Beauty salons enjoy brisk business, even during times when the economy is not faring very well. There is always a need for salon services, and for many patrons, visiting a salon is also an enjoyable social experience.
While most people walk out of a salon looking and feeling better than they did when they entered, it is important to recognize that there is always the possibility of something going wrong during a salon treatment or another type of incident damaging the establishment.
Therefore, salons need comprehensive insurance to protect their businesses from the financial damage that could be caused by a natural disaster, lawsuit, or other incidents. Here is a closer look at must-have beauty salon insurance policies that can keep these businesses running no matter what happens.
General Liability Insurance
General liability is considered an essential type of insurance for all businesses, but salons are particularly vulnerable to the risks covered by this type of policy. General liability provides broad coverage for common mishaps such as property damage and client injuries. It also covers advertising injuries such as violations of privacy, copyright infringement, libel, and slander.
A general liability insurance policy will typically cover a salon’s entire premises, including the exterior, sidewalks, and parking lots. It is not just reserved for salons that own their commercial space; many commercial leases will stipulate that the renter must obtain this type of coverage to protect the property.
Salons are full of risks that go beyond the typical slips and falls that other businesses need to protect against. For example, clients can trip over the cords of hair dryers or curling irons and become injured, or they may slip on hair trimmings or wet floors near the hair washing station.
Commercial Property Insurance
Commercial property insurance covers losses to a salon’s building and its contents, such as chairs, counters, and equipment, due to perils such as natural disasters and vandalism. It is very valuable for salons as they often house costly equipment like reclining chairs and hood dryers. This is another type of insurance that is needed by owners and renters alike.
If, for example, a fire begins in a back room where hair dyes, nail polishes, and other flammable liquids are stored, it could cause the building’s sprinklers to turn on, leading to water damage as well as smoke damage. Commercial property insurance can help in these types of incidents.
Business Owners Policy (BOP)
A business owners policy, or BOP, is a type of insurance package that is often offered to small businesses like salons to allow them to save money by bundling commercial property and general liability insurance together. It often works out to be significantly cheaper than purchasing each component separately.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance or E&O, is an important type of insurance for salon owners to protect against professional mistakes.
Clients can sue salons if they believe they made a mistake or did something wrong, which can lead to a very expensive lawsuit. Even if a case does not have any grounds, this type of coverage can cover claims related to:
- Emotional distress – There are lots of incidents that could potentially lead to an emotional distress lawsuit in a salon. For example, if a colorist leaves hair dye on a client’s head for too long and it severely burns their scalp, the customer could sue for emotional distress as well as bodily injury from the chemical burns and the wages they lost while they were unable to work.
- Loss of personal data – Clients could sue salons for losing files that contain their sensitive personal information.
- Faulty treatments – If a salon performs a facial on a model that results in a rash that is severe enough to force the client to cancel a modeling job and seek medical treatment, she could sue for her medical bills as well as loss of earnings.
Salon Booth Renters Insurance
It is common practice for salon owners to rent booths or chairs in their salon to other hairdressers and beauty professionals. Many times they will require these professionals to obtain salon booth renters coverage. This protects the renters of the booth against claims related to property damage, bodily injuries, and professional mistakes while minimizing exposure for the owner.
Workers’ Compensation Insurance
Most states require salons, like all employers, to have workers’ compensation insurance, even if they only have a single employee. Even in areas where it is not required, however, it is highly recommended because it can protect salons from the cost of workplace injury claims.
This is vital in an industry with so much potential for accidents and injuries. There are so many ways that things can go wrong during salon treatments. For example, a hot styling tool could easily burn a hairdresser who is operating it. Employees may also drop heavy equipment on their feet or cut themselves with sharp scissors or manicure tools. Salon workers may also become ill due to exposure to toxic chemicals such as hair bleach and nail polish remover.
Business Interruption Insurance
If an unexpected incident causes a salon to close its doors temporarily, business interruption insurance can help the business stay afloat. Whether it is physical damage to the establishment, such as a tree falling on it, or a temporary road closure that renders the business inaccessible to customers, business interruption insurance can replace the income that is lost.
Its coverage can pay for rent or mortgage payments, taxes, loan payments, lost revenues, and employee payroll. Some policies may also cover the relocation costs and temporary rental expenses incurred if the business has to move due to physical damages.
Salons, like many other types of businesses, are increasingly using computers for storing customer information, processing payments, and marketing their services. Unfortunately, salons are common targets for hackers and other types of cybercriminals who know that they do not possess the type of complex cybersecurity measures afforded by banks and major corporations. Therefore, it is essential to have protection from the fallout of cyber breaches.
There are many ways cybercriminals can cause problems for salons. Stealing customers’ financial data may be the most obvious one, but they could also implement a ransomware attack that renders all of the salon’s data completely inaccessible. If the salon’s IT system or website goes down, it may be impossible to access the salon’s list of appointments and the personal files of clients, including their hair colors and other pertinent information for carrying out services.
Cyber insurance can pay for the costs of investigating cyber breaches and restoring the salon’s reputation and website after an incident. It can also pay any regulatory fines and provide credit monitoring services to clients whose information was compromised. This type of policy may also provide protection if a client files a lawsuit against the salon for the loss of their personal data.
Plate Glass Coverage
Glass storefronts are a salon staple, allowing passersby to get a glimpse into the atmosphere of the salon and giving clients a pleasant view of what is going on outside during long hair treatments. Although these windows are a nice feature, they are vulnerable to damage due to storms, vandalism, and other causes. For some salons, it may be necessary to obtain a separate policy for plate glass coverage if property insurance will not cover the full cost of replacing the glass.
Drain And Sewer Backup Insurance
Salons depend heavily on sinks for washing clients’ hair and cleaning and sterilizing the beauty tools they use. Therefore, even a small sewer backup can be enough to jeopardize their ability to do business. A drain and sewer backup insurance rider can provide valuable protection in these incidents and help cover any water damage they cause to the floors and walls of the salon.
Equipment Breakdown Insurance
Salon equipment is a major investment, and repairs can be costly. Unfortunately, if a hair dryer stops working or a salon chair breaks, it may mean needing to use a different styling station and canceling some appointments or even closing the salon while repairs are carried out.
In these incidents, equipment breakdown insurance can prove helpful by covering the repairs to the salon equipment. In cases where it cannot be fixed, it may even pay for the items to be replaced.
Salon Insurance Savings
Although salons do need several types of insurance for proper protection, owners often find that the cost is very reasonable considering the protection it provides. Smaller salons offering limited services will pay less than bigger establishments with a fuller menu of treatments, but there are a few ways that all types of salons can find savings. For example, it may be possible to obtain a discount by paying an annual premium instead of a monthly one. In some cases, certain types of coverage can also be bundled together to provide savings.
Employment Practices Liability Insurance (EPLI)
Employment practices liability insurance, or EPLI, offers valuable protection from the costs of employee-related claims, including the associated legal fees and compensation.
This is an important policy for salon owners given the challenging and constantly evolving nature of employment law. It can prove useful in cases where employees claim they have been mistreated, overlooked, or harassed and subsequently file a lawsuit.
Reach Out To Southern States Insurance
Every beauty salon faces its own unique set of risks depending on its location, the services offered, and many other factors. The best way to ensure proper coverage is by working with insurance agents who can tailor a package to suit the salon’s needs. Get in touch with the experienced professionals at Southern States Insurance to discuss your company’s risks and become protected with beauty salon insurance today.