Even beauty therapists who work out of their homes need adequate insurance because most homeowner’s policies exclude business activities. It simply means if a client is injured or accuses you of professional negligence, you may have to pay the costs out of your own pocket.
Being a beauty therapist means working in close proximity with your clients and being exposed to many things. From a slip or trip in your own salon to a stained carpet in a customer’s home, everyday accidents can cause serious issues for you and your business.
Even though most clients may try to understand when things go wrong, it only takes one to institute a compensation claim that could put your business under serious strain. Even if you think you have not caused them personal injury or damage, they could pursue legal action against you. Facing this without adequate cover can be a complicated and costly affair.
Whether you work from home, are a mobile beauty therapist, or a salon owner, you need adequate insurance to cover you should a customer or other members of the public sue you for injury or damages.
Although it is not a legal requirement, insurance is widely considered imperative within all customer-facing industries. As well as providing you with peace of mind and some security for your business, it also helps you present a professional image.
8 Necessary Insurance Policies for a Self Employed Beauty Therapist
The cost of insurance is not the only thing Self employed beauty therapist should worry about when it’s time to buy insurance. They should also look for policies that cover their specific risks, which is why seeking the advice of an expert is pertinent in this process.
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General Liability Insurance
General liability insurance is known to cover third-party bodily injury, property damage, and advertising injury. It is the core coverage of self employed beauty therapists or even to salon owners because claims from third parties are a common risk.
In addition, general liability is often required for business licenses and commercial leases. General liability usually has products-completed operations coverage to pay for property damage and physical injury caused by defective products or faulty services.
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Commercial Property Insurance
Commercial property insurance more or less covers your business’ physical assets like your salon and the contents within it. For beauty therapists who own their salon, this policy typically pays to repair or replace these assets when they’re damaged by events, such as fire, theft, vandalism, or windstorm.
Salons are also known to get commercial property and general liability insurance at a reduced rate by buying BOPs. Most BOPs also include business interruption coverage, which covers your lost income and ongoing expenses if your salon is forced to close because of a covered event.
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Self-Employment Insurance
For most owners of small salons or self employed Therapist, the business is their primary livelihood – their bread and butter, whether they are just fresh out of beauty school or planning to open up more locations. Having the right salon insurance in place can protect your business and leave you with the peace of mind that a mishap won’t destroy your livelihood.
Self-employment insurance is a type of insurance plan that meets the coverage requirements of your particular business structure. The reason that it is important is that it protects your business from claims of liability from customers, clients, and others.
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Workers’ Compensation Insurance
Workers’ compensation insurance is known to offer benefits to stylists, assistants, receptionists, and other employees of your salon when they suffer work-related injuries or illnesses. It also includes medical bills and lost wages and is required in most states when a business has one or more employees. State law determines coverage, but injuries covered by workers’ comp typically include:
- Occupational injuries such as lung disease caused by breathing in hazardous chemicals
- Traumatic injuries such as a broken wrist after a fall
- Repetitive stress injuries like carpal tunnel from cutting hair
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Commercial Umbrella Liability Insurance
Unlike other policies, commercial umbrella insurance is not necessarily used to protect against a specific risk. However, it adds coverage when other liability policies are not enough. For instance, if your general liability limit is $1 million, but a lawsuit over a customer’s slip-and-fall costs $1.5 million, an umbrella policy pays the additional $500,000. Buying an umbrella policy is usually more cost-effective than adding coverage to your other liability insurance.
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Commercial Crime Insurance
This type of insurance covers financial losses arising from illegal activities like check fraud, theft, and counterfeit money schemes. Note that most policies reimburse policyholders whether the criminals are employees or outside actors.
Salon owners often assume these financial losses are covered in commercial property. Howbeit, property policies often exclude employees’ actions and stolen money, so commercial crime insurance is essential for salon owners who have employees or typically have cash on hand.
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Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, covers your legal fees if a client claims your negligence or mistake caused them financial harm. Be it your fault or not, professional liability insurance helps pay lawyer’s bills, court fees, and judgments or settlements.
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Equipment Breakdown Coverage
Equipment breakdown coverage takes care of losses caused by mechanical failure of nearly any equipment, including tanning beds; computers; and heating, ventilation, and air conditioning (HVAC) systems. Note that this coverage can be purchased as a standalone policy or endorsed onto a property policy.
Many beauty therapists expect their commercial property insurance covers these events, but that policy only pays for damage caused by external sources. Equipment breakdown coverage pays for damage caused by internal sources like power surges and motor burnout.
How Much Does It Cost to Get an Insurance Policies for a Self Employed Beauty Therapist?
The cost of all the insurance policies required by a self employed beauty therapist will depend on the number of policies and coverage amounts selected. Beauty Therapists who only get a BOP pays around $420 to $1,000 annually. However, BOPs don’t cover all the risks these professionals face, so many beauty therapists may opt for additional policies. This can raise their total insurance costs to $800 to $2,200 per year.
General Liability Insurance
- Annual Premium: $350 to $525
- Coverage Amount: $1 million per occurrence, per $2 million aggregate
- Typical Deductible: $0 to $500*
Commercial Property Insurance
- Annual Premium: $300 to $700
- Coverage Amount: Varies based on property value
- Typical Deductible: $500 to $1,000
Professional Liability Insurance
- Annual Premium: $450 to $1,300
- Coverage Amount: $1 million per occurrence, per $2 million aggregate
- Typical Deductible: $500 to $1,000
Self Employed Insurance
- Annual Premium: $1,000,000/$2,000,000
- Coverage Amount: Varies based on property value
- Typical Deductible: $27 to $49
Conclusion
The cost of insurance for self employed beauty therapists is negligible in comparison to the financial fallout just one claim against your activities might cause. Finding a policy tailored to your business’ potential risks is as easy as discussing your situation with a seasoned insurance agent.