Cosmetic Store Insurance Policy Information
Cosmetic Store Insurance. Cosmetic stores specialize in the sale of beauty aids, cosmetics, bath soaps and lotions, fragrances, and related items to customers. Some carry women's accessory items such as handbags, hosiery or scarves. Some offer consulting services to help customers select the proper cosmetics and colorings for their skin types.
Others may be part of a beauty salon, providing hair care, tanning booths or beds, manicures and pedicures, massage, electrolysis, and other personal services.
Operating a cosmetic store means you have several business expenses to consider. One of the most important is your cosmetic store insurance policy. You have to make sure you get it right, not only in terms of the insurance provider, but also the optional coverage you add to your policy.
As a store owner, whether you operate a store front, online/cyber, or both, these are a few coverage options you must consider when the time comes to choose your cosmetic store insurance provider and policy terms.
Cosmetic store insurance protects your shop from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked cosmetics store insurance questions:
- What Is Cosmetic Store Insurance?
- How Much Does Cosmetic Store Insurance Cost?
- Why Do Cosmetic Stores Need Insurance?
- What Type Of Insurance Do Cosmetic Stores Need?
- What Does Cosmetic Store Insurance Cover & Pay For?
What Is Cosmetic Store Insurance?
Cosmetic store insurance is a type of insurance coverage specifically designed for businesses that sell cosmetic products. It provides protection against various risks associated with the cosmetic industry, such as product liability, property damage, theft, and business interruption.
The insurance policy may also cover legal expenses, medical expenses, and compensation for loss of income or profits in case of a covered event. This type of insurance is essential for cosmetic store owners to protect their business assets and ensure financial stability in case of unexpected events.
How Much Does Cosmetic Store Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small cosmetic stores ranges from $27 to $59 per month based on location, size, payroll, sales and experience.
Why Do Cosmetic Stores Need Insurance?
Here are the reasons why cosmetic stores need insurance:
Protection against theft or damage to inventory: Cosmetics stores carry expensive and valuable products that are vulnerable to theft and damage. Insurance helps to protect against loss due to theft, fire, or other incidents.
Liability coverage: Cosmetics stores are responsible for the safety and well-being of their customers. If a customer sustains an injury or is affected by a product, the store may be liable for damages. Insurance provides protection against these types of claims.
Coverage for business interruption: If a natural disaster or other event forces the store to close temporarily, insurance can help cover the costs of lost income and expenses during the downtime.
Employee protection: Employee injuries are also a potential liability for cosmetic stores. Insurance can provide coverage for medical expenses and lost wages for employees who are injured on the job.
Brand protection: A damaged reputation can have a significant impact on a cosmetics store's bottom line. Insurance can provide coverage for lawsuits, advertising costs, and other expenses related to restoring the store's reputation.
Overall, cosmetic stores need insurance to protect their assets, minimize their risk, and ensure their financial stability.
What Type Of Insurance Do Cosmetic Stores Need?
To be safe, a cosmetic store should be covered by the following cosmetic store insurance policies:
General Liability - You want more customers coming in and out of your stores and purchasing cosmetics; but, you don't want customers getting hurt when they step foot in your store.
In the event of a slip and fall, injury by defects, or other problems in the store, you are liable as the shop owner to pay for medical bills and expenses; your general liability coverage will protect you from such out of pocket expenses.
It would also shield you from paying repair costs to the customer's belongings (if they were damaged) while they were in your stores or on your property (such as a car getting damaged in the parking lot).
Your cosmetic store insurance policy with general liability coverage will protect you from these very occurrences. Although they are rare, and might never happen in your store, you are better being prepared than having to deal with thousands (or even hundreds of thousands of dollars) of expenses, in the event one of these accidents did occur.
Business Personal Property - Cosmetics are pricey, and the appearance of your stores is important (as customers will make a first impression about your store/product before stepping foot inside).
If weather damage (hail, sleet, snow) occurs, if fixtures are broken in your stores, or if a burglar breaks a window and steals supplies, this coverage option is going to protect your business from such costs you would otherwise be paying out of pocket to repair.
Without this cosmetic store insurance coverage you might otherwise have to shut your doors for a period of time, in order to pay for high repair costs. Storm damage, flooding, stolen merchandise, or even issues with alarm and monitoring equipment are all protected under the business personal property coverage you purchase through your insurer.
Commercial Umbrella - This is also called excess liability coverage when added to your cosmetic store insurance policy. This is for the shop owner who wants the highest level of protection possible, and truly wants to protect themselves from any and everything that can go wrong.
If lawsuits take place, if you have to go to court, if there is major damage or injuries which occur in your shop, you will greatly benefit from this optional coverage for your cosmetic store. This basically will cover any costs which exceed the level of coverage you purchased with your liability protection through your insurance provider(s).
