Hair salons of all sizes face unique business risks every day. Salon services involve chemical treatments and hot styling tools. These unique features lead to specific liability issues. So, having complete hair salon insurance is crucial.
Customer injury is just one part of your salon insurance. Employees may suffer workplace injuries from repetitive motions or chemical exposure. Lawsuits, medical bills, repairs, and equipment replacement can be expensive. The right hair, or beauty salon insurance helps protect your business from these unexpected costs.
Your hair salon’s insurance policy, therefore, becomes invaluable. In the sections below, we will look at the most common hair salon insurance types. We'll discuss why they are important for your business. You'll also see what you can expect to pay for good plans.
Customizing Your Salon Insurance Coverage
Hair salon business insurance, like other business insurance, usually combines different policies. This mix depends on your salon's size, the services you provide, and how many stylists and staff you have.
The salon insurance you choose is up to you. It should fit your salon's unique risks. It can be just one policy, or a mix of policies, such as a Business Owners Policy (BOP). Most small salons choose a BOP. It combines multiple coverages in one package.
Salon owners can customize their BOP. You can add extra coverages for things like:
- Chemical treatments
- Special styling
- Protecting equipment
Business Owner Policy (BOP)
A BOP combines general liability, commercial property, and business income insurance into one easy package. It often costs less than buying each policy separately.
This comprehensive coverage is popular among small to medium-sized businesses, including hair salons. While specific inclusions can vary by provider, a standard BOP generally encompasses:
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Property Insurance: This covers damage to the salon's assets. It includes the building (if owned) and items like furniture, equipment, and inventory. It protects against risks like fire, theft, and some natural disasters.
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General Liability Insurance: protects your salon from claims made by others. This includes bodily injury, property damage, or personal injury. These incidents can occur on your premises or due to your operations. If a client falls in the salon, this helps pay for legal fees and settlements.
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Business Interruption Insurance: This helps replace lost income when the salon closes for repairs after a covered event, such as a fire.
Some elements, like workers' compensation and professional liability insurance, usually aren't part of a standard BOP. You might need to buy them separately. Let’s break down individual coverage types below.
Commercial Property
This insurance protects your business property. It covers the salon building (if you own it), salon equipment, and inventory. Events like fire, theft, or natural disasters can cause damage. It effectively ensures that you can repair or replace essential items to continue operations.
Some things commercial property insurance might cover include:
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Building: It protects a salon's structure from damage. This includes risks like fire, windstorms, and vandalism.
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Contents: This protects the salon's equipment, furniture, and inventory. It includes items like hairdryers, styling chairs, and shampoos. It guards against risks such as theft, fire, and natural disasters.
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Glass: This pays for fixing or replacing windows and glass fixtures if they are damaged in covered events.
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Equipment Breakdown: Covers the repairs or replacement of vital salon equipment that fails unexpectedly.
Workers Compensation
If your salon has employees, workers' compensation insurance is typically required by law. It helps employees with work-related injuries or illnesses. It covers medical bills and lost wages.
It may cover the following:
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Medical Expenses: This covers costs for treating work-related injuries or illnesses. It includes doctor visits, hospital stays, medications, and rehabilitation services.
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Lost Wages: Covers part of the income you lose while recovering from a work-related injury or illness that keeps you from working.
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Death Benefits: Provide financial support to families of workers who die from work-related injuries or illnesses.
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Employer's Liability: This protects the salon owner from legal costs if an employee claims injury or illness from work.
Currently, workers' compensation is required in every state except Texas and South Dakota. [1]
Professional Liability
Also called "errors and omissions insurance." This salon insurance policy shields your business from claims related to your professional services. It helps cover related costs.
Some things professional liability insurance can cover for a salon includes:
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Unsatisfactory Services: If a client is unhappy with a haircut or styling service, this can lead to potential legal action.
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Adverse Reactions to Products: If a client experiences a negative reaction to a beauty product, such as an allergic response.
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Advertising Errors: If a promotional claim about a product or service leads to client dissatisfaction or legal claims.
