Beauty Salon Insurance
Your clients come to you because you help them look and feel their best. They trust you and you earn that trust every time they come back with friendly service and expertise in your craft. But running any business comes with its own unique risks and the successful ones are businesses that protect themselves against those risks. So whether you’re a sole practitioner working out of your home or renting out space in someone else’s shop, or you run a multi-service beauty salon with several employees, beauty salon insurance is an affordable way to protect your business and give you peace of mind.
Who is Beauty Salon Insurance For?
If your Beauty Salon offers; hair services, waxing, threading, tweezing, facials, as well as:
- Manicures / pedicures
- Eyelash / eyebrow tinting
- Body Treatments
- Makeup services
Or any other personal care services, beauty salon insurance can help protect you from the risks that come with providing services that your clients care intimately about and that could potentially cause them harm.
We cover some of the risks that are common in the beauty industry in this post and how you can help keep your beauty salon serving your loyal clients for many years to come.
No matter where in Canada your beauty salon calls home, your local municipal and/or provincial government will have its own policies regarding beauty salons. The City of Toronto provides useful guidance for beauty salons and other services including:
- Guidelines for All Personal Service Settings
- Body Rub Parlours & Holistic Centres
- Checklist for Hair Stylists Salons & Barber Shops
- Checklist for Hair Stylists Salons & Barber Shops in Long-Term Care & Retirement Homes
- Checklist for Nails & Aesthetic Services
- Checklist for Tattooing & Body Piercing
Protecting your Beauty Salon – The Products you Use and Sell Could Land You in Hot Water
Whether they’re your own or they come from a known supplier, the products you use and sell in your beauty salon carry with them a certain amount of liability. According to the Government of Canada:
“Under the Food and Drugs Act, a cosmetic includes ‘any substance or mixture of substances, manufactured, sold or represented for use in cleansing, improving or altering the complexion, skin, hair or teeth and includes deodorants and perfumes.’ This includes cosmetics used by professional esthetic services, bulk institutional products (such as hand soap in school restrooms), as well as “handmade” cosmetics sold at craft sales or home-based businesses.”
This means that the beauty supplies you use and sell:
Additionally, cosmetics are subject to the requirements of the Consumer Packaging and Labelling Act and Regulations and any chemicals found in cosmetics may be subject to the Canadian Environmental Protection Act.”i
So if a customer has a bad reaction to a product used or sold in your salon, you may be legally and financially liable. Protect your business beauty salon from lawsuits due to allergic reactions, burns and other injuries, make sure to have Product Liability Coverage included in your beauty salon insurance plan.
What Type of Beauty Insurance Might I Need for My Business?
There are different coverages you need for your beauty insurance based on the services you provide, risk tolerance, business location, etc.
Here are the recommended beauty insurance coverages for your beauty business.
Commercial General Liability Insurance – also called CGL insurance, protects your beauty salon business against lawsuits and liability alleging property damage, false advertising, injuries, libel, slander, etc., arising from the premises, operations, products, and completed operations of your business.
Commercial Property Insurance – your beauty salon likely operates out of a commercial building and relies on various specialized equipment to provide services to customers. Damages to your equipment or salon can be costly to repair or replace in the event of a fire, flood, or another event. Commercial property insurance ensures you receive appropriate compensation if your business suffers from an insured peril.
Professional Liability Insurance – also called errors & omissions insurance, it covers financial losses because of claims and other lawsuits from customers citing dissatisfaction, injuries, suffering, and damages arising from errors, mistakes, or neglect while delivering your services for a fee.
Business Interruption Insurance – provides compensation if your beauty salon closes temporarily due to an insured peril not covered under standard property insurance policies.
Product Liability Coverage – protects your business against liability and damages resulting from the beauty products you make and sell.
Crime Insurance – protects your beauty salon against employee theft or fraud.
How Much Does Beauty Business Insurance Cost?
The cost of beauty business insurance is difficult to measure without knowing the types of coverage you need. The location and your claims history can also affect commercial insurance premiums.
If your beauty salon and equipment are valued higher, your insurance premiums can also be higher as it will be more expensive for the insurance company to insure. In addition, a history of insurance claims can also increase the cost of your beauty business insurance because your business is riskier to insure.
You also need to think about the services you provide since larger risks result in higher insurance costs. Every service comes with a degree of risk. While services like hair cutting and nail treatments are less risky, tanning, skincare treatments, massages, and hair removal are riskier to offer.
Why Do Beauty and Personal Care Professionals Need Business Insurance?
Beauty and personal care professionals can be subject to liability and lawsuits alleging negligence, damage, or misconduct because of the offered services and products. You could also suffer financial losses because of property damage.
Legal defense, medical costs, repairs and replacements, and lost income can become huge financial losses. Business insurance protects your salon against the risks associated with doing business and ensures you can operate confidently.
Other Risks Your Salon Faces and How Beauty Salon Insurance Can Protect You from Them
Risks that are common to the beauty industry include:
- Client injuries at your beauty salon from falls or faulty equipment
- Client injuries or complaints based on services provided at your beauty salon
- Clients’ skin or body reacts adversely to products applied and/or services performed
- Fires, sewage backups and vandalism
- Employee illness or injury
How much beauty insurance should I buy?
The amount of insurance that your beauty business requires depends on a number of factors. The value of your equipment and your location will play a role in the amount of insurance you require. If your location is in any way risky or has hazards associated with it, you may need more coverage.
Also, the type of treatments you offer plays a role in the type and amount of insurance coverage you need. The riskier the treatments you provide, or the higher likelihood of something potentially going wrong, the more coverage you might require.
Finally, if you have a history of insurance claims against your business, you may be required to purchase additional coverage as it will be more expensive to cover your business for the insurance company.
Do mobile beauticians need beauty insurance?
Yes, mobile beauticians require beauty insurance, and it should be specific to their individual operations. Mobile beauticians also face risks, and these are often different from those faced by beauty parlours. As part of a mobile beautician business, travelling from location to location is necessary. As such, mobile beauticians should consider commercial auto insurance for their business.
A mobile beautician could also inadvertently or accidentally cause damage to a client’s home while attending to an appointment. This type of liability risk means they should be protected in the form of proper mobile beautician insurance.
Finally, mobile beauticians also need liability protection against faulty or damaged products and other business risks, similar to beauty business owners.
Will my beauty insurance policy cover beauticians renting chairs?
If someone is renting a chair in your beauty business but is not an employee of your business, then your insurance policy will not cover that beautician. Essentially, someone renting a chair from you in your salon or business is considered a small business in and of themselves. As such, they can be held liable for anything that goes wrong related to their own business practice in the same way that you are responsible for your business. For the beautician renting a chair from you, this would include bodily injury and property damage as a result of their operations within your business and even to your business.
Many salon owners require anything renting space from them to carry their own beautician insurance, which covers their liability. This protects both the beautician and your business and is a good practice to adopt.
Find the Right Beauty Salon Insurance from ALIGNED
We know that as a beauty salon your big or small business tries to save money where it can. Our brokers are not just commercial insurance specialists, we’re advocates who work on your behalf to get you exactly the insurance coverage you need to protect your beauty salon at rates you can afford. Click Here To Get A Quote or contact one of our business insurance experts for information or with any questions you may have.