2019년 7월 20일 업데이트됨
There are many problems you need to consider when running a salon business from investing in machinery and equipment, preparing the business plan, finding business management software to train employee effectively. In addition to the above issues, salon insurance is also an important problem for business owners to pay attention to when opening their salon business.
So, which necessary insurance is required for hair salon business?
Let’s have a look at this article to find out what are the most common type of hair salon insurance. In addition, the article also gives you 3 tips in getting insurance for your hair salon.
I. Why Hair Salon Need Business Insurance?
Commercial auto insurance covers repairs and related lawsuits when a vehicle used by your salon business is involved in an accident. Most states require a minimum of liability coverage for business-owned vehicles to pay for damages you cause, but policies can also include coverage for damage to your cars and all vehicles your business rents, hires, or borrows..
When something does go wrong, it can prove to be costly. Salon Insurance is vital when that happens because it protects your salon business from the unexpected losses that you might otherwise struggle to afford. But there are other reasons that you should have insurance for your salon. It can help you:
Manage Employee Easier
Manage Workplace Property
Manage Important Customer Files
Manage Important Business Records
II. What Are Most Common Type Of Hair Salon Insurance?
1. Business owner’s policy
You know what General Liability does, and Commercial Property is another staple coverage. Between salon chairs, beauty supplies, furniture, and technology, your beauty shop relies on a lot of property to run. If this property were damaged in a fire, you'd lose the property that allows you to make a living.
Your BOP's property protection can help to repair or replace your building and/or its contents so you can get back to work quickly after a fire, theft, or windstorm.
2. General liability insurance
It helps protect your hair salon from certain lawsuits alleging bodily injuries or property damage that occurred as the result of your business operations. For instance, there is a customer falls and hurts themselves while being in your salon. Or an employee spills hair color and ruins a customer’s purse or clothing. General liability coverage can help cover the costs. It can also help cover certain claims of slander and libel against your business. This doesn't cover liability arising out of the professional salon service you may provide.
General Liability Insurance can cover basic liability issues in a salon, such as…
Third-party injuries: You can get sued by someone who slips and falls at the salon.
Third-party property damage: If you spill hair dye on your client's very expensive suit, they can demand that you pay for the cost to repair or replace their designer threads.
Product liability: A client may sue over the physical injuries your hair products caused.
Advertising injuries: If you fire off an angry tweet about a problematic client, they may claim it's libel and sue you over the damage to their reputation.
3. Commercial property insurance
Commercial property insurance covers the physical assets of your business, such as your salon and the contents within it. Policies typically pay for damages to these assets caused by fire, theft, vandalism, or extreme weather. Theft is one of the greatest risks small businesses face, so property insurance is a must for salons in most locations.
Most salons qualify for a business owner’s policy, which combines commercial property with general liability insurance at a reduced rate. BOPs also include business interruption coverage. If your salon is forced to close because of a covered event, business interruption covers your lost income and ongoing expenses during the closure.
4. Worker’s compensation insurance
Required by most states, workers’ compensation provides benefits to employees for work-related injuries or illnesses. These employees include:
Other employees of your hair salon
Benefits could include medical care, helping to cover medical bills and replace some wages from lost working time. If the worker’s family decides to sue you, workers’ comp coverage can help you with the related legal fees, as well. Hair salons and beauty salons are among the many businesses that have been turning to The Hartford for workers’ compensation for more than two centuries.
State law determines coverage, but injuries covered by workers’ comp typically include:
Occupational injuries such as lung disease caused by breathing in hazardous chemicals
Traumatic injuries such as a broken wrist after a fall
Repetitive stress injuries such as carpal tunnel from cutting hair
5. Professional liability insurance
Professional liability insurance, also called Errors and Omissions Insurance (E&O), covers your legal fees if a client claims your negligence or errors caused them financial harm. Whether a mistake is your fault or not, professional liability insurance helps pay lawyer’s fees, court costs, and judgments or settlements.
For example, let’s say you accidentally dye your client’s hair the wrong color, and they claim they lost a modeling gig because of it. If that client sues, professional salon liability insurance covers your legal bills.