General Liability
This protects you from third-party claims. This includes claims for bodily injury or property damage to your property.
To be more specific:
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Third-Party Bodily Injury: If a client slips on a wet floor and gets hurt, this covers their medical bills and legal costs.
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Third-Party Property Damage: This happens when you accidentally damage a client's items. For example, spilling hair dye on an expensive handbag.
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Personal & Advertising Injury: If your salon uses copyrighted images in its advertising materials.
Product Liability
If your salon sells hair care products, this one's important. It protects you from claims about injuries or damages caused by those products. This insurance helps you cover legal and medical costs.
For instance, it may cover:
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Allergic Reactions: If a client develops a reaction to a shampoo or conditioner purchased from your salon.
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Adverse Health Effects from Treatments: If a client experiences issues like eye irritation or breathing problems after a salon treatment.
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Inaccurate Product Claims: Using products with harmful ingredients, like formaldehyde, can hurt your clients' health.
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Injuries from Defective Equipment: If a client gets hurt because of faulty salon equipment, such as a hair dryer or straightener.
Commercial Auto
You need this only if you or your employees use vehicles for business.
You could use a branded vehicle to serve high-profile clients. You can also offer hair services at weddings, beauty pageants, or other events. If you're in an accident, your auto insurance might deny your claim. If you use your vehicle for business, this can happen.
Commercial auto policies may cover:
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Vehicle repairs
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Damaged equipment
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Potential medical bills for the operator
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Potential medical bills for the other driver
Disability
This gives you income if you or key employees can’t work because of illness or injury. Disability usually includes:
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Income Replacement, which gives part of the lost income.
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Short-Term Disability (STD) for temporary disabilities, like recovery from surgery.
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Long-Term Disability (LTD) for longer periods of disability.
Examples of things covered for hair salon professionals include:
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Repetitive Strain Injuries: Conditions such as carpal tunnel syndrome can affect a stylist's work. These injuries often result from repeated hand movements.
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Accidental Injuries: Accidents, like a fall that breaks an arm, can stop a stylist from working.
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Chronic illnesses**:** Diseases like severe arthritis may impair a professional's ability to work over time.
Booth Renters/Independent Contractor
Booth renters and contractors might need general liability insurance. This covers injuries to others or damage to their property. A salon may ask to be listed as the “Additional Insured” on the policy.
Salon Insurance Costs
The cost of hair and beauty salon insurance can be difficult to pin down. Consider many factors, like the salon's size, location, services, and staff count.
Here's a rough snapshot of typical annual premiums for the most common coverage types:
General Liability
According to some insurance estimates, liability insurance premiums may range from $360 to $2,100 per year.
As of this article, some providers offer coverage starting as low as $15 per month.
Professional Liability
Annual costs may range from $720 to $2,200.
Business Owners Policy (BOP)
A BOP combines general liability and commercial property insurance.
Insurance provider, The Hartford, currently offers a BOP with average annual premiums of around $1,019, or about $85 per month.
Workers' Compensation
These Costs depend on state rules and employee count. They range from $500 to $3,000 per year, based on salon insurance estimates.
Commercial Property
Premiums can range from $500 to $2,500 annually. However, this is heavily influenced by factors like location and property value.
Business Interruption
The cost of business interruption insurance may depend on the length of coverage and the limits you choose. On average, it may cost between 0.5% -2% of your salon’s annual revenue.
Product Liability
Beauty product insurance costs vary based on location, salon size, and coverage limits. However, estimates show it starts at about $89.10 each month after an upfront payment of $279.
What Affects the Cost of Hair Salon Insurance?
There are many things that insurance companies consider regarding policy pricing. Here are the main factors that affect premiums, deductibles, and coverage costs for hair salons.
Location
Urban locations may have higher premiums due to the increased risk of theft, damage, and liability claims. Natural disaster-prone areas face higher premiums to offset potential catastrophic losses.
Salon Size and Revenue
Bigger salons that earn more money face more risks. So, they pay higher premiums. More space and higher business value mean more assets to protect and greater potential liability.
