The Right Business Insurance for Salon Owners
If you own a beauty salon, salon insurance for salon owners is critical. An honest mistake by an employee or a slip on the floor by a customer could be all it takes to put your business on the wrong end of a lawsuit. Here's a closer look at the different types of insurance for salon owners with inside tips from a fellow owner.
Types of Business Insurance for Beauty Salons
Business insurance for salons can be broken down into five main coverage areas. While some may be required by your landlord or state laws, savvy business owners often purchase additional coverage to protect their business and personal assets in the event of an accident or lawsuit.
“For general liability insurance, you need it because, if you're leasing, it's required. But it also covers you for catastrophic events," said Edwin Ivanauskas, an owner of the Beauty Zone salon in Park City, Utah. While his landlord's lease agreement requires general liability insurance, he explained that he would have bought this type of coverage anyway.
General liability helps cover businesses for a wide range of anticipated and unexpected risks. If your employee is slow to sweep up the hair after a cut and a customer slips, falls, and is injured, general liability may cover medical bills. If someone falls getting off a barber chair, even if it's their fault, they could blame the business. With general liability in place, you get extra protection that this type of event won't bankrupt your company.
Requirements for professional liability coverage vary by profession and state, so it may be wise to seek professional advice from an insurance agent if you have questions about your insurance requirements.
“Our risks are harder to gauge," he continued. “Professional liability covers if someone makes a professional mistake. An example is hair color. If someone is new and makes a mistake and leaves chemicals on someone's scalp, they could lose all of their hair."
Professional liability helps cover if something goes wrong such as: Haircutting, styling, dyeing, trimming, shaving, conditioning, shampooing, facial massage and treatment, nail service, waxing, makeup services (non-permanent), and scrubs, masks, wraps (no peels). Advice or instruction that is given for the purpose of an appearance in connection with these services falls under this coverage.
A wide range of situations could occur here. A staff member could make a severe mistake that ruins someone's hair for their wedding. A customer could wind up with an infection after a manicure. There are countless ways someone could be burned, cut, or injured, even in the safest salon environment. For “any long-lasting outcomes that are not good for the customer, we want to be protected," Ivanauskas said.
Westfield offers professional liability insurance along with general liability and property coverage, including business interruption coverage, among other essential insurance needs.
State laws often require business owners to purchase workers' compensation insurance, sometimes referred to as “workers comp," as soon as they hire their first employee. That may involve working with a trusted insurance provider or a state-designated insurance fund.
Just as a customer may be injured in the workplace, an employee can get hurt. In some ways, employee injuries may be more likely, as workers are hands-on with chemicals, hot electrical equipment, sharp scissors, razor blades and other potential hazards.
Workers' compensation is designed to help cover the costs of an injury, help a worker heal, and get them back to work as quickly as possible. Westfield workers' compensation policies generally include access to 24/7 medical care, pharmacy benefits and income replacement for the worker while they're away. In the worst-case scenario where a fatal accident occurs in the workplace, this coverage often includes funeral costs and death benefits for a surviving spouse and dependents.
Employers should provide a safe workplace and follow federal, state and local regulations to help keep workers as safe as possible. But if an accident does occur, you can rest a bit easier knowing you have this coverage in place.
Generally speaking, Umbrella insurance is additional insurance on top of your regular insurance. Many business owners and other successful professionals choose to buy umbrella coverage to help protect business assets in the event of a large claim, such as a car accident, for which the value of the claim exceeds the amount of coverage limits available.
Many salons have a website or mobile app where customers can book appointments and make payments. If someone hacks or breaches one of these systems and bad actors get ahold of your customer data online, you could find yourself in legal hot water. Cyber insurance, also referred to as data breach insurance, helps protect your business from the financial costs of a breach.
Cyber Suite coverage from Westfield includes the following:
- Data compromise response coverage
- Computer attack coverage
- Cyber extortion coverage
- Identity recovery coverage
- Data compromise liability coverage
- Network security liability coverage
- Electronic media liability coverage
You may not realize that small to mid-sized businesses often fall victim to payment system breaches, website hacks and other cybersecurity troubles. The FBI reported nearly 800,000 internet crimes in 2020, with losses exceeding $4.2 billion. With cyber coverage, you have a backup plan if your online security systems don't work as expected.
Protecting Your Salon From Financial Risk
Running a business is hard work. And no matter how diligent you are, some risks remain in any salon. “With one liability issue in 20 years, you could lose your business," Ivanauskas said.
If you're unsure about your coverage, reach out to a trusted Westfield agent today to learn more about your risks and the best strategies to protect your business and personal assets from liabilities. “You can't predict a $100,000 lawsuit," Ivanauskas said, but “you can predict the cost of insurance. That's the whole point."
With the right insurance in place, you can focus on running a successful salon without worrying about those unexpected risks. That's something any salon owner or manager can enjoy.