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When starting a salon there are plenty of items to think about, from what services you offer to which staff you hire. Building a business from the ground up is a great deal of work and effort, but some business owners may not pause to think about how to protect what they’ve worked so hard to earn. Salon insurance protects aspects of your salon to mitigate the risks associated with running your business. But not all insurance is the same. Depending on your risks and risk appetite, finding the right insurance may prove difficult.
Who Needs Salon Business Insurance?
Any salon can benefit from insurance, whether it's a barber, beauty salon, hair salon, nail salon, or any other type of salon under the realm. Chairs, staff, patrons, assets; all these aspects of a salon could be at risk at any point during the course of business, which is where insurance comes in handy - to protect what you’ve built.
What Insurance Does a Salon Business Need?
The type of insurance your salon may need certainly depends on a variety of factors. In the service realm are you offering any risky type of services that could injure customers? Location wise, are you in a flood zone, or maybe susceptible to power loss and other business interruptions. How about employees, are you covered from that aspect?
The nature of the business needs to be evaluated in order to select the right type of protection. To start it is important to understand what types of insurances exist for salons.
- General Liability Insurance: covers your business from general financial loss due from damages caused by your business
- Commercial Property Insurance: covers your physical location and assets from loss such as a fire
- Business Owners Policy (BOP): As a baseline a BOP covers liability generally associated with running a salon such as harm to patrons and general liability. These policies vary in price but owners can expect starting prices to begin at $175 per month.
- Workers’ Compensation: If you employ persons to run your salon and these employees hurt themselves on the job, workers compensation insurance would be a great idea as it will pay the employees as they take their mandatory time off.
- Professional Liability Insurance: Professional liability protects professionals, such as salon business owners, from errors and omissions in the course of running their business.
- Product Liability Insurance: If you’re applying products to customers in the course of running your salon you may consider this insurance type. This insurance covers any damages from the products you utilize in your business
- Commercial Auto Insurance: similar to personal auto insurance, covers employee drivers and company vehicles
- Business Interruption Insurance: covers peril suffered from interruptions to your business such as tornadoes or possibly pandemics
- Umbrella Insurance: Umbrella insurance does exactly what it sounds like, creating an umbrella of protection in addition to the other insurances your business utilizes. If you run out of coverage on your main policy, your umbrella would come in and continue to insure the owner.
Why Does a Salon Business Need Insurance?
Investing in the right insurance for your salon is more than simply finding the cheapest policy. Owners could be thoughtful in understanding their business, the risks which may create liability, and create a plan to mitigate those risks. Without insurance owners may be exposed to large liabilities and costs associated with mitigation.
How Much Does Salon Business Insurance Cost?
Factors that Affect Salon Business Insurance Cost
There are many factors which go into pricing a policy, the best way to determine the cost for your scenario is to speak with insurers and determine quotes across competitors
How Much Does General Liability Insurance for a Salon Cost?
According to Insureon, general liability insurance for a salon median cost was $991 annually, or $82.50 a month.
How Much Does Commercial Property Insurance Cost for a Salon?
Many factors can play into this cost such as location and size of your salon, however an estimated annual premium can range from $300 to $700 according to Hiscox.
How Much Does Salon Workers’ Compensation Insurance Cost?
A median cost from Insureon finds the cost of workers compensation insurance at $1,192.00 annually or almost $100.00 per month. This will vary based on how large the workforce is and how much coverage you’d like to benefit from.
How Much Does Professional Liability Insurance Cost for a Salon?
According to Fit Small Business, a professional liability policy for a salon can range from $600.00 to $2,000.00 annually and provide up to $1 million in coverage per instance.
How Much Does Salon Business Insurance Cost Per Month on Average?
An owner who would look to purchase all these policies may find costs starting from $1,080.00 per month, however it's important to note that when shopping for policies, insurance providers may offer discounts for bundling many coverage types, or even offer unique packages that fit your business.
Where Can You Get Salon Business Insurance?
It is hard to determine who is the best versus worst at insuring beauty salons as there are so many attributes which feed into the process; what their policies cover, to what degree they can bundle, or how much risk they're willing to take on for the price. While results, pricing, and level of service vary from competitor to competitor, a few common options can be found below.
Tips for Picking the Best Salon Business Insurance Company
- A rule of thumb when shopping for insurance has been said to be to shop for the best claims process. A claim is when you need to activate your insurance and protect yourself. The last thing you want to experience in the face of liability is an insurer who is no longer as friendly to work with.
- Be sure to be sure that your menu of services at your salon also fit the mix of insurance that is currently protecting you. If you were to add new lines of services, new products, or new employees, is your policy still active and providing the expected coverage? It is important to take pause and ensure that your coverage is always more than what's needed rather than less.
- A salon business loan can assist salon owners in covering crucial startup expenses, including salon insurance, with the available funds.
How Do I Get Salon Business Insurance?
A typical approach that could be seen for a salon owner to insure their salon can be found below, however each business is unique and this list only serves as directional steps:
- Understand your businesses risks and exposures
- Understand what type of coverage you think is best based on these risks
- If possible, ask other salon owners what type of coverage they have
- Once you understand the policies you want to purchase approach several insurers
- Understand their costs, claims process, and coverage details such as max coverage
- Once you have found an insurer, purchase the policy, or policies
- Annually review your insurance footprint and understand if you need more or less coverage
Final Word
It is something you never want to use but always want to have. Insurance covers a variety of aspects of any business and it's up to owners to understand what types of insurance they need, protect what they have built, and continue to maintain this risk structure they have built for their business. While it will take some work up front for salon owners to get in place proper protection, it is a move that may pay dividends in the future if something were to happen.
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