Services Offered
Chemical treatments, such as perms and coloring, raise premiums. This is because they pose a higher injury risk to clients. Additional services, like massages or skin treatments, require specialized coverage and raise costs.
Number of Employees
Each employee represents additional risk, increasing workers' compensation and liability costs. Independent contractors may reduce workers' comp costs but require different coverage structures.
Claims History
Previous claims signal a higher risk to insurers, resulting in premium increases. A clean claims history demonstrates good risk management and can earn significant discounts.
Experience and Qualifications
New salons pay higher premiums due to unproven risk management. Professional certifications and industry recognition can lower rates by demonstrating competence.
Coverage Limits and Deductibles
Higher coverage limits provide better protection but increase premium costs. Higher deductibles lower premiums. However, you'll pay more out-of-pocket when making claims.
Risk Management Practices
Safety protocols and regular staff training can lower premiums. They show that you are actively reducing risks. Security systems and proper maintenance schedules signal lower risk to insurers.
Building Characteristic
Older buildings or those with outdated electrical or plumbing systems face higher premiums. Fire-resistant construction materials and sprinkler systems can reduce property insurance costs.
Equipment Value
Expensive salon chairs, styling stations, and specialized equipment increase property insurance costs. The replacement cost of all equipment impacts total premium calculations.
Retail Product Sales
Selling hair products can lead to liability claims if clients have bad reactions. Higher retail sales volume increases this risk exposure and related premiums.
Your Payment Structure
Annual payments often come with discounts. Monthly installments, on the other hand, include service fees. Bundling multiple policies with the same insurer typically provides 5-15% discounts.
Salon owners can lower their costs in several ways. They can:
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Implement strong safety measures.
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Choose appropriate deductible levels.
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Bundle policies together.
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Keep a clean claims history.
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Regularly review and update their coverage as their business grows.
8 Top Insurers for Hair Salons
Choosing the right provider is key to safeguarding your hair salon from risks. Several insurers specialize in coverage tailored for hair and beauty salons.
Here are a few top options to consider:
The Hartford
The Hartford isn't a salon or beauty-specific insurer, but it shines in the insurance market. Its Business Owners Policies (BOP) are tailored for hair salon operations. They combine general liability and commercial property into one package. This gives salon owners easy protection against common industry risks.
NEXT Insurance
NEXT Insurance offers custom coverage for hair salons. This includes general liability, professional liability, and workers' compensation. Their easy-to-use online platform enables salon owners to quickly get quotes and manage their policies with ease.
Elite Beauty Society
Elite Beauty Society stands out as an insurance provider for beauty professionals. Their comprehensive coverage protects hairstylists and salon owners from the unique risks they face.
Beauty & Bodywork Insurance
Beauty & Bodywork Insurance (BBI) offers insurance policies tailored for beauty and bodywork professionals. BBI's policies are comprehensive and affordable for both individual practitioners and salon owners.
Insurance Canopy
Insurance Canopy provides affordable, comprehensive liability insurance for beauty and wellness professionals. Their policies protect against common issues like client injuries or service dissatisfaction.
Thimble
Thimble offers on-demand insurance plans tailored for beauty professionals. Thimble offers flexible, customizable insurance solutions. It's a great choice for independent stylists and salon owners.
Hiscox
Hiscox offers tailored insurance solutions for small businesses, including hair salons. Their coverage includes general liability, professional liability, and property insurance. They offer convenient online management, and flexible payment plans for hassle-free policy administration.
State Farm
Like The Hartford, State Farm doesn’t specialize in the beauty industry. But they do provide business insurance designed specifically for hair salons.
Hair salon owners should first think about their specific needs when picking an insurance company. Compare options, premiums, and benefits to ensure comprehensive protection.
The right hair salon business insurance policy protects your business, equipment, and employees from unforeseen incidents. Salon owners can tailor their BOP to address their specific needs. Take time to consider exactly what is essential for your particular salon.
Talk to other salon owners for insights. Also, connect with an insurance agent who knows the beauty industry. Compare options to find the most appropriate policy for your business.
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