Salon Insurance Guide (Hair Stylist & Beauty Shop Coverage)
Do you work in a salon or similar setting as a hairdresser, nail technician, cosmetologist or other beauty or wellness professional?
If so, to protect your business, you need salon insurance. This post will serve as your in-depth guide to salon insurance, explaining the different types of coverages you may need, factors that impact costs, and a few options for carriers worth considering. Let’s begin.
Do Salon Workers Need Insurance?
Although salon workers in some jurisdictions do need to be licensed as cosmetologists, we see no indication that insurance is mandated legally except for workers’ compensation for business owners with employees.
Nevertheless, there are two very good reasons to insure your salon or beauty business:
- Protect your business. Many things can go wrong in the course of salon work, and insurance protects you from legal, medical and repair costs you might otherwise be unable to afford.
- Get more work opportunities. This is applicable if you want to rent a booth, since you might only be able to do so if you have the minimum amount of insurance that the salon owner wants you to carry.
Anyone who operates a salon or a related business needs salon insurance. You should get salon insurance if you:
- Own a salon or barber shop.
- Rent a chair in a salon or barber shop (more on that shortly).
- Are a cosmetologist.
- Work as an esthetician.
- Are a nail technician.
- Apply permanent makeup.
- Run a tanning salon.
If you are renting a booth, do not assume you are covered by the salon owner’s insurance policy! The salon owner’s policy covers their business, not yours. You will need to get your own insurance policies to cover your individual business, even though you are operating on their premises.
Types of Business Insurance Policies For Salons
- General liability insurance: What happens if you injure another person or damage their property while you are working? Imagine, for example, that you are curling a client’s hair, they jump suddenly because something nearby startles them, and you burn them. Or maybe you are the one who jumps, and you spill dye on their expensive designer purse and stain it. General liability insurance can help you pay for the damages in cases like these.
- Errors and omissions insurance: If a client sues you for negligence, errors and omissions insurance can come to your rescue. An example might be recommending a product to a customer without realizing they are allergic to an ingredient. They develop a rash, and then sue you. In this situation, you could fall back on this type of coverage.
- Equipment breakdown insurance: Regardless of the type of work you perform in a salon, you use some valuable equipment every day. You can protect that equipment with this type of policy. If it breaks down, you can get a payout to help repair or replace it.
- Commercial property insurance: A general policy that covers business property is called “commercial property insurance.” It can be another good one to have as a salon worker.
- Commercial auto insurance: If you drive a vehicle for work, you can insure it with this type of policy (your personal auto policy will not cover business use).
- Business income insurance: Suppose something happens that completely interrupts your ability to work, like your salon getting flooded. Business income insurance will pay out during the time you are not able to do your job.
- Business owner’s policy (BOP): Let’s say you want to bundle together a general liability policy with commercial property insurance or business income insurance. A BOP lets you do this.
- Crime insurance: A lot of the products you use or sell at a salon have a high price tag, so they may be targeted by thieves. You should consider taking out a crime insurance policy to protect yourself.
- Cyber insurance: If you accept bookings or payments electronically or you keep an electronic file of customer data, you should think about getting cyber insurance. It can protect you if there is a data breach.
- Workers’ compensation: You are required by law to get workers’ compensation to cover lost wages or medical costs for workers who get sick or injured on the job if you have any employees.
How Much Does Salon Insurance Cost?
So you can get a feel for what you might pay for salon insurance, here is what The Hartford says about its policies. Keep in mind that this is only a single example.
“On average, our BOP customers paid $3,135 a year, or about $261 a month.1 For general liability insurance, our customers paid an average of $1,057 a year or about $88 a month.2 Insurance costs vary because insurers look at different factors when determining premiums.”
What are some of those factors? Let’s discuss.
- Your services. The jobs of a hairdresser, manicurist, esthetician, or any other kind of beauty worker are all very different one another. Since every beauty profession carries its own unique risks, the type(s) of work you perform will be a major factor when determining your costs for insurance.
- Your revenue. The amount of money you earn as a beauty professional will also affect your insurance premiums. Businesses that bring in higher revenue tend to be more expensive to insure.
- Your payroll. If you need to get workers’ comp, then your payroll size will be relevant when you apply. The larger your payroll, the more expensive it might be to cover your workers if you need to use your workers’ compensation. For that reason, the cost for the workers’ comp will also be higher.
- The value of what you are insuring. If you are insuring equipment, products, or your vehicle, the more expensive they are, the higher your quotes will be for applicable types of policies.
- Your deductibles. You probably are aware from purchasing personal insurance policies for home, auto and health that higher deductibles can reduce your monthly premiums. If you feel okay with having to pay more out of pocket if something happens, then you might find it worth it to raise your deductibles.
- Your coverage amounts. Similarly, if you do not expect to need your policies to pay out very large amounts, you may be able to purchase lower coverage amounts for less money.
- Your record. Once you have been in the salon business for years without making many or any claims, you may find that you are eligible for lower insurance premiums. So, that is something to think about in a few years. Now, as you are just getting started, your rates may be higher since you have not yet had a chance to prove yourself.
- The types of coverages you buy. Someone just starting out and working on their own as a salon professional might just buy general liability insurance and that is it. But an experienced salon owner with multiple employees and a higher budget might buy general liability insurance, errors and omissions insurance, workers’ comp, equipment breakdown insurance, and more. That person will have higher costs to insure their business, but much more thorough protection.
- Discounts. Along with discounts for going years without claims, some insurance carriers may offer other types of discounts to beauty professionals. The only way to find out what they are is to inquire.
- Underwriting guidelines. Insurance carriers are in the business of assessing risk, and they do so through their own unique proprietary underwriting procedures. That is why quotes between companies differ even when you are looking at the same coverage caps and deductibles.
Where to Get Insurance Coverage For Beauty Salons
Since there are so many different variables that can impact your costs—including underwriting guidelines and discounts—it pays off to shop around for salon insurance. Here are a few recommendations for where you can get insurance as a salon professional.
1. The Hartford
With more than 200 years of working with business owners for their insurance needs, The Hartford has run into just about every situation possible, which means that they have a highly efficient claims department.
Some of the types of coverages available through The Hartford for beauty professionals include:
- General liability insurance
- Business income insurance
- Commercial property insurance
- Business owner’s policy (BOP)
- Workers’ compensation insurance
- Errors and omissions insurance
- Data breach insurance
When you are approved for insurance through The Hartford, you can instantly download your proof of insurance.
biBERK is part of the Berkshire Hathaway insurance group, and is another good choice for salon insurance. They offer the following types of insurance for hair salons:
- Worker’s compensation
- General liability
- Errors and omissions
- Commercial auto
- Umbrella coverage
biBERK says that businesses that go through their company for insurance are able to save up to 20% compared to those that go through a middleman.
Yet another solid option for salon business insurance is Hiscox. You can get the following types of coverages through this company:
- General liability
- Errors and omissions
While they do not offer as large a selection of policies as some competing companies, they provide some other benefits such as flexible payment options and dedicated representatives for claims.
NEXT is a company that focuses on insuring small businesses. They state that you can save even more than biBERK promises—up to 25%.
Some coverages they offer beauty workers include:
- General liability
- Commercial auto
- Workers’ comp
- Errors and omissions
You will be pleased to learn that you can add additional insureds to your policy for free.
Get Salon Insurance Quote Now
With the right types of insurance, you can protect your salon business in case of lawsuits, equipment breakdowns and other hazards. Ultimately, taking out policies will help you save money and keep your business operating smoothly.
If you are ready to insure your business now, we can help you shop for affordable self-employed hairstylist insurance coverage.