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The Ultimate Guide to Salon Insurance​

If you own a salon and need to buy insurance, there are many types of insurance for salons and even more insurance companies who sell salon insurance online. Whether you own a hair salon, a beauty salon, a nail salon, a barbershop, or perhaps you provide a number of these services under the same roof, we will help you find the best salon insurance to buy, and which caters for all the risks and liabilities your business could potentially face.

Quick References

What Types of Insurance Does a Salon Need to Buy?

Regardless of the services you provide or the products you sell, there is a pre-set range of salon insurance policies to buy. Their core insurances will provide you with a foundational level of coverage, and the additional insurance options or add-ons can help extend or tailor a standard salon insurance policy to meet your specific individual needs.

In this section, we list all the types of insurance for salon owners for consideration, with a brief explanation of what each one is, and the protection it offers your salon, your customers, and your staff.

Salon Business Owner Policy

A BOP for a salon will usually combine 2-3 types of insurance, such as general liability coverage, commercial property insurance, and business income insurance. It can help keep the cost of buying insurance for a salon low as salon insurance companies will usually offer a BOP at a lower cost when compared to buying the individual policies in their own right.

Here is a quick summary of the different types of coverage offered in a salon owner's business insurance policy.

Salon Commercial Property Insurance

Commercial property insurance will typically cover your equipment, stock, and the physical building. You don’t need to own the building to buy this type of insurance, as if you lease a salon, it gives you adequate coverage for your obligations as a tenant as well. It can also cover leased salon equipment.

General Liability Insurance for a Salon

General liability coverage for a salon can help to protect your salon from any legal action should somebody raise a claim against you and alleged your business cause damage to their property or they suffered from an injury as a result of an action your business took. If someone slips or trips in your salon, then a salon general liability insurance policy could cover any medical or legal expenses related to the claim. Similarly, if a chemical product was to splash onto a person’s coat or bag and cause damage to that property, then a general liability policy could payout for any property damage that was sustained on your premises or by any representative of your business.

General liability policies will not usually cover your professional liabilities. This is a different type of liability coverage that you will also need to buy to protect your salon from lawsuits arising due to professional negligence or wrongdoing.

Business Income Insurance for a Salon

Business income protection isn't’ always included in a BOP for salon owners, but it can usually be added on and easily form part of the overall salon insurance package. If you are unable to open your salon as a result of a ‘covered’ event, such as a fire, then this policy would help to replace any lost income.

Data Breach Insurance for Salons

Most salons now offer online booking for their clients and have extensive records, be that on paper or digitally. These records contain a lot of personal data about your clients, such as their contact details, payment information, and more. If you were to suffer from a cyber-attack or have your company information compromised in any way, you are legally obliged to inform any affected parties, as well as offering them ongoing credit monitoring services. If you face legal action from your clients, there is also the cost of legal defense and any settlements to consider as well.

With this in mind, the cost of a data breach for a salon could easily spiral into a four or five-figure sum. Buying data breach insurance for your salon will give you complete peace of mind that your legal obligations will be handled and covered; it also gives you money to handle the PR side of the breach to reduce the long-term impact of the breach on your salon as well.

Professional Liability Insurance for Salons

Regardless of the type of salon you operate, be it a beauty, hair, or nail salon (or perhaps a combination of all three); buying liability coverage for your professional services is key. You might have also heard of Errors and Omissions insurance or E&O for salons; these are all the same thing, just labeled a little differently.

Regardless of how careful you are, and even with the best health and safety measures and training, accidents can happen to anyone at any time.

Buying professional liability insurance for your salon will give you protection should a client decide to take legal action against you. Not only can this cover the money needed for your legal defense, any damages or expenses, it can also protect your assets should you be sued.

Employment-Related Insurance Options for Salons

If you have a workforce in your salon, then you’ll need some form of employee-related insurance.

Workers Compensation Coverage

If your employees suffer a work-related illness or injury, this coverage will pay their medical expenses, and it might also pay out a partial payment that relates directly to their lost income. Each state has its own set of requirements, so it’s work speaking with your local salon insurance agent or checking online for the most up to date obligations. 

