Personal care services such as beauty shops, spas, and salons may face a variety of risks and liabilities in doing business. From customer lawsuits to workplace injuries, your business could be caught in a financially distressing situation at any moment. Securing the right business insurance coverage can help protect your company from disaster.

Personal Care Business Insurance Types

General liability insurance can protect your personal care business from accidental third-party injury and property damage. This coverage is crucial for personal care businesses that operate from a commercial or retail space. Accidents and injuries can happen at any moment, no matter how safely you conduct business.

If a customer, partner, or other non-employee injures themselves on your property, they could sue your business for damages. If your personal care business takes appointments at client homes or offices, general liability insurance can provide protection if you accidentally damage any third-party property.

Example:

• You own a hair salon, and a customer who is walking to the hair washing station slips on the wet floor. She hits her head on the side of a sink and must receive medical treatment. Your general liability insurance would provide coverage for her medical expenses as well as any legal expenses if she decides to sue your business.

Product liability insurance protects your business from third-party bodily injury and property damage caused by any products or goods that you sell. Personal care businesses often generate a significant portion of their revenue from the sale of products, from shampoos and conditioners to massage oils. If any of these products end up inflicting injury or damage to your clients, your business may be held liable. Product liability insurance can provide the financial backing to defend against any resultant third-party lawsuits.

Product liability insurance is usually covered under the products and completed operations section of a standard commercial general liability policy. Standalone product liability policies are available for those businesses with higher risk profiles.

Example:

• Your hair salon sells its own branded line of products, including shampoo, conditioner, hair gel, and hairspray. One of your customers alleges that your hairspray caused severe burns on her scalp. She sues your business for damages. Your product liability insurance would provide coverage for any legal proceedings and judgements.

Professional liability insurance protects your personal care business from lawsuits alleging negligence or failures in your professional services. For many personal care businesses, this is a must-have coverage as many of the services involve physically close contact with clients. From massages to hair care, a mistake or poor decision by you or one of your employees could lead to injury or trauma for your client. Professional liability insurance can provide coverage for any lawsuits related to your services.

Example:

• A client of your massage therapy business claims that a massage you gave him aggravated an old back injury, causing him severe pain and requiring him to receive emergency medical treatment. He sues your business for damages. Your professional liability insurance would provide coverage for the lawsuit.

Commercial property insurance protects the value of your business property from damage due to covered perils, commonly including fire, windstorm, vandalism, explosion, water damage, and more. Most personal care businesses own or lease commercial space, and property insurance is a vital coverage that may often be required by landlords. If your building or personal property are damaged, commercial property insurance can pay for repair or replacement. This coverage is especially important if your business owns inventory or equipment that would be costly to replace, like massage tables or salon chairs.

Example:

• A gas pipe explosion in a nearby building causes a fire that spreads to the day spa you own. The fire destroys part of your building, including all of your furniture and spa equipment. Your commercial property insurance would provide the funds to repair your building and replace the damaged furniture and equipment.

Commercial crime insurance protects your business from financial losses caused by crime such as theft, burglary, and fraud. Customers of personal care businesses often pay in cash, as tipping is a common occurrence. Because of this, personal care businesses may be targets of theft, both from outside parties and internal employees. Commercial crime insurance can provide coverage against these risks and provide a financial cushion for crime-related losses.

Example:

• You recently discovered that a long-time employee at your nail salon who was tasked with accounting for each day’s revenue has been slowly stealing cash over the last three years. The total amount stolen is in excess of $50,000. Your commercial crime insurance would provide coverage for the losses.

Workers’ compensation insurance provides medical and financial benefits for employees who suffer occupational injuries or diseases. While personal care businesses are not necessarily physically dangerous environments, employees may be more likely to suffer from repetitive stress injuries or workplace accidents. If an employee is unable to work because of a work-related injury or illness, workers’ comp can provide the employee with funds for medical treatment as well as a portion of lost income while the injured employee is in recovery.

Example:

• An employee at your blow dry bar severely burns her hand on a straightening iron. She requires medical treatment and is unable to work for a few weeks. Workers’ compensation insurance would pay for her medical expenses and a portion of her income while she is unable to work.

A business owner’s policy (BOP) bundles general liability, commercial property, business income, and extra expense coverage together into a single policy. For qualified small businesses, BOPs can be a convenient way to purchase a broad range of coverage. Premiums for BOPs are also generally lower than if you were to buy each policy separately. In order to qualify for a BOP, insurers typically require that your business have less than 100 employees, make less than $5 million in annual sales, and operate from a physical location or office. 

