Like most retail businesses, it is important to have good business insurance in place to protect the owner, the employees, and the assets of the business.
It’s extremely important to have the business insurance in place prior to opening your salon. A business owner’s policy may be a natural fit for a salon. A business owner’s policy will combine the property and liability coverage described below.
No matter whether a salon, spa, or a combination of services, every business needs to have the proper insurance. Three basic insurance needs any retail business will have is general liability, property insurance and if there are employees, workers' compensation.
In addition, we’ll look at some insurance coverage that a spa or salon should also carry.
First, let’s review general liability insurance. General liability insurance will cover the business in the event a lawsuit is brought for personal or property damages. Say someone falls in the lobby, the general liability insurance would cover any legal fees, court costs, and judgments against the business.
Second, is the property insurance for the business. Generally, property and casualty insurance is combined for the best value. Property insurance will cover losses from damage to the building or its contents. The salon or spa can be in either owned or leased space. Casualty coverage will insure against losses or damage to the business.
Combining the two in a business owner’s policy will often save money instead of buying two separate policies. In addition, other coverages such as loss of income may also be included in the business owner’s policy.
Workers' compensation insures your employees from any on the job injury. This policy will cover medical treatment, rehab, and pay a portion of earnings until the employee returns to work. In return for this type of coverage, in most cases, it prohibits the employee from suing the business. This coverage must be purchased separately.
Two other forms of liability insurance should be considered by the salon owner.
The first is professional liability insurance. If a client sues for damages as a result of work performed or negligence, the general liability policy may not cover this claim.
The second type of additional liability insurance is product liability insurance. If the salon is selling products to clients for home use, this coverage should be seriously considered, even if the products are not manufactured by the business.
Ask your agent if this coverage may be available through a business owner’s policy or should be purchased separately.
Salon owners need to work with a licensed insurance professional to best determine the proper coverage for the business. An insurance professional will walk you through the types of coverage available and how best to develop a complete insurance package.
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