Understanding Business Insurance for Cosmetologists
As a cosmetology business owner, you’re focused on providing excellent service to your clients. But at the same time, you have to address “big picture” issues, like protecting your business financially with insurance.
For salons, day spas, and other beauty treatment providers that aren’t adequately insured, all it takes is one incident and a lawsuit from a client or other visitor to their shop, and they can end up with a large financial burden. Sadly, many companies go out of business every year because the cost of defending themselves and paying court-awarded damages is more than they can bear.
And large lawsuits can arise from seemingly minor issues. A client trips over a ripple in a rug, falls, and hurts her wrist. It seems like a minor injury, but later she learns she has broken a bone and will need surgery. So, on the advice of her attorney, she sues your business because you should have noticed and dealt with the rug problem.
Even if it turns out that her claim is baseless, you’ve got to hire an attorney, take time off for court proceedings, etc. Without insurance for cosmetologists, the costs add up quickly.
And lawsuits aren’t your only risk. Damage to company property can be equally costly if you don’t have the right business insurance policies.
Who Needs Cosmetology Insurance?
Virtually any type of cosmetology business needs business insurance to protect itself from liability and physical damage losses. That includes:
- Barber shops
- Beauty salons
- Cosmetology services
- Hair salons
- Massage parlors
- Nail salons
- Permanent makeup services
- Skin care centers (not dermatologists)
- Tattoo artists
- Tattoo parlors
- Day spas
- Eyelash extension services
- Hair stylists
- Makeup artists
- Massage therapists
- Microblading services
- Nail technicians
- Reflexology providers
- Sun tanning salons
Common Cosmetologist Insurance Claims
While it shouldn’t be cause for alarm, the reality is that there are almost unlimited reasons for a liability lawsuit. For instance, a client may sue you because they believe you:
- Damaged their hair or skin through the improper use of chemicals or devices
- Hurt their chances in an interview or audition through the poor-quality professional services you provided
- Had conditions in your shop that led to them suffering a slip-and-fall accident
- Damaged their property by exposing it to corrosive or staining substances, scratching it with shears, etc.
And the list goes on. Then, there are costs associated with issues like:
- A broken pipe that leaks water onto expensive equipment
- A severe storm that breaks your storefront window
- A fire in a storage area that damages the space and destroys supplies
- A car accident on your way to provide in-home services for a client
- A data breach by hackers who steal customer credit card information and use it to commit fraud
- An on-the-job injury to one of your employees
Fortunately, there are insurance policies to cover these and other issues. biBERK offers seven types of insurance for cosmetology providers:
- Workers’ compensation insurance
- Professional liability insurance (also called errors and omissions insurance)
- General liability insurance
- Business owners policies (BOP) (also called property and liability insurance)
- Commercial auto insurance
- Umbrella insurance
- Cyber insurance
Whether you need some or all of these policies depends on the specifics of your business. For example, if your company doesn’t own or lease vehicles for work purposes, you probably don’t need commercial auto insurance.
If you have questions about a particular type of coverage, a biBERK licensed insurance expert is happy to answer them.
Understanding Professional Liability and General Liability Insurance
Professional liability and general liability are two types of insurance often needed by cosmetology businesses. They protect you from the costs associated with liability lawsuits.
Professional liability insurance covers liability related to the services you provide. For example, imagine an actress comes into your shop to have you do her hair and makeup before she auditions for a role. Later, she claims your work didn’t meet a reasonable standard and, consequently, she didn’t get the job. She could sue you for her lost income.
General liability insurance is for incidents not related to the services you provide. For example, if a customer is injured when they slip on a wet floor, general liability insurance can cover your liability for her medical bills.
Pricing and Purchasing Cosmetology Insurance
As a business owner, you surely have many demands on your time. That’s why biBERK makes it easy to get and use business insurance.
That starts with obtaining instant, self-service, online quotes for the policies you need. Then, whether you decide to make an immediate purchase or buy policies later, you can also do that online. You can also get a Certificate of Insurance (COI) if you need one for any reason.
Coverage can be active as quickly as the following day. So, while you should have adequate cosmetologist insurance before seeing your first client, you can quickly add a new type of policy should your business change. For instance, if you decide to lease a car that your team members can use to visit clients’ homes, you can have financial protection for the vehicle almost immediately.
Should you ever need to report a claim, you can do that online, too.
But don’t take all these online self-help services the wrong way. Our team is always happy to hear from you and answer any questions you have about your policies or coverage needs!
Tips for Minimizing Your Cosmetologist Insurance Costs
Your insurance rate is based partly on your claims history. So, you can keep your costs down by taking actions to reduce the likelihood of claims. For example, you should:
It’s also a good idea to review your business insurance policies at least annually. You may need to modify your coverage if you’ve bought new equipment or made other significant changes. The same is true of issues outside your control. For example, a high inflation rate can increase the replacement cost for your equipment, supplies, etc., so it’s important to confirm your policy limits are high enough to cover any losses the business experiences.
Cosmetology is a fun rewarding field—even more so when you don’t have to worry about liabilities and losses because you have proper insurance coverage.