Hair Salon Business Insurance

Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a hair salon.

This article will discuss the primary insurance coverage for hair salons, general liability insurance, as well as additional policies that are appropriate for this industry.

Hair Salon General Liability Insurance

Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.

General liability insurance covers the following risks:

Physical harm

Damage to property

Medical expenses

Legal defence and decision

Personal and commercial harm

While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.

Situations That A Hair Salon’s General Liability Insurance May Cover

Example 1: One of your hairdressers runs over a cable and accidentally cuts a client with her shears. The consumer is very disturbed by the mishap and plans to sue your salon. Your general liability insurance would cover your legal expenditures while you defended your company. If the matter is resolved out of court, it will also pay for the settlement.

Example 2: A client walks into your salon from the parking lot and steps on a spot of ice outside your entrance. She trips and falls, breaking her hip. She requests that your company pay for her medical care since the accident occurred on your premises. Your general liability insurance coverage would very certainly cover her medical expenditures.

Example 3: A competitor sues you because your new logo is too similar to theirs. Your general liability insurance will cover your legal bills as well as any payments or settlements necessary to conclude the lawsuit.

Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.

General Liability Insurance Cost

The typical American hair business pays between $350-$750 per year for $1 million in general liability insurance.

The cost of your coverage will be determined by a number of variables. Among them are your:

Location

Deductible

Employees’ number

Per-occurrence restriction

The overall aggregate limit

You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.

Other Types of Coverage Required by Hair Salons

While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that any hair shop should have are as follows:

Insurance for Professional Liability

As a salon service provider, you might benefit from professional liability insurance tailored to your unique needs. If one of your customers claimed that your services caused them injury and launched a lawsuit against your company, your insurance would protect you. You should check with your insurer to see whether your coverage covers your workers and/or independent contractors. Those who work for you must evaluate if they need extra protection beyond what is provided by your insurance.

Insurance for Commercial Property

The numerous salon equipment and supplies you possess, as well as your salon product inventory, would be costly to replace if lost in an unforeseen disaster such as a fire. A business property insurance coverage will assist in covering the expense of replacing property damaged or destroyed in insured incidents. This manner, you can purchase fresh equipment and supplies and go back to work.

Coverage Options for Some Hair Salons

In addition to the insurance listed above, your hair salon may need other forms of coverage based on particular elements of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.

Insurance for Workers’ Compensation

If you hire employees for your salon, you are almost certainly obliged by state law to have workers’ compensation insurance. Your employees will be protected if they are injured while doing work-related responsibilities if you have a workers’ compensation coverage in place. The coverage will cover medical expenses as well as missed earnings while injured personnel recuperate.

Umbrella Insurance for Businesses

Your general liability insurance coverage is a strong foundation for safeguarding your company, but it is possible to surpass your policy limits in some situations, such as if you lose a significant lawsuit and are ordered to pay substantial damages. You would have to find a means to cover the losses that remained after the policy expired if you just have general liability insurance. In such a case, if you have an umbrella insurance, after the limitations of your general liability coverage are surpassed, your umbrella policy will kick in and pay until its limits are met.

Additional Security Measures for Your Company

Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.

With this in mind, here are a few steps you can take to better secure your company:

Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)

To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)

Keep your company licences up to date.

Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.

If your company is an LLC, you should check into LLC insurance.