Additional Insurance Coverage

• Bailee’s customer insurance can cover your business for losses to customer property that is in your care, custody, or control. For personal care businesses, this may include items such as customers’ personal property that is put in storage temporarily at a spa or a hair salon’s temporary possession of a client’s custom hairpiece or wig.
• Business income insurance, also known as business interruption insurance, can provide coverage for your business if you need to temporarily close due to property damage. Commonly added as an endorsement to commercial property insurance, business income insurance is critical for personal care businesses that depend on their commercial spaces. If your salon or spa is forced to close due to a covered peril, business income insurance can cover you for lost income and operational expenses.
• Hired and non-owned auto insurance can provide protection from liability in case you or an employee causes an accident while operating a personal vehicle for business purposes. If your business provides personal care services to clients in their homes or offices, this coverage can be critical if your employees are using their own personal vehicles.

Insurance Coverage for Your Employees

Business insurance is not only crucial in protecting the financial viability of your company, but it is also important for providing your employees with some financial security. Employer-sponsored group insurance plans can provide your team with financial assistance during tough times, giving them peace of mind knowing their employer has their backs. These insurance plans can also help your company attract talent, as generous benefits can be a key part of a compensation package.

Group health insurance helps your employees pay for medical and healthcare expenditures, including everything from primary care to hospitalizations and surgeries. Offering health insurance to your employees can not only keep your employees in better health, but it can also help to retain your employees. In the personal care services industry, health and well-being are top of mind, and many prospective employees will be looking for health coverage as part of a compensation package.

Group life insurance provides a financial payment to an employee’s family or other survivors if the employee unexpectedly dies. The death does not have to be work-related. Although individuals can purchase life insurance on their own, as an employer-sponsored group, you can usually obtain better rates than an employee could get on their own.

Group disability insurance provides income to employees who cannot work as a result of non-work-related injuries.

What personal care businesses need insurance?

Personal care businesses all stand to benefit from insurance coverage and, in fact, many states require these businesses to carry minimum levels of liability insurance. Accidents and mistakes can happen to anyone, no matter how careful or prepared you may think you are. If a client slips and falls on your business premises or an employee injures a customer, your business could be in dire financial straits if faced with a lawsuit. 

Additionally, any number of natural disasters or unfortunate events could befall your business property, from theft to wildfires. Business insurance can provide your business with the financial backing to withstand lawsuits or catastrophes, giving you peace of mind and allowing you to focus on what’s really important—growing your business and making it successful.

If your personal care business meets any of the following criteria, you should consider purchasing business insurance:

• You provide professional services or recommendations
• You sell products or goods to customers
• You own or lease office or retail space
• You work at customer homes or offices
• Your business owns valuable property, such as specialized salon equipment
• You employ others

Commercial insurance can cover a wide variety of personal care businesses. Some common businesses and professions that need insurance include:

Choosing an Insurance Company

The first step in acquiring insurance for your personal care business is finding the right insurance company to partner with. Below, we’ve highlighted a few of our trusted insurance partners, who offer a variety of coverage suitable for personal care businesses. We’ve also included a few factors that are important for your business to consider when evaluating insurers.

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

Financial strength. While you may think getting the best-priced policy should be your main goal, it is more important to ensure you purchase insurance from a financially stable provider. It’s worth remembering that insurance claims are paid directly from the finances available to the insurance company. In other words, if the insurance provider is financially stable, they will be able to fulfill their claims commitment. When an insurance company does not have financial stability, it may collapse and be unable to support you.

While this is rare, it does happen. You want to know your company is always secure and certainly don’t want the surprise of finding out your insurance provider cannot cover your losses when you make a claim.

Of course, this leads to the obvious question: How do you know your insurance company has financial strength? Unfortunately, it is not as simple as just purchasing a policy from the biggest industry names because even giant insurers go through periods of financial instability. Luckily, there are rating agencies that grade insurance companies in terms of their financial strength. Some of the major rating agencies are Fitch, Standard & Poor’s, AM Best, and Moody’s.

Price. Cost is important for any business, but the price of insurance is not the only factor. Instead, your personal care business will be better served by looking for the policy that is the most affordable but also meets all your requirements.

Different insurers have different methods for determining the premium you will pay, although there are some industry standards. For insurance companies, pricing is all about determining how much risk your business presents. The key to finding the best deal that meets your company needs is to shop around. Speak to insurers, use online quote engines, and work with brokers to ensure you get the coverage you require to protect your business.

Customer service. While you want your insurance provider to be financially stable and priced competitively, it is also important that you can engage with the company. It is possible you will need to make a claim, change policy details, or update personal information. In these cases, you want to deal with a company that has good customer care. While most major carriers have good customer service records, some spend more time and effort on ensuring their customers are taken care of. This may seem unimportant, but dealing with welcoming, qualified, and thoughtful professionals will be vital during a claims process.

Final Word

Running a personal care business can be a rewarding experience, as much of your work involves helping others enjoy themselves—whether through a relaxing massage or a fashionable new hairdo. In order to ensure that your business will be around to help your clients for years to come, you should consider investing in business insurance as part of a broader risk management strategy. Taking the time now to minimize your business’s exposure to risk, be it lawsuits or natural disasters, can pay dividends in the future. You, your employees, and your clients will all benefit in some way from making sure your business has comprehensive insurance coverage.