In order to ensure the safety of customer and employees at the salon, salon owners normally purchase commercial liability insurance. Commercial liability insurance varies in cost and depends on a number of factors. Salon owners should shop around for quotes and compare the different coverages in order to see what fits their budget and their salon’s needs.
What is the approximate cost?
Depending on the size of your salon’s operation, insurance may cost a few hundred dollars per year, but can reach up to a few thousand dollars. For example, general liability, which is the most basic type of insurance, will protect your business against the risk of a simple claim, which may be one of the following:
“Slip and Fall” Insurance. This type of coverage is exactly what it reads. If your floor is wet, for example, and someone slips or falls at your business location, they may decide to file a General Liability claim for their bodily injuries.
Products Liability Insurance. If your salon sells retail products and your customer has an allergic reaction to the product when it is used at home, your customer is liable to sue your business for damages.
Personal Injury. Let’s you gave someone a haircut they weren’t in love with before they were to speak in front of hundreds of people, they could decide to sue you for emotional trauma, even if is a non-physical injury.
What determines my cost?
Many factors can determine just how much you will have to pay for your salon’s insurance policy. It may be the location of your business, the square footage of your salon, the type of building you are located in, or simply whether you have security and fire alarms in place. Other factors could be the types of services you offer, how many employees you have, your insurance claim history, and possibly even your credit score. Obviously, the type of coverage you choose will also impact the final cost as well. In most cases, choosing a $2,000,000 coverage plan will significantly cost more than a $1,000,000 coverage plan. Remember that more factors involved (more employees, larger salon) will increase the risk and therefore will likely increase the cost of your coverage.
What’s my startup cost?
According to data gathered from Demand Media, individuals who wish to open a salon should set aside at least $20,000 and secure a five to six figure loan. If you plan on opening a sizeable salon, rental costs alone can go up to $20,000 a month. A single salon chair can cost up to $1,000 respectively. Even if you do not require many chairs in the beginning, other equipment you may need can cost you thousands of dollars before your doors are open. Consider all the costs involved in opening a salon in addition to insurance coverage. The good thing is that insurance is normally the smallest expense for salon owners.
Other Salon Policies to Consider
Salon insurance should cover medical expenses for people who are injured at your business, as well as legal fees if those people decide to sue. Here are some other types of insurance you may want to think about:
Commercial Property Insurance. If something was to happen to your building (fire, storm, theft) and you don’t have property insurance, you are likely to be left with nothing. That means all your assets such as equipment and supplies are at risk. You must protect your livelihood by staying covered with property insurance.
Business Owner’s Policy (BOP). If a client’s face was burned during a wax treatment, or if your employee caused damaged to leased equipment, your BOP will come in handy. Your BOP will likely cover you for equipment repair costs and possibly court fees. A BOP policy may even cover your lost income when you are unable to work. Protecting yourself from the unexpected is vital. This type of insurance is usually coupled with General Liability and Property Insurance to minimize the overall cost.
Worker’s Compensation Insurance. While it may seem unlikely that your employee will get injured on the job, it does happen more frequently at service based businesses like salons. All it takes is for an employee to slip and fall, and you will be responsible their wages while they recover, and even possible treatment costs. You may even be responsible for court fees, legal fees, and judgements the employee may win against you. Worker’s compensation should never be an option, but a requirement to protect your business, as it is probably the most important coverage of them all.
Salon insurance is a must.
Whether it is general liability coverage, commercial property insurance, or worker’s compensation, you should always be in the position to protect your salon business as it is your livelihood. No matter how well trained or careful your staff may be, there is always room for error. Without the proper insurance coverage, you could end up owing thousands of dollars in legal fees, which could put you out of business.
Opening a new salon?
Shop around to compare coverage rates and options to ensure your business is prepared. Already have coverage? It is always a good idea to reevaluate your coverage yearly, as changes to your business like expansion or new services is likely. Ensure the safety of your customers, employees, and business by making sure you are covered!