When people think of the beauty industry, they think about glitz and glam. But there is so much more in this diverse industry. Beauticians dedicate their careers to make people feel good about their looks and appearances. Should you not do the same for your beauty business?
Whether you are working in your salon or visiting a customer’s house to give them a service, you and your employees might be exposed to various risks. So, before you give your client a gorgeous haircut, get yourself beauty insurance.
What is beauty insurance?
Beauty insurance covers your business and the employees during their work. It includes aspects of liability insurance related to treatments that you provide. It also covers your equipment like UV lamps, dryers, creams, oils, and other elements of your business.
Why is beauty insurance necessary?
When you have beauty insurance, you can stop worrying about the “what-ifs” and entirely focus on your work. Moreover, without beauty coverage, there is a high chance of losing your hard-earned business, reputation, and earnings.
Our society is litigious, and it only takes a single lawsuit to bankrupt you. A study by Franchising reveals that in the beauty industry, the average claim is $5,500. And, if it were not for insurance, the entire cost would have to come out of your pocket. Insurance coverage allows you to be free from emotional stress regarding the claim payment.
The insurance policy can protect you and your beauty business from unpredictable and unavoidable accidents.
Dailymail reported news of a Florida beauty salon got sued in 2009 for third-degree burns while dyeing a teenager’s hair. The teenager’s family spent $85k for her treatment and then sued the salon for the negligence and suffering caused. If the salon’s hairdresser insurance had liability insurance, the cost would be covered. If not, the employee would have to pay from her pockets. Hence, business insurance policy is essential for financial protection.
Who needs beauty insurance?
- Hairstylists: Many things can go wrong in a hair salon. A Hairstylist insurance can save you the stress and get you peace of mind knowing that your insurance can pay for any potential mishaps.
- Esthetician: An esthetician faces various risks in their workplace. These risks include allergic reactions, damage to property, etc. So, an esthetician should opt for esthetician insurance.
- Masseuse: A masseuse should insure their business with massage insurance. Like other business owners, massage therapists face the same risks as injured employees and, property damage.
- Nail tech: The occurrences of risks are high in a nail salon, as nail technician works with chemicals and UV lamps on their work. So, it would be best if you chose nail salon insurance to avoid any financial burdens.
- Barber: As a barber, you work closely with scissors, chemical treatments, curling irons, and hot wax. All of these tools have the potential to injure a client. Hence, if this happens, get barber shop insurance to pay the claim.
CNN reported that the most typical injuries came from nail care products (28.3%), followed by hair care products (27%), skincare products (25%). However, every other profession in this industry is subject to accidents, so beauty insurance is highly recommended to everyone.
What policies fall under beauty insurance?
Professional liability insurance:
Professional liability insurance also known as errors and omissions insurance protects any businesses that provide service or advice to clients. This insurance protects you and your business when a service or advice that you provided caused financial harm to a client. It covers:
- Work mistakes: Sometimes, a simple mistake can cause your clients to lose money.
- Undelivered services: When you fail to deliver a service to your client within the agreed date, it might impact the client financially. In case the client sues for such incidents, professional liability insurance will cover for it.
- Accusations of negligence: Your business could face a professional liability lawsuit if a client accuses you of neglect. Therefore, having professional liability insurance is highly recommended for beauty business.
For instance, if a client comes to your hair salon for a hairdo for her acting job, she trusts you to make her look suitable for her audition later. However, if she fails to land the role, she might blame the hairstyle and sue you for the loss in income. Hence, if your hair salon insurance has professional liability insurance, it will cover litigation expenses.
Product liability insurance:
Product liability insurance protects businesses from financial and legal risks when the quality of the goods and services that they use is faulty. The product liability insurance claim arises due to:
- Faulty production of product
- Defective product design
- Defective instructions, warnings of the product
There are many products like facial creams, hair products used in the beauty industry. If your salon liability insurance includes product liability, it will protect you if a client suffers from an allergic reaction from your products. Therefore, you should include product liability coverage in your beauty insurance.
