Beauty professionals work in numerous environments. You may own a salon or spa, rent a chair, or visit clients at their homes. In each instance, you face risks and liabilities that could result in a loss or lawsuit and cause you significant financial strain or bankruptcy.
You can mitigate the unfortunate circumstances that arise from running a beauty business with insurance. Specifically, this article discusses four types of coverage to help you understand the risks of your business and how you can prevent them from draining your funds.
General liability insurance
General liability insurance usually covers lawsuits affiliated with property damage or personal injury. Specifically, it covers instances unrelated to your services or where you’re not directly involved. If, for example, a chair at your salon suddenly breaks and injures a client, you may not have directly caused the injury, but you may still be liable. In this case, general liability coverage could take care of any legal fees and damage awards on your behalf.
Even if you don’t own a spa or salon, general liability insurance remains essential. You can face liabilities when renting a chair if a cord you’re using causes someone to trip and fall, for example. The shop you’re renting the chair from may not have an insurance policy that covers you, so any lawsuit by a client or third party could be in your own hands. Further, if you visit a client’s home to provide beauty services, a general liability policy could cover any property damage if, for instance, you break their expensive vase.
Professional liability insurance
Professional liability coverage insures you against property damage or injuries that result from negligent services. If you provide waxing treatment to a client, and the wax burns and injures them, they may sue you for any injuries that result. But a professional liability policy could cover any legal fees or damage awards that come from such a situation.
Even if you weren’t negligent, clients could still throw frivolous actions at you, which require legal help. Professional liability insurance would cover these related legal fees, as well.
Product liability insurance
While general and professional liability insurance are common to any business, product liability coverage is more specific to beauty professionals. While you primarily generate income from services, your salon or spa may also sell products.
Product liability insurance protects against claims from clients and customers that allege the products you used during treatment or that you sold to them caused injury or property damage. These damages could result from poor design or manufacturing or due to incorrect or a lack of warning labels.
Imagine you recommend a particular shampoo to a client after their hair appointment. When the client goes home, they experience an allergic reaction due to the shampoo. While they could sue the company that developed the shampoo, they may further sue your business to increase their chances at a damage award. In this instance, product liability insurance would cover the legal fees. If you’re additionally found liable for the client’s injuries, the coverage would also pay for the damage award.
Commercial property & business interruption coverage
Commercial property and business interruption insurance may come as a separate or combined policy. Commercial property coverage generally protects your storefront and can further protect the content of your space, such as equipment or furniture. So, if a fire burns down your store or there’s a flood, commercial property insurance can pay for the repairs and replace your chairs, chemical products, styling equipment, and more.
If such a fire or flood causes your business to close its doors for several days, business interruption insurance can compensate for lost revenue and additional expenses. Such a policy can help retain employees by allowing you to pay their salaries until your business reopens. A business interruption policy would further cover rent, utilities, and your own salary.
Beauty professionals face significant risks in managing their business. The proper general, professional, and product liability insurance, as well as a commercial property and business interruption policy can mitigate these risks. This can bring peace of mind knowing you’re protected from unforeseen circumstances.