Beauty Salon Insurance Policy Information
Beauty Salon Insurance. Is your salon business protected from liability? Salons are not immune from the potential for liability claims against them.
Beauty shops cut, style, trim, color, and apply permanent wave or straightening solutions to hair. Other services may be offered, such as wig cleaning and styling, massage, nail care, tanning beds, cosmetic consulting, and electrolysis.
Although salons traditionally catered to women, many salons now offer their services also to men and children. Services may be offered on a walk-in basis, by appointment only, or both.
Beauty shops are subject to state regulations to reduce the possible spread of disease. Each beautician, manicurist or other professional must also be licensed. Shops may employ beauticians and other cosmetic services professionals or may rent space to them as independent contractors who provide their own equipment.
The status of the various professionals as an employee or an independent contractor must be determined since it may impact how coverages apply.
In 2009, a Florida beauty salon was sued when they caused third-degree burns to a teenager's head while trying to dye her hair. The teen racked up $85K in medical bills, and then sued the salon for pain and suffering and negligence.
The stylist had not followed the directions on the dye product, so the salon owner was found liable for the damages. If she had liability insurance, it would likely cover the costs. If she didn't, then she's out the money to pay for her mistake.
Beauty salon insurance protects your business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked beauty salon insurance questions:
- What Is Beauty Salon Insurance?
- How Much Does Beauty Salon Insurance Cost?
- Why Do Beauty Salons Need Insurance?
- What Type Of Insurance Do Beauty Salons Need?
- What Are Beauty Salon Risks & Exposures?
- What Does Beauty Salon Insurance Cover & Pay For?
What Is Beauty Salon Insurance?
Beauty salon insurance is a type of insurance that protects beauty salons and their employees from potential financial losses due to accidents, injuries, or damage to property. It typically includes coverage for liability, property damage, and medical expenses.
Some policies also offer additional coverage for things like theft, equipment breakdown, and lost income due to business interruption. Beauty salon insurance is important for protecting the salon's assets and ensuring that the business can continue operating in the event of a covered loss.
How Much Does Beauty Salon Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small beauty salons ranges from $37 to $49 per month based on location, services offered, payroll, sales and experience.
Why Do Beauty Salons Need Insurance?
Beauty salons need insurance for a variety of reasons. First and foremost, insurance protects the salon and its employees from financial loss in the event of an accident or injury on the premises. This could include slips and falls, cuts or burns from equipment, or allergic reactions to products. Without insurance, the salon could be held financially responsible for any damages or medical expenses incurred as a result of these incidents, which could be financially devastating.
Additionally, insurance helps protect the salon from liability in the event of a customer making a claim against the salon for damage to their property or for injuries sustained during a service. For example, if a customer claims that their hair was damaged during a dye job or that they were injured while getting a manicure, the salon could be held responsible for covering any damages or medical expenses. Without beauty salon insurance, the salon would have to pay these costs out of pocket, which could be financially damaging.
Overall, insurance is an essential protection for beauty salons as it helps to ensure that they are financially protected against a variety of potential risks and liabilities. Without insurance, beauty salons could be left vulnerable to financial loss and potentially even face bankruptcy in the event of an accident or injury.
What Type Of Insurance Do Beauty Salons Need?
For most owners of small salons, the business is their primary livelihood - their bread and butter, whether they are just fresh out of beauty school or planning to open up more locations. Having the right salon insurance in place can protect your business and leave you with the peace of mind that a mishap won't destroy your livelihood.
Some types of beauty shop insurance to consider:
- General liability insurance. This type of insurance for salon owners provides financial security if a customer is injured or the customer's property is damaged while on your premises. For instance, if a client falls in your bathroom, general liability insurance pays for her medical costs and any settlement or judgment that is ordered. It also pays the salon owner's legal expense. For all these reasons, it's important that salon owners purchase the maximum amount of beauty salon insurance they can afford.
- Commercial property insurance. Whether you own or rent the building that houses your salon, it is important to insure it. Property insurance covers loss to the building, while business personal insurance covers the building's contents, such as chairs, counters, tanning equipment, and other items.
- Plate glass coverage. For salons with storefronts that have a lot of glass, a separate policy or a rider for plate glass coverage may be necessary if the property/casual policy does not cover damage to it.
- Worker's compensation insurance for salon owners. workers compensation coverage is required for all employees but the owner and protects employees who become injured or ill on the job. It also guards the business against lawsuits.
- Breakdown coverage for equipment. The equipment you use in your salon is expensive. Protect it with equipment breakdown coverage and you can bounce back quickly without financial loss when an important piece goes on the fritz.
- Inland marine insurance. This type of protection is ideal for salons who offer services on the go. For example, salons that cater to people in their homes or who show up for weddings and so forth. This protects you against loss or damage to equipment uses outside the business premises.
You may also need insurance for salon booth renters if you rent space in someone else's salon. Your rent gives you the space to provide your beauty services. Insurance for salon booth renters helps protect yourself as you can be held liable for professional mistakes, bodily injuries, and property damage - just like the salon owner.
