Salon Insurance

Salon Insurance: What Professionals Need To Know In 2022

Elena Hudgens
By Elena Hudgens 13 Min Read

Salon owners can purchase hair and beauty salon insurance to get their needed coverage. You must ensure your salon has the right coverage to protect you against costly losses such as customer injuries and lawsuits. Whether cutting hair at home or managing a team of stylists, you must have the right business insurance coverage.

Starting any business comes with tons of hurdles. In beauty salons, a mistake can result in more than a bad hair day. The variety of salon insurance policies available for salon owners can make it challenging to determine what type of coverage you need.

To protect your business, equipment, premises, and reputation, read on for an overview of the different kinds of salon insurance you need and how much insurance costs.

What kinds of insurance does a salon need

A Business Owner Policy, a package of salon insurance policies that business owners require, is an option provided by certain insurance companies. Salon owners should purchase General Liability Insurance, Professional Liability Insurance, Commercial Property Insurance, and Workers’ Compensation Insurance. You should factor these in while determining how much money would be required to start your salon

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General Liability Insurance

The first kind of salon insurance that your salon would need is general liability insurance. It is crucial to have general liability insurance when you have clients visiting your salon daily. It covers the cost of claims for bodily injury, property damage, and personal injury (slander/libel), preventing you from incurring expenses.

For example, imagine a situation wherein one of your employees slips in the water and breaks their ankle. Or maybe you visit a client’s home to provide your services, and you drop nail polish on their expensive rug. In such situations, you will be liable to pay for the damages. 

All salon owners should obtain General Liability Insurance to defend against these kinds of situations. Despite this, as a salon owner, you may have a better alternative than General Liability Insurance. If an insurance company focuses on assisting small businesses, they might provide a Business Owner Policy which includes General Liability Insurance as well. 

Professional liability insurance

Professional liability insurance (also known as mistakes and omissions coverage, or E&O) is another crucial element for beauty salon proprietors. Professional liability insurance is critical since clients may sue you if they think you’ve made an error or misbehaved. Professional liability insurance will cover your legal fees, medical expenses, and settlement if you’re at fault. 

Beauty salons need professional liability salon insurance in cases of: 

  • Emotional stress: A client is burned when a hairdresser leaves a hair dye on too long. The customer, who is unable to work for several weeks due to the burns and the injuries, sues for emotional distress and physical injury. 
  • In case a treatment goes wrong: Your customer has to cancel a modeling job and get medical treatment after suffering a severe rash due to patch-testing. You are sued for loss of earnings and medical expenses. 
  • Personal data: In case you lose a file containing a client’s personal information and the customer is suing for the same. 

It is important to note that a Business Owner Policy still excludes certain claims. Inaccurate client advice and the professional salon services you provide are two examples. That is why you should obtain Professional Liability Insurance in addition.

Commercial Property Insurance 

You may be required to have property insurance whether you own or lease a beauty salon property. Despite that, a beauty salon property policy also covers the contents. If you lease or own a beauty salon, you may have everything from hood dryers to styling tools and massage chairs. 

Property insurance covers building and contents damage inflicted by fire, theft, or other covered catastrophes. Even if a fire begins in the back room, where you keep hair dyes, massage beds, and nail polish, everything will be covered by your salon insurance policy. The sprinklers will activate, resulting in water damage in addition to the smoke. This kind of salon insurance protects your salon from physical threats beyond your control. 

Workers’ Compensation Insurance

Workers’ compensation insurance must cover salon employees. In the event of an injury, would you be able to maintain your business running if one of your hairdressers was injured while styling a client’s hair? 

Your employees are working with hot irons, chemicals, and other hazards. Employees can be seriously injured on the job, resulting in hospitalization. Workers’ Compensation Insurance will cover them if they are injured and lose wages.

This type of salon insurance also protects you from workplace conditions that cause injury or illness. Employers must have Worker’s Compensation Insurance to protect their employees.

