When you run a nail salon, it’s essential that you protect your business from the risks that could affect it, from disasters such as a fire or storm to a lawsuit brought by an injured client. Without business insurance, an unexpected incident could be a severe financial burden on your nail salon, or even put it out of business. Securing comprehensive insurance coverage can provide invaluable financial protection. 

What insurance coverage do I need for my nail salon?

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

General Liability Insurance

General liability insurance covers incidents of accidental third-party property damage, bodily injury, personal injury, and advertising injury. Nail salons typically see a high number of clients on a daily basis, making general liability insurance a key coverage for them. If a client is injured while at your location or if you accidentally damage their property, you could be held liable. No matter how careful you are, there’s always the potential for an unexpected accident. General liability insurance can cover you for any medical costs, legal fees, or damages in the event of a third-party injury or lawsuit.

Examples:

• Bodily injury: One of your clients trips on a loose entry mat in your salon and falls, badly spraining her knee. General liability insurance would cover medical costs as well as legal fees if the client sues.
• Property damage: One of your nail technicians accidentally knocks over a vase and the water spills on a client’s bag, damaging the client’s laptop beyond repair. Your insurer would pay for the damages.

Product Liability Insurance

Many nail salons sell retail items such as skin care products, aromatherapy oils, lotions, creams, face masks, and other products. It’s important to be aware that you could be held liable if your clients suffer property damage or bodily injury caused by the products you sell. If you are sued due to damage or injury your products have caused, 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 aromatherapy hand lotions with customizable essential oils added. When a client takes the lotion home, 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 commercial space for your nail salon, it’s crucial that you have coverage for the value of your building, tools, equipment, furniture, and other business property. If a fire or storm damages your nail salon, it can be difficult and costly to rebuild and replace expensive items such as pedicure chairs. 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:

• Vandals break your windows and paint graffiti on your walls. Commercial property insurance would pay for you to replace the windows and have the graffiti removed.  

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. Since nail salons cannot easily move operations to another location, this coverage can help you stay in business while repairs are completed. Business interruption insurance can be added to your commercial property or business owner’s policy.

Example:

• After a fire breaks out in your nail salon, you must close the shop for three months while repairs take place. Business interruption insurance would cover your lost profits, employee salaries, and rent payments. 

Professional Liability Insurance

When you run a nail salon, there’s a risk that clients could sue you if they are unhappy with your professional services. For nail salons, there is a risk of bacteria or fungus outbreaks and accidental cuts that may lead to infection. You can reduce the likelihood of lawsuits by maintaining a scrupulously clean environment and making sure that your nail technicians are well trained and professional, but there’s still a possibility that a mistake could be made or a client could believe there is a connection between your services and an injury—even if you were not at fault. 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:

• Several clients who received pedicures at your nail salon developed bacterial infections that required medical attention and caused lasting scarring. They believe they contracted infections from improperly disinfected pedicure spas at your salon and sue you for negligence. Your professional liability insurance would cover the lawsuit and any resulting settlement.

Workers’ Compensation Insurance

If your employees are injured or fall ill in the course of their work, workers’ compensation insurance will pay for medical expenses, lost income, and rehabilitation costs. Workers’ comp also provides death benefits and funds to cover funeral costs in the case of a work-related death. For nail salons, workers are at risk for common slip-and-fall injuries, repetitive strain injuries, and chemical exposures. 

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:

• When a nail technician is filing a client’s acrylic nails, a piece of acrylic flies off the nail and hits the nail technician in the eye. The nail technician requires medical attention. Workers’ compensation would cover medical expenses and a portion of lost income until the nail technician can return to work. 

Additional Coverages

• A business owner’s policy (BOP) can be a good choice for many qualifying nail salons. It combines general liability, property, business income, and extra expense coverage into a single package. BOPs are typically more cost-effective for small and midsize businesses than buying each insurance policy separately, and they can help you ensure that you have a wide range of coverage.
• Commercial crime insurance provides protection from financial losses related to crimes such as theft, burglary, robbery, forgery, and fraud, committed by both outside parties and internal employees. Given the heavy use of cash in nail salon businesses, crime insurance can be a good idea to cover employee theft or robberies.
• 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 nail salon 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 nail salon 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 nail salons:

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 nail salons, with many states requiring them to shut down temporarily. It’s unclear when business may return to normal, and nail salon owners may be 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

Operating a nail salon can expose you to a number of potential liabilities, from accidental property damage or injury to clients who sue you because they are unhappy with your professional services. It’s important to prepare yourself and your business for these possibilities by obtaining a wide range of insurance policies. The financial support business insurance provides will enable your business to continue thriving even after a costly disaster or lawsuit.