Haris Ashley
Hairdressers and hair stylists face a variety of risks in their day-to-day work, from unhappy clients to bleach-induced injuries and property damage. To protect themselves and their businesses, they need insurance. There are several types of insurance available to hair professionals, including general liability insurance, professional liability insurance, and tools and supplies coverage. General liability insurance protects hair salons and stylists from claims of bodily injury or property damage. Professional liability insurance, also known as errors and omissions (E&O) insurance, protects hair professionals from claims of professional negligence, such as when a treatment goes wrong. Tools and supplies coverage, also known as inland marine, protects hair stylists' tools and supplies from loss, theft, or damage.
| Characteristics | Values |
|---|---|
| Type of insurance | Professional liability insurance, also called errors and omissions (E&O) insurance |
| Purpose | Protects businesses from claims of professional negligence, errors or mistakes in the services provided |
| Coverage | Lost wages, loss of personal information, emotional distress, bodily injury, property damage, etc. |
| Cost | Varies; BBI offers a base policy starting at $9.99/month; AHP offers an annual premium of $199/year or $17/month |
| Other types | General liability insurance, tools and supplies coverage, workers' compensation insurance |
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What You'll Learn
General liability insurance
As a hair salon owner or an independent hairstylist, you need insurance to protect your business when things go wrong. General liability insurance is a crucial type of insurance for hair salons and hairstylists, and it offers protection in several key areas.
Firstly, general liability insurance helps safeguard your business against claims of bodily injury caused by your company. This could include slips, trips, and falls that occur on your premises, which are the leading cause of unintentional emergency room visits. For example, a client could trip over a curled-up rug in your salon and sustain an injury, leading to a costly lawsuit. General liability insurance would protect your business in such cases.
Secondly, this type of insurance also covers claims of property damage caused by your company. This includes damage to a client's property due to a product or service you provided. For instance, if you are a hairstylist and accidentally damage a client's property while providing a service at their home, general liability insurance would offer protection.
Additionally, general liability insurance can provide peace of mind by protecting your business assets. Running a salon involves expensive tools and equipment that can be accidentally damaged, lost, or stolen. General liability insurance helps ensure that your property is protected, giving you financial reassurance.
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Professional liability insurance
As a hair professional, you may want to consider professional liability insurance to protect yourself and your business from lawsuits and claims. This type of insurance covers you if a client alleges malpractice or errors and mistakes in the professional services you provide. For example, if you recommend a product to a client and they experience harm or damage as a result, they may decide to sue you for compensation. Even if you are not found at fault, the legal fees alone could be financially crippling. Professional liability insurance can cover these legal fees and any settlements arising from the case.
Another example of when professional liability insurance would be useful is if a client claimed that their hair was damaged as a result of your service. For instance, if you applied bleach to a client's hair to achieve their desired look, but their hair broke off, they may blame you and seek compensation. Professional liability insurance would protect your business from these types of claims and lawsuits.
It is important to note that professional liability insurance is different from general liability insurance, which covers property damage and personal injuries that result from common accidents. General liability insurance is also important for hair professionals, as it covers claims arising from situations such as a client slipping and falling or bumping into furniture. However, it does not cover injuries that are a result of errors in your work, which is where professional liability insurance comes into play.
When selecting a professional liability insurance provider, it is crucial to carefully review their policy offerings and understand the inclusions and exclusions. Some policies may only cover active policy periods, while others offer occurrence form coverage, which allows you to file a claim for an incident that happened while covered, even if your policy has since expired. It is also important to consider the financial implications, as the costs and premiums mentioned are usually estimates and can vary depending on specific risks.
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Tools and supplies coverage
Additionally, tools and supplies coverage can be beneficial for hair salons that offer mobile services or have employees who travel to clients' homes. In these cases, there is an increased risk of equipment being lost, stolen, or damaged while on the move. Tools and supplies coverage can provide peace of mind and financial protection in the event of such incidents.
It is worth noting that tools and supplies coverage is typically not included in standard homeowners or renters insurance policies. As such, it is important for hair salons and hairstylists to consider specialised business insurance that includes this type of coverage. By customising their insurance policy to include tools and supplies coverage, hair salons and hairstylists can ensure they are protected against the unique risks associated with their industry.
The cost of tools and supplies coverage can vary depending on the value of the items being insured and the specific risks involved. However, it is generally an affordable way to protect your business assets. For example, BBI offers additional coverage for tools and supplies starting at only $2 per month.
In conclusion, tools and supplies coverage is a crucial consideration for hair salons and hairstylists. By safeguarding their business supplies and movable equipment, hair professionals can minimise disruptions to their operations and ensure they have the necessary tools to provide high-quality services to their clients.
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$9.92 $14.99
Workers' compensation insurance
Working in a hair salon comes with unique risks, such as repetitive motions, exposure to chemicals, and a fast-paced environment. Workers' compensation insurance helps protect employees from various types of injuries, including repetitive strain injuries from cutting, blow-drying, or nail polishing. It also covers chemical burns caused by hair dyes, bleaches, and other salon chemicals, as well as slip-and-fall accidents due to wet floors, spilled products, or loose cords. Additionally, it provides coverage for puncture wounds and cuts from scissors, razors, or other sharp tools, and overexposure to fumes from aerosols, cleaning agents, or chemical treatments.
The cost of workers' compensation insurance for hair salons is typically based on payroll, with rates varying depending on the state and the specific classification of the business. The National Council of Compensation Insurance (NCCI) sets a fixed rate for each industry, and insurance companies use class codes to categorize employees for rating purposes. Part-time workers and cash-paid employees must also be covered under workers' compensation insurance.
In addition to workers' compensation insurance, salon owners may also consider other types of insurance, such as general liability insurance, professional liability insurance, and tools and supplies coverage, to comprehensively protect their business and employees.
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Property insurance
Protection Against Loss or Damage
Fire Damage Coverage
Fire damage is a real risk for any business, and it can result in significant losses. Property insurance helps cover the cost of repairing or replacing damaged equipment, furniture, and the contents of your salon or workspace. This includes salon chairs, mirrors, hairdryers, styling tools, and any other items essential to your business.
Business Interruption Coverage
Protection Against Client Property Damage
General liability insurance, which is often included in property insurance, can protect you in case of client property damage. For example, if a hair treatment goes awry and damages a client's expensive handbag, this insurance can help cover the cost of repairing or replacing the item.
Coverage for Off-Premises Equipment
Some property insurance policies also cover business equipment and tools that are damaged or lost while off-site. This is particularly relevant for mobile hairstylists or those who make house calls. If your equipment is damaged or stolen outside of your salon, this coverage can help with the financial burden of replacement or repair.
In conclusion, property insurance is a vital safeguard for anyone in the hair industry, from salon owners to independent hairstylists. It provides a broad range of protection, ensuring that your physical space, equipment, and inventory are covered in the event of theft, damage, or loss. By having property insurance, you gain peace of mind and resilience against the unpredictable, allowing you to focus on serving your clients' needs without worry.
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Frequently asked questions
Professional liability insurance, sometimes called errors and omissions (E&O) insurance, is insurance coverage for claims against businesses that provide professional and personal services. It covers financial losses arising from the beauty services provided to customers.
General liability insurance helps protect your salon from claims that it caused bodily injury or property damage to others. It also covers third-party claims of slander.
Tools and supplies coverage, also known as inland marine, helps cover your movable gear if it gets lost, stolen, or damaged. It covers your shears, hot tools, products, and electronics.
Workers' compensation insurance is required by most states to help small business owners provide important benefits to employees for work-related injuries or illnesses.