6. Commercial umbrella liability insurance
Commercial umbrella insurance extends the limits on underlying salon liability insurance policies in increments of $500,000 or $1 million. Unlike other policies, umbrella insurance is not used to protect against a specific risk. Instead, it adds coverage when other liability coverages are insufficient.
For example, if your general liability limit is $1 million, but a lawsuit over a customer’s slip-and-fall costs $1.5 million, an umbrella policy pays the additional $500,000. Buying an umbrella policy is usually more cost-effective than adding coverage to your other liability insurance.
7. Commercial crime insurance
Commercial crime insurance covers financial losses stemming from illegal activity such as checking fraud, theft, and counterfeit money schemes. Most policies reimburse policyholders whether the criminals are employees or outside actors.
Salon owners often assume these financial losses are covered in commercial property. Unfortunately, property policies often exclude employees’ actions and stolen money, so commercial crime insurance is essential for salon owners who have employees or typically have cash on hand.
8. Commercial auto insurance
Commercial auto insurance covers repairs and related lawsuits when a vehicle used by your salon business is involved in an accident. Most states require a minimum of liability coverage for business-owned vehicles to pay for damages you cause others, but policies can also include coverage for damage to your cars and all vehicles your business rents, hires, or borrows.
For example, if you send an employee to pick up beauty supplies, you can be held liable for damage to their car. Commercial auto insurance with hired and non-owned auto coverage can pay for the damage. Salon owners who don’t have business-owned vehicles can sometimes add hired and non-owned auto insurance to their general liability policy.
9. Hair salon insurance for booth renters
Salon owners who lease space to independent contractors who are often called booth renters in the industry may have additional insurance concerns. More often than not, neither general liability nor professional liability includes independent contractors in the coverage. This does not, however, mean salon owners can’t be caught up in a lawsuit over their booth renters’ actions.
To make sure they are fully protected, salon owners who lease space have three options:
They can look for an insurer that extends coverage to booth renters.
They can add their booth renters to their liability policies as additional insured.
They can require all booth renters to carry hair stylist liability insurance.
The first two options may cause the owners’ hair salon liability insurance costs to go up, but choosing either also means they can be sure coverage is in place. On the other hand, the third option puts the burden of getting insurance on the contractor, but the salon owner will need to follow up to make sure the contractor gets and maintains sufficient coverage.
10. Data breach coverage for salons
Hair salon businesses may store sensitive information about their employees, stylists, manicurists, and clients. This data can include debit/credit card numbers. If this information gets lost or stolen, it could leave your business vulnerable to lawsuits and a damaged reputation.
If personally, identifiable information gets lost or stolen, data breach coverage can help pay the recovery costs. This includes:
Notifying impacted individuals
Managing public relations
Good faith advertising
III. 3 Tips In Getting Hair Salon Insurance
1. Gather the documents you need before you apply
Insurance applications can be very detailed, and while you may know some of the information you need, chances are you’re going to have to look some of it up. Gathering that information before your application helps the insurance agent, broker, or underwriter know how to best protect your business against exposures common in the salon industry.
Some of the information you may need when you apply for salon insurance include:
Business contact information
Building lease, if applicable
Number of employees
Value of assets, such as: chairs, equipment, products, and inventory
Services you offer, especially hazardous ones such as chemical treatments
2. Choose a provider who knows the salon industry
Salon insurance is industry-specific, which means there are risk exposures and insurance needs that are unique to your business. An agent with experience in writing salon insurance is more likely to accurately assess risks common to the industry, such as client injuries from hair products. Their accurate assessments help you get the right coverage at the best price.
3. Provide accurate information
Insurers use the information on your application to determine if they will offer coverage, which policies you need, and how much they will cost if they do. This helps providing complete and accurate information essential to get the appropriate coverage for your business. Leaving out information or making mistakes can cause you to be underinsured or your claims to be rejected.
There are many different types of salon businesses, and each one has unique exposures that need to be protected with the appropriate insurance policies. To get a better idea of what beauty salon insurance policies you need, it’s important to speak with an insurance representative who can assess your risk and get you a quote from a top insurance provider.
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