Finding the right insurance for your massage therapy business is an important step in protecting your business and achieving long-term success.
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As an esthetician, there are many risks that could have an impact on your business, from lawsuits brought by dissatisfied clients to accidental bodily injury or property damage. 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. Purchasing business insurance can protect your business from the financial consequences of a costly lawsuit or accident, giving you peace of mind.
What insurance coverage do I need as an esthetician?
There are many types of insurance coverage to consider, but these policies are particularly relevant to estheticians:
General liability insurance covers incidents of third-party property damage, bodily injury, personal injury, and advertising injury. Since clients regularly visit your location to receive services, this is an important coverage for estheticians. There’s always a possibility that clients could accidentally slip and fall or otherwise hurt themselves. If a client suffers an injury while at your location or if you accidentally damaged 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.
- Bodily injury: A client visits your spa to receive a microdermabrasion treatment. He trips over a lamp and falls, injuring his back. Your general liability insurance would cover medical costs as well as legal fees if the client sues.
- Property damage: You accidentally knock over a client’s coffee and it spills onto the client’s bag, damaging an expensive camera she has with her. Your insurer would pay for the damages.
- Personal and advertising injury: Your company writes a blog post discussing various skin treatments and mentioning several of your competitors. One competitor feels that you have made disparaging and libelous comments about their services, and they sue you for libel. Your general liability policy would cover the lawsuit and any settlement.
Product liability insurance protects your company against claims of bodily injury or property damage caused by products you sell. This is an important consideration if your esthetician business sells products such as lotions, creams, sunscreen, face masks, aromatherapy products, or other items. 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.
- You sell skin care products at your beauty studio. When a client uses one of your face masks, 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.
For estheticians that own or lease commercial property, like a salon or spa, commercial property insurance is a key coverage. If an accident or disaster were to damage your building or equipment, it could be difficult to pay for repairs on your own. Commercial property insurance can cover your tools, supplies, and equipment in the event that a fire or other covered risk destroys or damages them.
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
- You run a skin care studio. An overloaded circuit causes a fire to break out, destroying valuable equipment and damaging your building. Your commercial property insurance would pay for you to replace items and repair the building.
For estheticians that rent booth space from a salon or other location, your business personal property may be covered under the salon owner’s commercial property policy. However, in practice, a salon owner may not want to make a claim on their insurance for someone else’s property. To ensure that your equipment and tools are protected, business personal property coverage is commonly added on as an endorsement in business owner’s policies.
As an esthetician, clients could sue you if they are unhappy with your professional services. Although you are likely careful and conscientious in providing your services, there’s always a chance that you could make an error that injures a client or that a treatment might not have the expected effect. Whether you truly made a mistake or the client simply perceives an error, defending a lawsuit can be costly and time consuming. Professional liability insurance can step in to provide financial protection if you are sued as a result of negligence or errors in your professional services.
- A client experiences an allergic reaction to a product you used during a facial. You are sued for negligence. Your professional liability insurance would cover the lawsuit and any resulting settlement.
A business owner’s policy (BOP) can be a good choice for many 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. Many insurers will add additional coverage, such as professional liability, to a BOP by endorsement. To qualify for a BOP, your company would typically be required to operate from a physical business location, employ fewer than 100 people, and make less than a certain amount in sales per year (typically $5 million, but it can vary based on the insurer).
- Workers’ compensation insurance is legally required for companies with employees in most states. It covers employees’ medical expenses and lost income if they are injured or fall ill on the job. It can also cover funeral expenses and death benefits for an employee’s dependents in the case of a work-related employee death. Workplace injuries in salons and spas commonly involve slips and falls, sharp objects, or chemical exposure.
- Cyber liability insurance can cover financial losses that result from cyber events such as data breaches, hacking, viruses, denial of service attacks, and more. This is an important coverage to consider if your company relies on electronic data or stores personally identifiable information.
- Business income coverage will reimburse you for lost income and operating expenses if your business is forced to close due to a covered peril, such as fire, storm damage, or other property damage. This can be a crucial coverage if you run a salon, studio, or spa and depend heavily on your commercial space.
Pricing and Quotes
Pricing for esthetician insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:
- Business size
- Number of employees
- Claims history
Businesses with higher risks will have higher premiums than those deemed lower risk. For example, an esthetician 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 estheticians:
|Provider||Business Interruption||Business Owner's Policy||Commercial Auto||Commercial Crime||Commercial Property||Cyber Liability||Employment Practices Liability||General Liability||Product Liability||Professional Liability||Workers' Compensation|
Business Insurance and Coronavirus
COVID-19 has had a major impact on businesses providing services to clients, and many estheticians 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.
As you run your esthetician business, it’s important to be aware of the risks that you could face. Business insurance can help your company cope with unexpected disasters, whether it’s a lawsuit brought by an unhappy client, an unexpected disaster that damages your location, or a client injury that happens on your property. Ensuring that your company has a wide range of insurance coverage can help you feel confident, knowing that if a catastrophe occurs, your company will be financially protected.