Specific Issues for Salon Owners
There are additional considerations for beauty salon owners who rent space to manicurists, hair stylists, and other related professionals.
A general liability policy may not cover the work that they do. Stylists may even face claims over small things, such as bad dye jobs or bad haircuts, or they may face cases like the one described above in which an injury causes a substantial amount of pain and incurs substantial medical bills.
Salon owners who rent space to others can require that their contract workers all carry professional liability insurance. This protects not only the professional but the salon owner as well.
Another special situation arises when a beauty salon sells beauty products. If there is a flaw in the manufacture of these products or an imbalance in a chemical, and this flaw or imbalance causes the customer harm, you can be held liable, at least in part.
Faulty product suits often involve everyone from the manufacturer down to the end seller, so product liability insurance is an essential. This ensures that salon owners don't pay for the mistakes of products' manufacturers.
Nail Salon Insurance
Chemicals and sharp tools used in nail salons make them a breeding ground for lawsuits from injured customers. Nail salon insurance protects businesses from loss when they are sued for damages by a customer. Most nail salon owners need:
- Professional liability insurance. If a worker in a nail salon injures a customer, that customer has a right to sue. An accidental cut can lead to a serious lawsuit, which makes professional liability coverage important.
- Workers compensation. Workers in nail salons often breathe in toxic chemicals daily, affecting their health. Workers compensation can help salon owners protect themselves in the event a claim is lodged against them.
What Are Beauty Salons Risks & Exposures
Premises liability exposure is moderate due to public access to the premises. Aisles must be adequate and free of hair clippings and debris, no frayed or worn spots on carpet, and no cracks or holes in flooring. The number of exits must be sufficient, and be well marked, with backup lighting in case of power failure
Tanning beds, massage, and electrolysis services can result in injury. Tanning services provide a special set of exposures that may need the services of specialty markets as customers may be burned by overexposure to lighting used in the beds. There is unknown loss potential from long-term exposure from the radiation and chances of cancer and related diseases. If professionals are independent contractors, any injuries they incur on premises are part of the premises liability exposure instead of workers compensation.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. Courts may deem the security of visitors in parking areas as the responsibility of the owner or operator of the premises. Factors affecting the risks include exterior lighting, fencing, and any other security measures in place.
Professional liability exposure may be moderate depending on the services offered. The stylists' training, experience, and background are important considerations. Simple wash, cut and set operations have incidental exposures while salons that offer other types of services will have higher exposure. Because of the large number of customers served, a significant, although easily avoided risk, is the transmission of diseases and vermin such as lice.
The absence of simple hygienic practices like hand washing and disinfecting solutions for combs and brushes may indicate a morale hazard. Permanent wave solutions, hair straightening chemicals, and dyes can cause considerable hair and scalp damage. Hazards may increase in the absence of procedures to test for allergies and skin reactions. Full body mud treatments, pedicures, and manicures also increase the professional liability due to the potential for injury to a customer. Understanding the contractual relationship between the shop and the stylists is important as it has an impact on who is covered.
Product liability exposure is moderate if the beauty shop sells shampoo and other items to customers. The exposure increases if any products sold are non-standard, independently produced, or proprietary.
Workers compensation exposure is generally limited to minor cuts, scratches, and puncture wounds from scissors, burns from chemicals, and repetitive motion injuries. Leg and back injuries may result from standing long hours without resting. Working with chemicals can result in irritation to eyes, lungs, and skin. Employees must be fully informed as to the potential effects of any chemicals, including long-term occupational disease hazards so that they can take action as quickly as possible.
Shops with more than one chair may be considered to be multiple sole proprietorships, rather than one business with employees. The contractual relationship between the shop owner and any independent contractors helps determine the workers compensation exposure, although regulatory definitions of employee may supersede the contract terms.
Property exposure consists of a small office and the customer service area. Ignition sources include electrical equipment, heating, and air conditioning. If the beauty shop is in a converted dwelling, wiring should be up to code and adequate for the occupancy. Age and condition of the equipment is important as fires may result from poor wiring, overheating, and poor maintenance.
Poor housekeeping may be a serious fire hazard because hair trimmings are flammable. While most of the chemicals used in the personal applications are not flammable, some may contain alcohol. There should be adequate ventilation to prevent the buildup of vapors which can ignite. Ownership of personal property may need to be addressed. Professional equipment such as scissors and electric clippers is quite costly and is commonly owned by the particular employee or independent contractor.
Crime exposures are generally limited to theft of money by employees and others if large amounts of cash are on hand.
Inland marine exposures are from valuable papers and records for customers' and suppliers' information. If employees provide their own tools, there may be an employees' tools and equipment exposure. If professionals travel to the client's premises to perform services, there may be goods off premises or in transit. There may be a bailees exposure with wigs or other hairpieces, or from storage of customers' goods at all-day events offered by some high-end salons.
