When you run a barber shop, it’s important to be prepared for the risks that your business could face. Unexpected events such as fires or accidental injuries are common and could have a major effect on your finances. Purchasing business insurance is a great way to help you financially protect your company from costly disasters, accidents, or lawsuits.

What insurance coverage do I need for my barber shop?

There are many types of insurance coverage to consider, but these policies are particularly relevant to barber shops:

Commercial Property Insurance

Commercial property insurance covers the value of your property, including rented or owned space, tools, supplies, and equipment. If a fire or other disaster damages or destroys your barber shop, it can be difficult and expensive to recover. Commercial property insurance will provide funds to help you repair or replace damaged property. 

Commercial property insurance covers the following:

• Buildings belonging to or leased by your company
• Contents of the building, including furniture, equipment, and inventory
• Property of others while it is under your care, custody, or control

Example:

• Lightning strikes your barber shop, causing a fire to break out. The fire damages your building’s roof. Your commercial property insurance would pay for repairs.

Business Interruption Insurance

Since barber shops rely heavily on commercial spaces, it’s a good idea to consider how your business would handle the situation if property damage forces you to close. Business interruption insurance—also called business income insurance—will reimburse your business for lost income and operating expenses if you are forced to temporarily stop operating due to property damage from a covered peril. Commonly covered perils include fire, lightning, windstorm, hail, explosion, and vandalism. Business interruption insurance can be added to your commercial property or business owner’s policy.

Example:

• During a storm, a tree falls on your barber shop’s roof, severely damaging both the roof and a supporting wall. You must close your shop for six weeks while repairs are made. Business interruption insurance will cover rent payments, employee salaries, and lost profits while you are unable to operate your business.

General Liability Insurance

General liability insurance covers your business from incidents of accidental third-party property damage, bodily injury, personal injury, and advertising injury. This is a key coverage for barber shops since many clients visit your establishment to receive services. Even if you keep your environment as safe as possible, there’s always a possibility that an accident will happen, and if you unintentionally damage a client’s property or they suffer an injury, you could be held liable for damages. 

Examples:

• Bodily injury: One of your clients gets up to go to the restroom and slips on hair clippings on the floor. He falls and fractures his wrist. Your general liability insurance would cover medical costs as well as legal fees if the client sues.
• Property damage: One of your barbers accidentally spills water onto a client’s brand new phone, damaging it. Your insurer would pay for the damages.

Product Liability Insurance

If your barber shop sells hair products or other retail items, it’s a good idea to make sure you have product liability insurance. This coverage protects your company against claims of bodily injury or property damage caused by products you sell. If your products end up causing injury to a customer, you may be sued. Product liability insurance will provide funds to cover your legal fees and any resulting settlements.

Product liability insurance is typically covered under the products and completed operations section of a standard commercial general liability policy. Standalone product liability insurance policies are also available for more high-risk businesses.

Example:

• After a haircut, your client purchases a bottle of your barber shop’s proprietary hair gel. When the client uses the product at home, it causes a severe allergic reaction. If the client sues, your product liability insurance would cover your legal fees and pay any settlement that results.

Professional Liability Insurance

When you run a barber shop, there’s a risk that clients could sue you if you make a mistake or they are dissatisfied with your services. Although you’re likely highly trained and careful in your work, it’s still possible that you could accidentally hurt a client or give them a service that doesn’t meet their expectations. Professional liability insurance can provide financial protection if you are sued as a result of alleged failures, negligence, or errors in your professional services.

Example:

• A number of clients who recently got their hair cut at your barber shop all developed cases of head lice. They believe your barber shop is at fault and sue you for negligence. Your professional liability insurance would cover the lawsuit and any resulting settlement.

Commercial Crime Insurance

Commercial crime insurance provides protection from financial losses related to crimes such as theft, burglary, robbery, forgery, and fraud. Since barber shops often accept payment in cash, are open to the public, and may have high employee turnover, they can have higher exposure to crime.

It’s important to understand that most commercial property insurance policies do not cover losses from crimes committed by employees and offer limited coverage for losses from crimes committed by other third parties. Commercial crime insurance can provide the protection your business needs from crime-related losses.

Example:

• After noticing discrepancies in your cash register, you realize that one of your employees has stolen $2,000 over a period of months. Your commercial crime insurance would cover the loss.

Workers’ Compensation Insurance

Workers’ compensation insurance provides financial and medical benefits for employees who suffer injury or illness as a result of their work. Common workplace injuries at barber shops include slips and falls, injuries from scissors or other sharp objects, and exposure to chemicals. Repetitive strain injuries are also common.

Workers’ comp will pay for medical expenses, lost income, and rehabilitation for injured workers, and will provide death benefits and funds to cover funeral costs in the case of a work-related death. Workers’ comp coverage is legally required for companies with employees in most states, and penalties can be severe if you do not have adequate coverage, so it’s important to make sure that you are complying with state laws.

Example:

• One of your barbers accidentally stabs himself with a pair of scissors and needs stitches. Your workers’ compensation insurance would pay for his medical expenses and a portion of his lost income if he is unable to work for a time.

Additional Coverages

• Qualifying barber shops may choose to purchase a business owner’s policy (BOP), which can be a cost-effective way to achieve a broad range of coverage. Designed for small and midsize businesses, a BOP combines general liability, property, business income, and extra expense coverage into a single package. BOPs are typically less expensive for small businesses than buying each insurance policy separately.
• Bailee’s customer insurance covers the property of clients while it is in your care, custody, or control. Your barber shop may need this coverage if you hold clients’ personal items while they are receiving services.
• Employment practices liability insurance (EPLI) protects your business against lawsuits by prospective, current, or former employees accusing your business of wrongful treatment such as discrimination, harassment, or other employment-related issues.

Pricing and Quotes

Pricing for barber shop insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a barber shop with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for barber shops:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Business Insurance and Coronavirus

COVID-19 has had a significant effect on barber shops and those businesses offering hair care services. Many states have required barber shops to shut down temporarily or allow only limited capacity, and it’s unclear when business may return to normal. Given the circumstances, many shop owners are looking toward their insurance policies for potential relief.

In the majority of cases, business interruption insurance policies you have in effect will not cover losses caused by coronavirus. These policies typically only cover losses caused by a direct physical loss or damage, like a fire or theft. Some business interruption policies will include coverage for losses caused by “communicable or infectious diseases,” but this is rare.

How workers’ compensation insurance handles coronavirus cases varies widely depending on the state. If you have employees who catch coronavirus as a result of their work, they may be eligible for workers’ compensation payments in some states.

If your business continues operating and a client or other third party sues you claiming that they contracted coronavirus after visiting your business, some commercial general liability policies will provide coverage, depending on your individual policy and the laws of your state.

You cannot purchase a new policy to cover coronavirus-related losses because insurance policies will not cover losses that have already been discovered.  

Consult our FAQ on coronavirus and business insurance for more information.

Final Word

As you plan your business insurance coverage, it’s important to be aware of the unpredictable incidents that could arise when you operate a barber shop. Whether it’s a lawsuit brought by an injured customer, a fire or storm, or a burglary, it can be difficult to continue running your business after an unexpected disaster. Ensuring that you have a wide range of business insurance can give you peace of mind, knowing that if a catastrophe occurs, your company will be financially protected.