business Interruption Insurance). This policy helps you meet financial obligations like your rent or employee’s payroll if an unforeseen incident stalls your revenue. Business Income Insurance as a component of your business insurance package will help cover your costs in case there’s an interruption.
Example: A tornado blows out your front windows and damages the roof of your building. Until it’s cleaned up and repaired, it’s unsafe for employees or clients to be inside. Property insurance helps cover the cost of repair and/or replacement, and business interruption insurance steps in to cover potential lost profit and wages.
Business Owners Policy
A Business Owner’s Policy, or BOP, is coverage that typically includes commercial property insurance and general liability coverage. Bundling the different policies with your insurance company can result in a more affordable cost for the multiple coverages. Endorsements can also be put in place for business interruption and data breaches—both important considerations, depending on the type of business.
Workers’ Compensation Insurance
If you have employees—versus independent contractors or booth renters—workers’ compensation insurance is a must. It protects your employees in case they become ill or are injured on the job.
Example: One of your hairstylists slips on some spilled hair dye and slices her hand on her scissors. Unfortunately, the injury requires extensive stitches—and means she can’t work for a couple of weeks. Luckily, workers’ compensation covers her medical expenses and lost wages while she can’t work.
Professional Liability Insurance
Professional liability insurance—Also referred to as errors and omissions insurance (E&O Insurance)—protects you and your employees in case of actual or alleged negligence or simple accidents.
Example: One of your estheticians has overheated their wax. Unfortunately, when applying the wax to a client's eyebrows, it causes 2nd and 3rd-degree burns. The client sues the stylist and the salon for pain and suffering, medical expenses, and lost wages while being treated for the burns. Professional liability steps in to help cover the costly mistake.
Other Insurance Coverages to Consider Adding
Other coverages to consider adding to your business insurance package include:
- Umbrella Insurance: Umbrella insurance helps cover the costs that go above and beyond the coverage limits associated with your primary policies.
- Employment Practices Liability Insurance: If you are sued by an employee for sexual harassment, discrimination, or wrongful termination this policy helps cover lawyer fees and settlement expenses.
- Business Income Off-Premises: While sometimes included under property insurance, this endorsement covers your equipment if it is damaged off-site. For example, an employee is styling a bride's hair at her wedding venue and one of her tools gets damaged. Business income off-premises helps cover the cost of replacing the tool.
- Commercial Auto: You or one of your hairstylists are heading to a wedding venue to style a client’s hair. Because you are driving for business, if you get in an accident you need commercial auto to cover damage to a third-party vehicle or bodily injury.
- Product Liability Insurance: If you sell shampoo, hairspray hair styling products, nail polish, etc. product liability insurance is necessary in case a client claims one of your products caused them physical injury.
How Much Does Salon Insurance Cost?
The cost varies depending on each business and the services offered. Some things that can impact the cost an insurance company charges include:
- Services: What services do you offer? Are you solely a hair salon? Or do you need coverage for things like manicures, waxing, brow/eyelash services included in your beauty salon insurance policy?
- Employees: Do you hire employees or independent contractors? Do you rent booth space? Full-time or part-time employees? How many employees? Adjusting your salon insurance coverage accordingly will be important to protect both yourself and your workers in case of injury or loss.
- Property: The building that houses your salon, implements used by employees, and fixtures are all components that need consideration when acquiring beauty salon insurance for your business. What kind of equipment does your salon use? Are you seeking a beauty salon insurance policy that will cover chairs, computers, and other equipment in case of loss? How old is your building? Do you own multiple hair salons?
- Revenue: What is the yearly revenue of the salon?
- Coverage limits and deductibles: If you choose higher policy limits and lower deductibles, the cost for your insurance may be higher.
There are just a few of the things that may be taken into consideration when preparing a quote for your salon business. Talk with a specialist to get a hair salon quote customized to your small business.
Get a Free Salon Insurance Quote
A free and easy quote for your small business is only minutes away. Call us today at 1-877-907-5267 to speak with one of our specialists about your hair salon insurance needs, or complete the form above to start the process to get the right business insurance package for your small business.