When you work as a cosmetologist, your business could be affected by a variety of hazards, from clients suffering accidental injuries to disasters that damage your property. Even if you are a booth renter at a salon or spa, it’s important to understand that you could still be held liable in a number of situations. When you purchase business insurance to fit your needs, you can feel confident that your business will be protected from the financial consequences of a costly lawsuit or accident.

What insurance coverage do I need as a cosmetologist?

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

General Liability Insurance

General liability insurance covers incidents of third-party property damage, bodily injury, personal injury, and advertising injury. Since cosmetologists frequently interact with members of the public, general liability insurance is a key coverage. Common accidents such as a client slipping and falling can result in injuries. If a client is injured while at your location or if you accidentally damage their property, you could be held liable. General liability insurance can also include a personal and advertising injury component, which provides coverage for a number of non-physical injuries, including libel, slander, and copyright infringement.

Examples:

• Bodily injury: A client trips on an uneven step in your hair salon and falls, breaking her wrist. Your general liability insurance would cover medical costs as well as legal fees if the client sues.
• Property damage: While coloring a client’s hair, one of your hairstylists accidentally spills bleach on the client’s expensive vintage coat, ruining it. Your insurer would pay for the damages.
• Personal and advertising injury: You create a new online advertisement for your waxing services. Unfortunately, the graphic you used in your ad looks very similar to another salon’s ad, and they sue you for copyright infringement. Your general liability policy would cover the lawsuit and any resulting settlement. 

Product Liability Insurance

Product liability insurance protects your company against claims of bodily injury or property damage caused by products or goods you sell. For cosmetologists who may recommend and sell hair care products, lotions, creams, face masks, or other items for clients to take home, product liability insurance can be an important coverage. If your products end up causing injury or damage to a customer, you may be sued. Product liability insurance can help cover your legal fees and any resulting settlements.

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

Example:

• Your nail salon sells a line of anti-aging hand treatments. When a client uses the treatments, she suffers a severe allergic reaction. If the client sues, your product liability insurance would cover your legal fees and pay any settlement that results.

Commercial Property Insurance

If you own or lease a salon or spa, it’s essential that you have coverage for the value of your building, tools, equipment, and other business property. Commercial property insurance can provide funds to replace or repair your business property if it is destroyed or damaged by a covered peril such as fire, explosion, storm, vandalism, and more. 

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:

• An electric fan short-circuits and causes a fire to break out at your hair salon. The fire damages the building and destroys furniture and equipment. Your commercial property insurance would pay for you to replace items and repair the building.

If you rent booth space from a salon or other location, the salon owner’s commercial property policy may cover your business property. However, salon owners may not want to make a claim on their insurance for someone else’s property. To make sure that your equipment and tools are protected, business personal property coverage can commonly be added as an endorsement in business owner’s policies. 

Business Interruption Insurance

Business interruption insurance, also called business income insurance, covers your business for lost income and operating expenses if you are forced to temporarily close due to property damage from a covered peril. Commonly covered perils include fire, lightning, windstorm, hail, explosion, and vandalism. This can be a crucial coverage if you run a salon, studio, or spa, as these businesses depend heavily on their commercial spaces. While not available on a standalone basis, business interruption insurance can be added to your commercial property or business owner’s policy.

Example:

• Your beauty studio is damaged by a fire and must close for three months while repairs are made. Business interruption insurance will cover the lost profits that your studio would suffer during those three months of closure.

Professional Liability Insurance

When you work as a cosmetologist, there’s a risk that clients could sue you if they are unhappy with your professional services. No matter how well trained and careful you are, there’s always a chance 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 failures, negligence, or errors in your professional services.

Example:

• You use a new type of dye on a client’s hair. The client suffers a severe allergic reaction and sues you for negligence. Your professional liability insurance would cover the lawsuit and any resulting settlement.

Additional Coverages

• Workers’ compensation insurance provides financial and medical benefits for employees who suffer occupational injuries or diseases. Workplace injuries in salons and spas commonly involve slips and falls, sharp objects, or chemical exposure. Repetitive strain injuries are also common. Securing adequate workers’ comp coverage is not only a benefit to your employees, but it’s also required in almost every state.
• Commercial crime insurance provides protection from financial losses related to crimes such as theft, burglary, robbery, forgery, and fraud. While 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.
• A business owner’s policy (BOP) can be a good choice for qualified small and midsize businesses. It combines general liability, property, business income, and extra expense coverage into a single package. BOPs are typically more cost-effective for small businesses than buying each insurance policy separately, and they can help you ensure that you have a wide range of coverage. 

Pricing and Quotes

Pricing for cosmetology 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 cosmetologist 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 cosmetologists:

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

Business Insurance and Coronavirus

COVID-19 has had a major impact on many salon, spa, and beauty studio businesses, and many cosmetologists may be unsure about how their business insurance will handle this situation.

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

Working as a cosmetologist can expose you to a number of potential liabilities, from accidental injury or property damage to clients who sue you because they are unhappy with your professional services. Whether you are a booth renter or own your own salon or spa, it’s critical to purchase a range of business insurance that will protect you and your employees from unexpected events. The financial support business insurance provides will enable your business to continue operating even after a costly disaster or lawsuit.