Do you need insurance coverage as a self employed hairdresser? If YES, here are 9 best insurance policies for mobile hairdressers working from home. Hairdressers who work out of their homes will likely need hair salon insurance because most homeowner’s policies exclude business activities.
This means that if a client is injured or accuses you of professional negligence, you may have to pay the costs out of your own pocket. BOPs are an easy solution for this predicament. A self-employed hairdresser typically needs at least four business insurance policies.
The two most common are general liability and commercial property, which most owners can bundle into a BOP. Additionally, hair dressers with employees need workers’ compensation insurance in most states, and they should consider professional liability coverage in case they are accused of negligence.
Hairdressers and hairstylists, even licensed ones, can be sued in the normal course of business– even if you have done nothing wrong. Anything from a bad haircut or dye job, to causing physical injury to the client leaves you vulnerable to a liability lawsuit. If you work in this industry and run a small business, your best solution is to protect yourself with hairdresser insurance policies listed below.
9 Best Insurance Policies for Self Employed Hairdressers
Table of Content
1. General Liability Insurance
General liability insurance – sometimes called commercial general liability (CGL), protects your business from another person or business’s claims of bodily injury, associated medical costs, personal injury and damage to property.
Sometimes, claims and lawsuits are brought against hairdressers for reasons that have nothing to do with cutting hair or applying a specific beauty treatment. Injuries and damages can occur in any small business setting, and hair salons are certainly no exception. Having this kind of coverage is beneficial in several instances.
- Personal injury: A hairdresser makes disparaging and untrue remarks about one of their clients to a friend. The client turns out to be a coworker of the friend and the conversation gets back to the client, who sues the hairdresser for slander. General liability insurance could protect the hairdresser against third-party claims of slander, property damage, bodily injury, and associated medical costs.
- Bodily injury: A hairdresser welcomes a client for her regularly scheduled hair coloring. While her hair is being shampooed, she makes a jerking movement upward and hits her head on the porcelain sink. The client temporarily loses consciousness and has to be taken to the emergency room. General liability insurance may protect against claims by other people for personal injury and property damage.
- Property damage: A client brings in their laptop and an employee accidentally trips over it and breaks it. A general liability policy may cover the subsequent claim, up to your policy’s limits of liability.
2. Commercial Property Insurance
Commercial property insurance protects your business’ physical assets, such as your salon and the contents within it. Policies typically pay for damage to these assets caused by fire, theft, vandalism, or extreme weather. Theft is one of the greatest risks small businesses face, so property insurance is a must for salons in most locations.
Most salons qualify for a business owner’s policy, which combines commercial property with general liability insurance at a reduced rate. BOPs also include business interruption coverage. If your salon is forced to close because of a covered event, business interruption covers your lost income and ongoing expenses during the closure.
3. Employers Liability Insurance
Whether you are running a salon or a mobile and freelance business, you know if you employ staff, the very last thing you want to have weighing on your mind is your staff being injured whilst on the job.
And it’s not only because of the potential dent to your profits while they are out of action – it’s the potential for a compensation claim that could cost you tens of thousands of pounds, if not more, if someone were to be seriously injured as a result. This is where your employer’s liability insurance cover steps in.
It acts as a buffer for these types of claims, as well as a range of others, so that instead of having to find the money to pay the claim out of your own pocket, your policy will cover it and your insurer will pay out the incurred costs on your behalf – freeing you up to spend a little less time worrying about what the future may hold, and a bit more time on running your business and making it a success.
4. Professional Liability Insurance
Professional liability insurance – sometimes called errors and omissions insurance (E&O insurance), is an insurance coverage for claims against businesses that provide professional and personal services, such as hairdressing businesses. When is it important to have professional liability insurance for hairdressers? There are many answers, but here are a couple common examples that industry professionals can relate to:
- Lost wages: A hairdresser is coloring a client’s hair and leaves the treatment on for too long, which results in scalp burns and damage to the hair itself. The client sues for emotional distress, bodily injury and loss of wages because she is unable to work for several weeks. Professional liability insurance may protect you if such a claim is made.
- Loss of personal information: By mistake, a hairdresser’s assistant misplaces a file with sensitive client information. It is an accident of course, but the information is compromised nonetheless. If the client files suit, it can cover claims subject to your limit of insurance.
- Protection even if you haven’t made a mistake: A client lies about your alleged malpractice, even though you did nothing wrong. Still, when she brings an action against you, you are still expected to hire a lawyer to defend yourself. In such a scenario, it would protect your business for covered claims and related attorney costs subject to the limit of your policy.
Note that even the most skilled and creative hairdressers can face claims and lawsuits because of how a client’s hair or skin reacts to a treatment. In addition, hairdresser insurance is also useful since you handle client data and personal information on a regular basis.
Commercial auto insurance covers repairs and related lawsuits when a vehicle used by your salon business is involved in an accident. Most states require a minimum of liability coverage for business-owned vehicles to pay for damages you cause others, but policies can also include coverage for damage to your cars and any vehicles your business rents, hires, or borrows.
Say you send an employee to pick up beauty supplies. If the employee is in an accident, you can be held liable for damages to their car as well as damage they cause others. Commercial auto insurance with hired and non-owned auto coverage can pay for the damage. Hairdressers who don’t have business-owned vehicles can sometimes add hired and non-owned auto insurance to their general liability policy.
6. Product liability insurance
Whether you work in the hair, beauty, holistic, health or fitness industry, you know that not all accidents are just down to slips and trips.
Whether you operate a salon or freelance business, when you sell or supply products to clients as part of your treatment, therapy or service, there is always a chance that the product might be faulty and cause injury or damage to a client’s property. And when that happens, the client won’t go to the manufacturer – they’ll go to you. This is where product liability insurance comes into play.
It provides cover for your business against damages awarded if a product that you make or supply causes personal injury to a customer, member of the public or their property. In these circumstances, your products liability insurance would cover the costs of the claim, as well as paying out any legal fees. This ensures that you are protected, no matter what the outcome.
Commercial umbrella insurance extends the limits on underlying salon liability insurance policies in increments of $500,000 or $1 million. Unlike other policies, umbrella insurance is not used to protect against a specific risk. Instead, it adds coverage when other liability policies are insufficient.
For example, 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.
8. Commercial Crime Insurance
This insurance covers financial losses stemming from illegal activity such as check fraud, theft, and counterfeit money schemes. Most policies reimburse policyholders whether the criminals are employees or outside actors. Hairdressers often assume these financial losses are covered in commercial property.
Unfortunately, property policies often exclude employees’ actions and stolen money, so commercial crime insurance is essential for hair dressers who have employees or typically have cash on hand.
9. Equipment Breakdown Coverage
Equipment breakdown coverage pays for loss caused by mechanical failure of nearly any equipment, including tanning beds, computers, and HVAC systems. Again, many hair dressers assume their property insurance covers these events; however, commercial property pays for damage caused by external sources.
Equipment breakdown coverage pays for damage caused by internal sources, such as power surges and motor burnout. Hairdressers may need equipment breakdown insurance for the machinery housed in buildings they own. That’s when they are most likely responsible for repairs to boilers and air conditioning units.