Why do you need salon insurance

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The risks and challenges a salon business can face should be familiar to current salon owners and those hoping to be one. You can fulfill your passion by helping your clients feel great, but you still must safeguard your business from accidents, fires, damage, or theft. Getting salon insurance is an important step for your salon business. You must get salon insurance for the following

Claims 

Claims can be difficult to process. Claims involving legal issues are particularly tough to settle down. In addition to compensating you for any monetary damages, these kinds of insurance also supply you with legal help in the event that you are being sued. 

Liability salon insurance protects you from paying for other people’s injuries that you cause. It also ensures you have access to skilled lawyers and solicitors who can handle the claim for you, allowing you to concentrate on operating your business. Legal assistance is provided to you at no cost. 

Reputation

In spite of the fact that it is preferable not to harm your customers or other members of the public, accidents do take place. You could be sued for compensation if you inadvertently injure a person or damage their property. Your liability insurer will handle the situation more efficiently and professionally if the person has their claim settled rapidly. 

Even if a mishap happens, people are typically reassured when it is handled without a lot of fuss. They may even recommend your salon as a result, since mishaps are often resolved without causing too much of a fuss. Thus, salon insurance can help you to maintain your reputation. 

Maintaining clients

Most salons have lots of regular customers. It’s expensive to recruit new clients, particularly in urban or rural areas with competing salons. If you cannot trade due to the sudden occurrence, this is a more serious problem than just losing money on missed revenue.

You might not be able to get back your regular consumers if you are closed for business. They will likely become regulars at another salon rather than yours, and it may be challenging to get them back. Having salon insurance in place to assist you in quickly reopening your salon helps prevent your regular customers from going to other places.

Employer’s liability insurance is one of the varieties of insurance that is required by law, but not all types of salon insurance are. An employee may claim that something you have done or failed to do, resulted in them being injured, resulting in this type of salon insurance covering you. 

You can be heavily fined for not having employer’s liability coverage if you have employees. In addition, you must display an employer’s liability certificate in your salon so your employees can see it, and you may be penalized if you do not.

Best salon insurance providers

The Hartford

The Hartford is the number one salon insurance provider because of its strong financial standing and its capability to provide a wide range of coverages to accommodate home-based businesses. 

The Hartford offers the greatest variety of coverage limits, endorsements, and supplementary coverages. You may obtain general liability coverage ranging from $300,000 to $3 million, or specialty coverage from $250,000 to $2 million. 

Most salons will get workers’ compensation coverage of between $400 to $600 per employee, annually.

CyberPolicy

CyberPolicy is an online salon insurance broker that can get quotes from highly accredited salon insurance companies to offer alternatives to traditional insurers. Despite its moniker, CyberPolicy can handle virtually any salon insurance policy. 

This salon insurance policy includes the basic policies, such as general liability, professional liability, and property insurance, as well as Cyber insurance, Workers’ compensation, Commercial automobile, Crime insurance, and Umbrella insurance. 

Premiums and coverage capabilities will vary if you need specific coverage, operate a small business, and face significant risks due to working as a broker for several insurance companies. The general liability insurance costs $309 to $1,575 per year. 

Hiscox 

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Home-based salons can get affordable salon insurance from Hiscox, a company that handles more difficult-to-place risks and small businesses. You can save up to 10% on your policy by choosing Hiscox, which provides comprehensive coverage for general liability, professional liability, business owner’s policy, and BOP insurance. 

Hiscox is a salon insurance firm that offers business owners professional liability and general liability insurance with $5 million in coverage. However, they don’t provide these types of policies in some states. While Hiscox can’t offer BOPs in Alaska because of liability law, they can write liability BOPs in 19 states and Washington, D.C. 

Regardless, Hiscox delivers reliable liability BOP coverage starting at only $400 per year and $1 million/$2 million in coverage.

Summing up

A salon is a business that offers beauty treatments for clients. Many people consider salons a form of “boutique” that offer fashion, hairstyling, and manicure/pedicure services. However, beauty salons can offer more than just beauty services.

Most states require beauty salons to have liability salon insurance. In the event of any type of accident, you would be covered by your policy. This would protect you from paying for other people’s injuries that you cause. You could also be legally protected if you don’t know about some aspect of your business that could cause harm to a client.

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Posted by Elena Hudgens
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Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.
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