Esthetician insurance – without it, even a minor slip-up can cause a major flare-up. But with so many different kinds of policies available, it can be confusing trying to work out which ones you actually need.
To help you, we’ve put together a simple guide to estheticians’ insurance. Read on for a run-down of the coverage you need to protect your bank balance, your equipment and your reputation.
What insurance policies do estheticians need?
Whether you run a salon, freelance in a spa or operate a mobile service, there are some policies you shouldn’t be without:
• General liability insurance
• Professional liability insurance
• Workers’ compensation (if you employ anyone)
And others which are good to have:
• Equipment insurance
• Property insurance
• Cyber insurance
• Business interruption insurance
You can bundle some of these policies into one called a business owner’s policy, or BOP, for short. A BOP can save you money – it’s usually cheaper than buying the policies separately. And because it acts as a single policy, it’s easier to manage, too.
We’ll get to BOPs later in this post. First, let’s discuss the different policies estheticians need, and why.
General liability insurance for an esthetics business
When you have customers coming into your salon or you treat them in their homes, you need general liability insurance. It protects your business from the cost of claims for:
• Injury to someone (other than you or an employee)
• Damage to someone’s property
• Personal injury (slander/libel)
Imagine a customer slips off your spa table, or trips over an electrical cord, and needs hospital treatment for their injury? Without estheticians’ general liability insurance you’ll have to pay for their medical bills and legal costs, if they sue.
Or perhaps you spill a skin product on an antique carpet, ruining it? Without general liability insurance you’ll have to pay for its replacement.
Or what if a customer overhears an employee bad-mouthing them and decides to sue? You’ll have to pay for your legal defense and compensation, too, if the case goes against you.
If you have general liability insurance, and someone claims for injury to themselves or their property, your policy can cover medical bills, repairs or replacement costs, legal fees and compensation due. Even if the case is groundless.
Professional liability insurance for estheticians
For licensed estheticians, professional liability insurance (also called errors and omissions insurance, or E&O) is a must-have. That’s because customers can sue you for negligence if they think you made a mistake or did something wrong. Even if there are no grounds for the case.
And without professional liability insurance you’ll have to find the money for legal fees, medical bills and compensation if it’s due.
Of course, you encourage clients to speak up during a treatment if something feels off. But all it takes is one unhappy customer to find yourself facing a suit. It could be an unexpected reaction to a skincare product, a wax gone wrong, or a client who just isn’t happy with the results of your work.
Professional liability insurance for estheticians acts as a protective barrier. Shielding you from the expense and stress of a lawsuit. Even if there are no grounds for a case, it covers claims for:
• Negligence: despite patch-testing, on the day a customer has an allergic reaction to a facial. His skin is so badly irritated he needs medical treatment and loses a lucrative modeling job. Your policy can pay medical bills, legal fees and damages.
• Loss of personal data: you misplace a file containing a client’s sensitive information and they sue you. Your policy can cover the cost of the claim and hire you a defense attorney, too.
Workers’ compensation insurance for estheticians
Most states require you have a workers’ compensation policy in place even if you only have one employee. Penalties can be severe, so it’s best to check your state’s requirements.
But it’s a useful policy to have anyway, because it protects you from the cost of workplace injuries, which can be eye-watering. And let’s face it, the tools of the skincare industry have accident-causing potential. Chemicals can be harmful, wax can burn, and wet floors can cause a slip and fall.
If one of your employees is injured and needs hospital treatment and time off work, a worker’s comp policy can cover their medical bills and lost earnings. What’s more, no matter who’s at fault, workers’ comp insurance protects you from the cost of a lawsuit.
Equipment insurance for estheticians
If you run a mobile esthetics service you’ll want to protect your beauty tools, mobile and laptop when you’re out and about. They’re expensive items to replace, after all. And it’d be tricky to run your business without them.
Business personal property insurance protects your portable equipment from loss, theft or damage. You can add it to your general liability policy. And if you work from home, or freelance in a spa, it covers your moveable items – that’s everything from your treatment table to your potted plants.
Whether you own or rent them, property insurance protects your premises (Landlords often insist you have this policy if you rent.) However, it also covers the contents, from your stock of skincare supplies to items like steamers, lamps and micro-dermabrasion machines.
Imagine a fire starts in the store-room of your spa. It spreads and the sprinklers kick-in, causing water damage on top of the smoke. Property insurance can pay for damage caused to your premises and contents caused by fire, theft or other, covered disasters.
Cyber insurance for esthetics business
Everything from booking appointments and taking payments to storing customer data is done digitally these days. Which is great…until your IT system goes down, taking your website and email with it.
When that happens how do you know who’s booked in and at what time? And when clients do turn up, how will you access their personal records?
Sadly, if your esthetics business is hacked, that’s exactly what could happen. And as a small business, with less cash for tough cyber defenses, you’re a soft target.
Cyber insurance not only provides you with the cash to recover from an attack, it gives you 24/7 technical support to deal with one. So you’re back on your feet doing business again fast. And with the minimum of hassle.
Business interruption insurance
Business interruption insurance protects you from unexpected disruption to your business. Say a fire, or flood, means you have to shut up shop while repairs are carried out. During that time, you’ll be losing income.
To keep the cash coming in you might want to hire equipment and rent somewhere else, temporarily. But that’s going to cost you, too.
If your esthetics business suffers a loss as a result of something unforeseen, a business interruption policy can pay for:
• Lost income
• Moving costs
• Equipment hire
• Renting temporary premises.
Business owner’s policy
Buying all the different policies you need to make sure your esthetics business is properly protected can be expensive. A general liability policy alone starts from around $500 a year.
A business owner’s policy, however, includes general liability insurance and property insurance as standard. You can also customize it by adding other coverage, like equipment breakdown insurance or data loss protection, if you need it.
It’s great small business owners who:
• rent or own their premises
• rely on tools and equipment to do their work
• have customers coming into their premises.
One thing to note: BOPs don’t typically include professional liability insurance. You’ll have to buy that one separately.
Esthetician insurance quotes online
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If you’re still not sure which insurance policies you need, call us at 978.344.4215. We’ll be happy to talk it through with you.