Beauty salon insurance. Without it, a slip up in the salon could end up being more than just a bad hair day. But, with so many types of insurance policies available for beauty salon owners, it can be confusing trying to work out what coverage you need.
To help keep those frown-lines at bay, we’ve put together a simple guide to beauty salon insurance. Read on for a run-down on the coverage you need to protect your business, your premises, your equipment and your reputation.
What insurance policies do beauty salons need?
Whether you own a hair salon, nail salon, beauty salon, or spa, the following policies are essential:
Other policies which are good to have include:
You can bundle most of these policies together into what’s called a business owner’s policy, or BOP. A BOP will save you money — it usually works out cheaper than buying all the different policies separately. And because it acts as one policy, rather than several, it’s easier to manage, too.
You’ll find more about BOP later in this post. First, let’s dig down into the detail on each of the insurance policies beauty salon owners need, and why.
General liability insurance for beauty salons
When you have customers coming into your salon every day, general liability insurance is a must-have. It protects your business from the cost of claims for:
• Bodily injury
• Property damage
• Personal injury (slander/libel)
Imagine a customer slips in a puddle of water by the shampoo station and breaks an ankle? Without beauty salon general liability insurance, you’ll have to pay for medical bills and legal costs, if they sue.
Or perhaps one of your nail technicians accidentally spills polish on a customer’s designer handbag? Without general liability insurance you’ll have to pay for its replacement.
And what if one of your employees is overheard bad-mouthing a tricky customer and it gets back to him? You could be sued for personal injury. Without insurance you’ll have to pay legal fees and compensation, too, if the case doesn’t go your way.
If you have general liability insurance and someone makes a claim for injury to themselves or their property, your policy can cover their medical bills and your legal costs. It can pay compensation due, too, if it turns out you’re liable.
Professional liability insurance for beauty salons
For beauty salon owners, professional liability insurance (also known as errors and omissions insurance, or E&O) is another must-have.
That’s because clients can sue you if they think you made a mistake, or did something wrong. And without professional liability insurance, you’ll have to pay legal costs, medical bills and compensation, if you’re at fault.
Even if a case has no grounds, professional liability insurance for beauty salons covers the cost of claims for:
• Emotional distress: A hair colorist accidentally leaves a dye on too long, burning a client’s scalp. Unable to work for several weeks, the customer sues for emotional distress, bodily injury from the burns and lost wages.
• A treatment gone wrong: Despite patch-testing, a facial causes a severe rash and your customer has to cancel a modeling job and get medical treatment. She sues you for loss of earnings and medical bills.
• Loss of personal data: a customer sues you for losing a file containing their personal and sensitive information.
Workers’ compensation insurance for beauty salons
In most states, you’re required to have workers’ compensation insurance even if you only have one employee. It’s a good policy to have anyway, as it protects your business from the cost of workplace injury claims.
And let’s face it, the tools of the beauty trade have accident-causing potential. A hot styling tool could scorch, a chemical could burn, or a wet floor could cause an employee to slip and fall.
If an employee gets hurt while they’re working in your salon, needs hospital treatment, and can’t work, a workers’ comp policy can cover their medical bills and lost wages. It also protects your business from a workplace injury lawsuit, whoever’s at fault.
Property insurance for beauty salons
Property insurance protects the premises you operate from, whether you own it, or rent it. (If you rent it, your landlord may insist you have property insurance.) However, a beauty salon property policy also covers the contents. That’s everything from hood dryers and reclining chairs to styling tools and massage beds.
Imagine a fire starts in the back room where you store hair dyes, essential oils, nail polish and other flammable liquids? It spreads and the sprinklers kick in, causing water damage on top of the smoke.
Property insurance can take care of building and contents damage caused by fire, theft, or other, covered disasters.
Without it, you’d have to pay out of your own pocket for a complete make-over. And fire damage repair is expensive: the national average is $12,600. But the repair costs can come in anywhere between $3,200- $27,000, depending on the extent of the damage.
Business interruption insurance for beauty salons
Business interruption insurance protects you if something unexpected happens which means you can’t run your business. It could be a fire or flood. And if you have to shut up shop, or open up elsewhere, while repairs are done, the cost to your business won’t be pretty.
If your business suffers a loss as a result of something unforeseen, a business interruption policy can pay for:
• lost income
• moving costs
• equipment hire costs
• extra rent if you have to move to temporary premises.
Cyber insurance for beauty salons
Nowadays, everything from booking appointments , to taking payments and storing your clients’ data can be done digitally. And that’s great… Until your IT system goes down, taking your website with it.
If that happens, you’ll have no idea who’s booked in for when. And when clients do turn up, how will you access their personal files?
Unfortunately, if your beauty business is hit by hackers, that’s exactly what could happen. And as a small business, with less cash to spare on tough cyber security, your salon’s an easy target.
The trouble is, it’s not the cyber-attack itself that’ll cripple your business. It’s the recovery costs.
Cyber insurance can take care of these for you, including the cost of investigating the incident, restoring your website and systems, PR to restore your good name and pay regulatory fines, if necessary.
It can also pay for the cost of a class action. Which is handy, if all your clients decide to sue you for losing their personal data.
Equipment breakdown insurance for beauty salons
Salon stations don’t come cheap. If a salon chair falls apart, or a dryer stops working, you’ll have to use a different styling station. You may have to put off customers. Or even shut up shop while you get the repairs done.
Equipment breakdown insurance covers repairs to your salon equipment. And if they can’t be fixed, it can pay for their replacement. It means you won’t lose business if your beauty equipment goes wrong.
Employment practices liability insurance for beauty salons
Employment law is tricky. And it changes all the time. When you’re running a busy salon, with several staff members, it can be hard to keep up to date. All it takes is for one of your employees to claim they’ve been mistreated, harassed, or overlooked, and you could have a lawsuit on your hands.
Employment practices liability insurance (EPLI, for short) protects you from the cost of employee-related claims. Including legal fees and compensation, if it’s payable.
Business owner’s policy for beauty salons
As a small business owner, buying all the different policies you need to make sure your beauty salon is properly protected can be expensive. A general liability policy, for example, typically costs from around $500 a year.
A business owner’s policy (or BOP) on the other hand, starts from around $250 annually. But the beauty of a BOP is, not only does it include general liability insurance as standard, you also get several other business policies as part of the package.
A standard BOP includes the following insurance:
• General liability
• Property (buildings and contents)
• Business interruption
• Equipment breakdown
• Employment practices liability.
But you can also add other policies to your BOP, if you need them. Or take them out, if you don’t.
Other policies you can add to your business owner’s policy include:
• Employee benefits liability
• Property away from premises
• Liquor liability.
A business owner’s policy is designed specifically for start-ups and small businesses. If you’ve recently started up a beauty salon, or you have up to 20 employees and your business income is less than $1 million a year, you qualify for one.
Beauty salon insurance quotes online
Still not sure what insurance you need for your salon? Call us at 978.344.4215 and we’ll talk it through.
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