Inland marine insurance:
The inland marine insurance covers the loss of any property that is transportable or is involved in transferring data. There are different types of inland marine insurance:
- Bailee’s customer coverage: In the case of hairstylist insurance, wigs and other hairpieces might use bailees coverage.
- Employees’ tools and machinery exposure: If you have barber insurance, you could add employees’ tools and machinery exposure when employees use their tools.
- Goods off-premises: When you have a makeup artist insurance and an employee travels to a client’s house to perform any services.
Workers compensation insurance:
Workers compensation insurance covers any lost wages or medical expenses for employees who, become sick or injured on the job. With the help of workers compensation, employers have the assurance that the employees won’t sue them, while employees get benefits and medical care.
The New York Post revealed that about 80% of the salons in the United States employ at least 5 employees. The law mandates any business to take workers compensation insurance for company having more than 2 employees. Furthermore, these employees face many to many risks in the beauty industry.
They might suffer from:
- Burns due to use of chemicals,
- Leg and back injuries due to long hours,
- Puncture wounds, etc.
According to the Independent, the two-fifths of injuries involved workers cutting themselves, fifth reported sprains, and a tenth suffered a broken bone. Thus, make sure your certificate of insurance includes workers compensation.
Business owners policy (BOP):
Business owners policy incorporates commercial property, general liability, and business interruption insurance into one pack. It is highly recommended for small businesses like beauty salon, nail salon, barbershop, etc. A business owner policy enables you to cover your businesses from the following claims:
- Fire, theft, or other covered disasters.
- Bodily Injury
- Property Damage
Above all, BOP is a bundle of comprehensive and affordable policies to protect your beauty business.
Commercial property insurance:
Commercial property insurance covers the business’ property and physical location against unpredictable circumstances such as:
- Natural disasters
Moreover, it provides payment to repair and replace any tangible assets that were damaged.
For instance, most products in a tanning salon, such as hair trimmings, chemicals, products containing alcohol, are highly flammable. Poor housekeeping might cause a severe fire hazard. USFA claims that the average cost of fire damage is $45,110. Thus, it is wise to include commercial property insurance in your beauty insurance policy to cover any property related loss.
Commercial general liability:
General liability insurance covers claim against different damages caused by the business’ operations, products that happen on the business’ premises.
These damages include:
- Personal injury: When your employee talks about their client badly on social media and the said client finds out about it, they could sue for defamation. CGL protects against third-party claims of slander and defamation.
- Bodily injuries: Any medical expense that your company has to bear due to an injury caused by your business.
According to a report by NCBI, children under two years of age are most frequently injured in the beauty industry. CGL covers such medical expenses.
- Property damages: Usually, employees can get booked to work on event. In such cases, if an employee damages the client’s property, CGL covers the subsequent claim.
Usually, BOP insurance incorporates this insurance. However, if you haven’t got the BOP insurance, you could get CGL as a standalone policy.
What are the exclusions in beauty insurance?
Along with coverages for your business, there are many exclusions that may need your attention. Many times, business owners are not sure which insurance to choose.
- Occurrence Form and Claims-Made: The main difference between the two is related to what triggers the coverage, or the main incident that begins the coverage. An occurrence policy is activated when damage occurs while the policy is still in effect. On the other hand, the claims-made policy is triggered when someone files a claim during the policy period.
- Aqua therapy: Aqua therapy is a set of activities performed underwater. It provides relief to patients with neurologic and musculoskeletal conditions. Although this method of pain treatment has been used in the beauty industry for thousands of years, beauty insurance does not cover it.
- Cryotherapy: Cryotherapy has become one of the most inquired services in the spa industry. Cryotherapy is a pain treatment in which freezing temperatures deaden the irritated nerve. Dermatologists use this to treat abnormal skin cells. Nonetheless, spa insurance does not cover cryotherapy.
- Microblading: Microblading is the latest trend in the beauty industry. This technique uses tiny needles to draw an ink-based eyebrow. Most barbershops provide this service. However, barbershop insurance does not cover microblading.
How Much Does Beauty Insurance Cost?
Beauty insurance is not a one-size-fits-all. The cost of beauty insurance is dependent on several factors: