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

Beauty Salon

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

Beauty 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 Beauty Salon’s General Liability Insurance May Cover

Example 1: One of your stylists stumbles and cuts a customer with a set of shears by mistake. Understandably, the customer is outraged and insists that your company pay for her medical care. This is most likely covered by your general liability insurance.

Example 2: A competitor sends you a letter stating that your new logo is too similar to theirs. They make the decision to sue you. Fortunately, your general liability insurance will cover the expense of your legal defence as well as any settlement that may be required.

Example 3: While turning a curve, an employee fails to slow down and collides with a salon client. The client is thrown to the ground, breaking her wrist. She files a lawsuit against your company for monetary damages. Your general liability insurance coverage will cover your legal expenditures, including the cost of employing an attorney and any mandatory payments or settlements.

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 beauty parlour 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:



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 Beauty 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 all beauty shops should have are as follows:

Insurance for Professional Liability

Professional liability insurance protects against negligence lawsuits resulting from errors or failure to perform. As a professional, you are constantly at danger of one of your customers deciding that your services have harmed them. If a customer sues your company, your professional liability insurance will cover your legal fees. If you settle out of court, it will cover the expense of hiring an attorney as well as the cost of a settlement.

Insurance for Commercial Property

All of the products and equipment you need to run your salon required a significant investment on your behalf. If you lost most or all of your property in an unforeseen occurrence, such as a fire, you may find it difficult to replace it so you can go back to business. However, if your business property is damaged by a covered incident, you may make a claim and get assistance from your insurer.

Coverage Options for Some Beauty Salons

In addition to the insurance listed above, your beauty 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 Product Liability

Product liability insurance protects your company from litigation arising from the items it sells. It will cover your legal expenses if you are sued by a consumer who says your items harmed them.

Insurance for Workers’ Compensation

Most states require firms to have workers’ compensation insurance. When an employee is injured while doing work-related responsibilities, their medical care is covered by the insurance coverage. The coverage will also assist in compensating the employee for missed earnings while he or she heals from his or her injury.

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.