Workers Compensation - Workers comp is required in most states for any non-owner employees. Employees can get hurt on the job. If they do, workers comp will protect you, and pay for medical bills, lost wages, time off, and even pending lawsuits if a former employee (or disgruntled employee) tries to make false claims about an injury.
This is extremely beneficial if an employee has to miss time off work due to an injury, as this optional coverage will pay their wages while they aren't able to work in the shop.
Cyber Liability - In today's online world, more and more shops are selling cosmetics online as well as in stores. With this cosmetic store insurance policy optional coverage, you can protect yourself in the event of cyber crime, theft, breach, or if a hack occurs, and customer credit cards or accounts are hacked into.
Your protection will shield you from personal liability, having to personally repay customers, or possible lawsuits in the event of a cyber crime or attack.
Cosmetic Store's Risks & Exposures
Premises liability exposure comes from slips and falls due to public access to the premises. Aisles must be adequate and free of debris. Floor coverings must be in good condition, no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked.
Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure. All goods should be kept on easily reached shelves so that customers do not pull down items on themselves. If makeovers are offered, employees performing the makeovers must be properly trained and licensed if required by the state.
Questions regarding customer allergies should be obtained prior to offering services. Equipment and supplies used for servicing customers should be sterilized between uses or disposed of to prevent the spread of disease.
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. If the business is open after dark, there should be adequate lighting and appropriate security for the area.
Personal injury exposures are from apprehending and detaining shoplifters. Shoplifting procedures must be fully understood and utilized by all employees.
Products liability exposure is normally low unless there is any direct import of retail products, the sale of "house" brands or re-labeling of products under the establishment's own name. For any of these, the store may have the same liability concerns as a manufacturer. Certificates of insurance should be obtained from vendors.
Workers compensation exposure is from lifting which can cause back injury, hernia, sprains, and strains and from slips and falls. Employees should be trained on proper handling techniques. Skin, eye, and lung irritants may occur from contact with cosmetics or chemical applications used to service customers. In any retail business, hold-ups may occur. Employees should be trained to respond in a prescribed manner.
Property exposures are low since ignition sources are limited to electrical wiring and heating and cooling systems. These should be maintained and meet current codes for the occupancy. Items held as stock may be sensitive to heat, water and smoke, which can lead to a total loss in the event of a fire.
If there are high-value products, theft may be a concern. Appropriate security measures must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Business interruption is a concern since sales may peak at particular times during the year.
Crime exposures are from employee dishonesty and theft of money and securities either from holdup or safe burglary. Background checks should be conducted on all employees handling money. There must be separation of duties between persons handling deposits and disbursements and handling bank reconciliation. Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made throughout the day to prevent a buildup of cash on the premises.
Inland marine exposures are from accounts receivable if the store offers credit, computers to transact sales and monitor inventory, and valuable papers and records due to customers' and vendors' records. Backup copies of all records, including computer records, should be made and stored off premises.
Business auto exposure is generally limited to hired non-owned liability for employees running errands.
What Does Cosmetic Store Insurance Cover & Pay For?
Cosmetic stores, like any other business, can be vulnerable to various risks that may lead to lawsuits. Some common reasons why cosmetic stores may be sued include:
Personal injury: If a customer slips and falls in the store, sustains an injury from a cosmetic product, or is otherwise injured while on the premises, the store may be held liable for damages. For example, if a customer slips on a wet floor and suffers injuries, they may sue the cosmetic store for medical expenses, lost wages, and pain and suffering.
How insurance can help: General liability insurance can provide coverage for personal injury claims. It can help cover the costs of medical expenses, legal fees, and damages awarded to the injured party, up to the policy limits.
Product liability: If a cosmetic product sold in the store causes harm to a customer, such as an allergic reaction, skin irritation, or other adverse effects, the store may be held responsible for selling a defective product. This can result in a product liability lawsuit, where the store may be liable for damages caused by the product.
How insurance can help: Product liability insurance can provide coverage for claims related to defective products. It can help cover legal defense costs, settlements, or judgments awarded to the affected customers.
False advertising: If a cosmetic store makes false or misleading claims about their products, such as exaggerated benefits or false representations, and customers rely on those claims to their detriment, the store may face a lawsuit for false advertising. This can result in financial loss for the affected customers.
How insurance can help: Advertising injury liability coverage, which is typically included in general liability insurance, can provide coverage for claims related to false advertising. It can help cover legal expenses and damages awarded to the aggrieved parties.
Employee-related claims: Cosmetic stores may face lawsuits related to their employees, such as allegations of discrimination, harassment, wrongful termination, or wage and hour violations. These claims can result in costly legal battles and damages.
How insurance can help: Employment practices liability insurance (EPLI) can provide coverage for claims related to employee-related issues. It can help cover legal defense costs, settlements, or judgments awarded to the employees, up to the policy limits.
Property damage: Cosmetic stores may face lawsuits related to property damage, such as damage to neighboring properties or third-party properties caused by the store's operations or negligence.