Employment Practices Liability Insurance

If a member of your present or past workforce decides to take legal action against you, this type of insurance will protect you by giving you coverage in case of a lawsuit for discrimination, retaliation, harassment, or wrongful termination. This type of insurance is also known as EPL coverage.

Employee Benefits Liability Coverage for Salons

If you manage your own employee benefits, and this isn’t outsourced to another company, then this type of insurance will provide you with coverage for any mismanagement of the employee benefits administration. If an employee sues you because you failed to administer a benefit correctly, this will give you coverage for any legal fees or settlements.

Back-Up of Sewers and Drains in Salons

Most salon owners run their operations from a fixed premise, and because of this, insuring your salon with additional coverage for the back-up of drains and sewers is worth seriously considering. If your salon was to become inhospitable due to water damage, then it would likely impact your ability to operate a business. Aside from this, there is the cost of the clean-up to consider as well. This type of insurance for salons is considered essential as water damage from backed-up drains and sewers are typically not included in a standard salon insurance policy.

Salon Product Liability Coverage

Most salons will sell products. It doesn’t matter whether you’re a hair salon, a beauty salon, a barbershop, or a nail salon; product sales are often an essential source of revenue for your business. However, if you make, sell, use, or distribute products that cause harm to a client, you could be faced with costly legal action. 

Buying product liability coverage for your salon can help you cover the legal fees involved, along with any settlement costs. Although this type of coverage is included within a general liability policy, for salon owners, it is worth considering your levels of coverage and using additional product liability options to increase these levels.

If you need help to know which type of liability coverage is best for a salon, talk with an expert insurance agent for salons. They can help you assess your levels of risk and help you find the best levels of coverage for your salon at the best value.

What Insurance Risks do Salons Face?

Just like any other service-orientated business, there are genuine risks that your business, your staff, and your customers are exposed to on a daily basis. Even with the best health and safety processes in place, an accident can happen at any time.

Here are just a few examples of why salons owners need to buy insurance.

Trips and Slips in the Salon

If one of your clients slips on a patch of wet floor or trips over a wire, then your business will become liable for this injury.

Property Damage

If a client’s coat was subject to a spillage or accidentally got covered in a chemical product that causes irreparable damage, then your salon is also liable for the cost of replacing that property.

Breakdown of Salon Equipment

The equipment in your salon is often fundamental for your successful and regular business operations. If the equipment breaks down or develops a fault, then you might not be able to provide your services, your income could suffer as a result, and you could lose valuable clients.

Unplanned Interruptions

If there was a problem with the physical salon building, that could be water damage from a storm, a fire, or any other ‘covered’ event, your business could be severely impacted, and you might not be able to earn revenue for your salon. Irrespective of the length of time of the interruption, your bills will still need to be paid, and with no money coming in, this could present a financial period of unrest for your salon.

Issues with Products

As a salon owner, whether you use, sell, make or distribute products, you can be held liable should the end-user of that product suffer an injury or illness from their use. Many salons resell shampoos, conditioners, serums, creams, grooming tools, and more; if a client suffers a reaction or one of the tools develops a fault that causes an injury, the salon itself is liable for the damages caused, and very often, the legal expenses to go with that will also need to be covered.

Issues with Professional Services

If a client alleges that your professional services were not provided correctly, adequately or you were negligent, then you may have to deal with a lawsuit, along with all the costs that brings.

Employee Accidents

There are lots of different hazards in the salon environment. Even with the best health and safety procedures and training in place, sometimes accidents happen. Aside from this, with exposure to chemicals and muscle injuries from repetitive actions, there are many different ways an employee can become ill or injured because of their work. If this happens, their medical expenses and their wages (or a portion thereof) will need to be covered.

As you can appreciate, there are many risks a salon faces, and there are lots of options if you need to buy insurance for your salon as well. Talking to an insurance agent who specializes in the provision of salon insurance can ultimately help you get the best insurance for your salon at the most reasonable cost.

Disclaimer: This information has been written for the public as informational only. Since coverage varies from state to state, it is important to speak to a licensed insurance agent in your state.

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