Different types of liability insurance provide coverage for different kinds of claims. While every hair and beauty salon is different, there's a good chance you'll need several of these options — if not all of them — to receive comprehensive coverage.
General liability insurance: Professional stylists take great care to maintain their tools and keep a clean workspace, but there's always a chance a customer could slip and fall, or receive a chemical burn or other injury. General liability insuranceprotects your salon against such accidents, helping to cover medical and other costs a customer may incur.
Professional liability insurance: This is different from general liability insurance but just as important to have in such a customer-focused industry.Also known as errors and omissions insurance (E&O), professional liability protects from claims and lawsuits that result from mistakes a stylist may make.
For example, a client receives a haircut at your salon to prepare for their wedding. The wedding goes poorly, and the client believes that the quality of the haircut is the reason they experienced all that distress. If this client decides to sue, professional liability insurance will cover your legal fees and other associated costs.
Business owner’s policy: Many insurance agencies offer a package called a business owner’s policy (or BOP for short) specifically tailored for small- to medium-sized salons and spas.
BOPs provide a combination of general liability insurance and property insurance, which can cover your building, styling equipment like razors and shampoo stations, and other property you may use during the course of business. Property insurance can help protect against fire, flood, theft, or other events.
Additionally, purchasing a BOP can often provide discounted rates compared to purchasing individual general liability and property insurance plans.
Workers' compensation: While many of the above plans are specific to customers or your property, workers' compensation (also known as workers' comp) is insurance that is specifically meant for the employees of your salon.
If a stylist gets injured or sick while working, workers’ comp ensures that they receive any benefits or lost wages that may result, regardless of fault. Injuries and ensuing losses sustained off the job, however, are not covered by workers' comp.
Most states require providing some form of workers' comp to your stylists in order to legally operate a salon or spa. Every state has different rules around what workers' compensation packages you need and what they cover.