How insurance can help: Commercial property insurance can provide coverage for property damage claims. It can help cover repair or replacement costs, legal expenses, and damages awarded to the affected parties.
In each of these examples, having appropriate insurance coverage, such as general liability insurance, product liability insurance, advertising injury liability coverage, employment practices liability insurance, and commercial property insurance, can help protect cosmetic stores by providing financial assistance in paying for legal defense costs, settlements, or judgments awarded in lawsuits. It's important for cosmetic stores to carefully review their insurance policies, understand their coverage limits and exclusions, and work with an experienced insurance professional to ensure they have adequate protection against potential risks and lawsuits.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5999 Miscellaneous Retail Stores, Not Elsewhere Classified
- NAICS CODE: 446120 Cosmetics, Beauty Supplies and Perfume Stores
- Suggested Workers Compensation Code(s): 8017 Store - Retail NOC
5999: Miscellaneous Retail Stores, Not Elsewhere Classified
ivision G: Retail Trade | Major Group 59: Miscellaneous Retail | Industry Group 599: Retail Stores, Not Elsewhere Classified
5999 Miscellaneous Retail Stores, Not Elsewhere Classified: Establishments primarily engaged in the retail sale of specialized lines of merchandise, not elsewhere classified, such as artists'supplies; orthopedic and artificial limbs; rubber stamps; pets; religious goods; and monuments and tombstones. This industry also includes establishments primarily engaged in selling a general line of their own or consigned merchandise at retail on an auction basis. Establishments primarily engaged in auctioning tangible personal property of others on a contract or fee basis are classified in Services, Industry 7389.
- Architectural supplies-retail
- Art dealers-retail
- Artificial flowers-retail
- Artists' supply and material stores-retail
- Auction rooms (general merchandise)-retail
- Autograph and philatelist supply stores-retail
- Awning shops-retail
- Baby carriages-retail
- Banner shops-retail
- Cake decorating supplies-retail
- Candle shops-retail
- Coin shops-retail, except mail-order
- Cosmetics stores-retail
- Electric razor shops-retail
- Flag shops-retail
- Gem stones, rough-retail
- Gravestones, finished-retail
- Hearing aids-retail
- Hot tub-retail
- Ice dealers-retail
- Monuments, finished to custom order-retail
- Orthopedic and artificial limb stores-retail
- Pet food stores-retail
- Pet shops-retail
- Picture frames, ready-made-retail
- Police supply stores-retail
- Religious goods stores (other than books)-retail
- Rock and stone specimens-retail
- Rubber stamp stores-retail
- Sales barns-retail
- Stamps, philatelist-retail: except mail-order
- Stones, crystalline: rough-retail
- Swimming pools, home: not installed-retail
- Telephone stores-retail
- Tent shops-retail
- Trophy shops-retail
- Typewriter stores-retail
- Whirlpool baths-retail
Cosmetic Store Insurance - The Bottom Line
As a cosmetic shop owner, you can't ever be too careful, this goes for your stores as well as online sites. For this reason, you need to consider all policy options when choosing an insurance provider for your cosmetic store insurance policy.
These are a few options to add to your premium, to ensure optimal coverage, and to ensure you are fully protected from any possible problems which may occur as a shop owner.
Additional Resources For Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Antique Dealers
- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
- Consignment Stores
- Convenience Store
- Cosmetics Store
- Costume Stores
- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
- Fish Markets
- Flea Markets
- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tire Store
- Tobacco Store
- Toy Store
- Travel Agency
- Trophy Stores
- Tuxedo And Formal Wear Rental Store
- Vending Machine Operators
- Wig Store
- Women's Clothing Stores
- Specialty Retail Stores
The retail industry is a vital sector of the economy, providing goods and services to consumers across the globe. It is also a sector that is constantly evolving, with new technologies and trends emerging on a regular basis.
Despite its importance, the retail industry is not without its risks. Retail businesses face a variety of threats, including theft, damage to property, and liability issues. These risks can have significant financial consequences for retail businesses, which is why commercial insurance is so important.
Insurance can provide retailers with protection against financial loss resulting from unforeseen events. For example, if a retail store is damaged by a natural disaster, insurance can help cover the cost of repairs and help the business get back on its feet. Similarly, if a retail employee is injured on the job, insurance can help cover their medical expenses and any lost wages.
In addition to protecting against financial loss, commercial insurance can also help retail businesses protect their reputation. If a retail business is sued or faces other legal challenges, insurance can provide financial support and legal representation. This can help to protect the business's reputation and maintain customer trust.
Overall, insurance is an essential component of a successful retail business. It helps to safeguard against financial loss and protect against potential legal challenges, which can be especially important for smaller businesses that may not have the resources to absorb these types of losses.
By investing in business insurance, retail businesses can ensure that they are well-equipped to handle the many challenges that come with operating in this dynamic industry.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.