You have many things to consider as a hair or nail salon contractor working under a salon booth rental agreement. You only get paid based on the number of clients you service as an independent contractor, so making your revenue stream consistent is important. But there are plenty of other aspects of business operations to think through, too. From keeping your clients and the salon owner happy, to managing your accounting books, it's not simply staying up-to-date with the latest techniques that's important.

Generally, when you operate under a salon booth rental agreement“you're an independent contractor, so you must understand all aspects of operating as a business owner, " says Steve Gomez, a salon and spa business coach based in Chino, California.

Operating your salon business comes with risk

Even though you may not be running a complete salon, as an independent contractor, you must protect your business. That goes beyond maintaining a clean area around your booth and keeping your tools sanitary. You must consider what happens if something goes wrong with a client.

“There are significant opportunities for liability in any salon business," Gomez says. You could burn or cut someone with your tools, a client may experience an allergic reaction to a product, a hair or nail dryer you own might malfunction and harm your client. A client could also slip and fall in the salon or have some other accident while there, whether near your booth or someplace else in the shop. Those clients may have high medical costs or experience other damage, like wage loss, that they want compensated.

“These are some of the myriad things that could occur," adds Gomez, “and the client may sue you for any of them or other reasons."

Are you insured against liability?

If your client files a lawsuit against you, will insurance help protect you? This is not a question to answer when the unthinkable happens. It's one to know the answer to in advance, just like you know your clients' favorite hairstyle or nail color.

You may not be able to count on your salon owner's insurance covering you, either. Their commercial insurance may cover damage to the salon, from a fire, flooding or vandalism. But it may not cover you for mistakes you make or accidents you have with clients that could be covered under your policy. It may not cover your business property, either. “For some things, your client may sue the salon owner, but they also might hire a lawyer and sue you, too," Gomez says.

Even if your salon booth rental agreement requires you to have your own insurance coverage, oftentimes “without the right liability insurance, you'll be out of pocket for any lawsuit damages," Gomez says. You could also risk losing assets.

How does liability insurance protect salon independent contractors?

The proper liability insurance can help bring peace of mind. When you and your business have a claim covered by your insurance policy, your insurer will generally help protect you in lawsuits through available coverage and legal defense. With the right combination of liability insurance, you can better protect your business.

As a hair and nail salon contractor, you should explore purchasing general liability insurance, too. This insurance is relevant because you operate your business out of a salon. It can protect you against clients who allege injuries in the salon due to your negligence if, for example, they slip and fall on a product you spilled or hair you left on the floor. It is a way that you can finance these potential liability losses. General liability coverage covers two broad types of liability loss: Bodily injury and property damage for injuries like slip and falls mentioned above or reactions to products used, and personal and advertising injury due to libel, slander or infringement upon another's copyright in your advertisement. This insurance may also include medical payment coverage to pay for medical expenses of a client injured while in your salon area due to your activities.

Product liability coverage also may be ideal for salon independent contractors. It can cover you if a client says a product you used on them or sold to them caused an injury, damage, or loss.

You may want to consider personal and business property insurance, too, to help cover theft or damage to your property within the salon.

How do you buy liability insurance?

If you're debating between purchasing liability insurance or just trusting that nothing will go wrong, Gomez urges caution. “Liability insurance is a business expense," he says. "Not to protect yourself to save money is not responsible business management."

He suggests researching liability insurance carefully to get the right coverage in place with the right limits at the right price for you. Ask the salon owner if they need to be covered on your policy. Talk to your insurer about it to find out if it would entail an extra cost. Be sure to ask to see everything the insurance you're considering covers, so there are no surprises. Most of all, try to find the right policy that will help cover you for the types of incidents that can occur by talking to other salon professionals to see what can happen.

To help avoid losing your assets in a lawsuit, going out of business or bankrupted, the right insurance is the protection you need. Contact your local independent Westfield agent today to learn about the business insurance solutions that are right for you.