Commercial auto exposure is generally limited to hired and non-owned liability.
What Does Beauty Salon Insurance Cover & Pay For?
There are various reasons why beauty salons can be sued. Here are some examples:
Injury to clients: Clients may slip, fall, or get injured during their visit to the salon. They may also suffer burns or cuts during treatments like haircuts, waxing, or chemical treatments.
How insurance helps: General Liability Insurance can help pay for the legal fees and damages in the event that a client is injured at the salon. This insurance covers the cost of bodily injury claims and property damage claims.
Product liability: The beauty salon may be held responsible if a client suffers an allergic reaction or other harm due to the use of a product. For example, a client may experience a rash or other skin irritation after using a particular shampoo or lotion.
How insurance helps: Product Liability Insurance can cover the cost of legal fees and damages if a client files a claim against the salon. This insurance covers the cost of claims related to harm caused by products sold or supplied by the salon.
Employee injuries: Salon employees may suffer injuries while performing their job duties. For example, a stylist may suffer a back injury from standing for long periods, or a nail technician may suffer a hand injury from repetitive motions.
How insurance helps: Workers' Compensation Insurance can help pay for the medical expenses and lost wages of employees who are injured while working at the salon. This insurance covers the cost of claims related to injuries suffered by employees.
Property damage: The salon may be held responsible if a client's property is damaged while on the salon's premises. For example, a client's clothing may be stained or damaged during a hair treatment.
How insurance helps: General Liability Insurance can help pay for the cost of damages to a client's property. This insurance covers the cost of claims related to property damage caused by the salon.
Sexual harassment: A client or employee may file a lawsuit against the salon for sexual harassment or discrimination.
How insurance helps: Employment Practices Liability Insurance can cover the cost of legal fees and damages related to claims of sexual harassment, discrimination, wrongful termination, and other employment-related claims.
Overall, insurance can protect beauty salons from various risks and liabilities that they may face. Having the appropriate insurance coverage can provide peace of mind and financial protection in the event of a lawsuit.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7231 Beauty Shops
- NAICS CODE: 812112 Beauty Salons
- Suggested Workers Compensation Code(s): 9586 Beauty Shop, Barber Shop, or Hair Styling Salon
Description for 7231: Beauty Shops
Division I: Services | Major Group 72: Personal Services | Industry Group 723: Beauty Shops
7231 Beauty Shops: Establishments primarily engaged in furnishing beauty or hairdressing services. This industry also includes combination beauty and barber shops, as well as hairdressing shops serving both male and female clientele. Beauty and cosmetology schools are included in this industry.
- Beauty and barber shops, combined
- Beauty culture schools
- Beauty shops or salons
- Cosmetology schools
- Cosmetology shops or salons
- Facial salons
- Manicure and pedicure salons
- Unisex hairdressers
Beauty Salon Insurance - The Bottom Line
Beauty salons need insurance coverage to protect themselves form expensive claims and lawsuits. For example, if a customer slips on falls in your salon, liability insurance can help pay for your legal fees and claims costs.
Additional Resources For Health & Beauty Insurance
Learn about small business health and beauty insurance coverages that help protect tattoo artists, salons, spas, estheticians, cosmetologists, barbers, hairdressers, nail salons and more from legal liability.
- Barber Hair Dresser
- Beauty Salon
- Day Spa
- Diet Nutrition Services
- Massage Therapy
- Medical Spa
- Nail Salon
- Permanent Cosmetics And Microblading
- Personal Trainer
- Tanning Salon
- Weight Loss Center
The health and beauty industry is a highly regulated sector, with strict rules and guidelines in place to ensure the safety and effectiveness of the products and services being provided. In addition to meeting these regulatory requirements, businesses in this industry also face a number of other risks and potential liabilities. For example, customers may suffer adverse reactions to products, or employees may suffer injuries while providing services. In these cases, the business could be held liable for any resulting damages or losses.
Business insurance can help protect a health and beauty business from these types of risks by providing financial coverage in the event of a claim or lawsuit. For example, a commercial insurance policy may provide coverage for medical expenses or damages that result from a product liability claim. It may also cover legal fees and other costs associated with defending the business against a claim.
In addition to protecting against financial losses, insurance can also help protect the reputation of a health and beauty business. If a business is sued or faces a costly claim, it can damage the business's reputation and negatively impact its bottom line. By having insurance in place, a business can show its customers and clients that it is prepared for any potential risks and is committed to protecting their safety and well-being.
Overall, commercial insurance is an important consideration for any business, but it is especially important in the health and beauty industry due to the unique risks and liabilities that businesses in this sector face. By having the right insurance coverage in place, businesses can protect themselves, their customers, and their employees, and ensure that they are able to operate with confidence and security.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income with Extra Expense, Employee Dishonesty, Valuable Papers and Records, General Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivables, Bailees Customers, Fine Arts, Cyber Liability, Employment-related Practices, Environmental Impairment, Liquor Liability, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.