Running a salon business all by yourself can be challenging. However, you can reduce the challenges by not worrying about making mistakes that can sink your company. While it’s impossible to make mistakes, buying business insurance, particularly beauty salon business insurance, can help cover the damages and costs of these errors.
Buying a salon business insurance can be difficult if you don’t know or experience shopping around. We have done all the research on buying salon business insurance. We’ll go over the cost of salon business insurance and the various types of insurance available for salon businesses.
- How much does salon business insurance cost?
- What are the factors that affect salon business insurance cost?
- How to reduce the price of salon business insurance
- What is salon business insurance?
- Who needs salon business insurance?
- Best salon business insurance companies
How much does salon business insurance cost?
A full salon business insurance policy for a two-person beauty, hair, barbershop, or spa salon costs around $2,760 per year or $230 a month. This is for a comprehensive policy consisting of several important coverages for a salon business. Below are the average cost breakdown for different coverages:
|Salon business insurance coverage||Average costs|
|General liability insurance||$55 per month|
|Commercial property insurance||$105 per month|
|Workers comp insurance||$40 per month|
|Professional liability insurance||$30 per month|
We discussed the details of these coverages and their costs below.
This is just the average. Your particular rates will be different. The actual cost of this policy depends on the number of employees, business turnover, state of residence, services provided, etc. that we are discussing the details below. There are also ways to combine insurances to save money. Be sure to shop around with a few carriers or work with a top broker like CoverWallet, Simply Business, ez.insure, or commercialinsurance.net to get and compare several quotes in one place to choose the best and the cheapest one for your salon business. You should also get a fast online quote from Thimble. It shouldn’t take you more than 5 minutes to get an online quote from Thimble.
General liability insurance cost for salon businesses (hair, beauty, or spa)
Personal injury, property damage, and advertising damage are covered under general liability. It covers third-party liability claims that are a common occurrence for salon owners. General liability may also be required for commercial licenses and leases. Examples of instances covered by general liability:
- Injuries caused by slipping in your salon
- Activities that may cause property damage to your neighbor.
- Legal fees if a competitor sues for libel
General liability insurance may also cover property damage and bodily injury caused by defective products or services. For example, if someone sues your salon because the shampoo you sell causes hair loss, your general liability policy covers your court costs.
General liability insurance for salon businesses costs about $55 per month or $660 per year.
Learn more at general liability insurance cost and the best general liability insurance companies
Commercial property insurance cost for salon businesses (hair, beauty, or spa)
Commercial property insurance protects your salon and its contents. When your assets are damaged by fire, theft, vandalism, or windstorm, policies typically pay to repair or replace them. However, most commercial property policies do not cover damage caused by sewer or drain backups, which can be a major issue for hair salons. You may need to get an additional endorsement for that.
If you run a nail and hair salon with a lot of high-end equipment like nail spa table or chair, you definitely want to have this coverage to protect your assets.
This coverage is always required if you lease the salon. The landlord always requires you to have commercial property insurance for the salon to protect their assets.
The average cost of commercial property insurance for salon businesses is $105 per month or $1,260 per year.
Learn more at commercial property insurance cost and the best commercial property insurance companies
Business Owner’s Policy (BOP) cost for salon businesses
A BOP is a single bundled policy covering both general liability and commercial property risks. Getting a BOP is easier and cheaper than getting both general liability and commercial property separately.
In a covered claim, some business owners may choose to add business interruption as an endorsement to their BOP. When a covered event forces your salon to close, most BOPs cover lost income and ongoing expenses.
A business owner’s policy for salons costs less than $190 per month or $2,280 per year.
Learn more at BOP insurance cost and the best BOP insurance companies
Workers’ compensation insurance cost for salon businesses
Workers’ compensation covers injuries and illnesses suffered by stylists, assistants, receptionists, and other salon employees. In most states, a business with one or more employees must carry workers’ compensation.
Workers’ compensation covers injuries such as:
- Occupational lung diseases caused by inhaling toxic chemicals
- Injury from a fall, such as a broken wrist
- Carpal tunnel syndrome from hair cutting
Salons pay about $40 per month or $480 per year for workers’ compensation insurance.
Learn more at workers comp insurance cost and the best workers comp insurance companies
Professional liability insurance cost for salon businesses
Professional liability insurance, or errors and omissions insurance, covers your legal fees if a client sues you for financial loss. Professional liability insurance helps pay lawyer fees, court costs, and judgments or settlements.
Let’s say you dye your client’s hair the wrong color, and they lose a modeling job. Salon liability insurance covers legal fees if a client sues.
Professional liability insurance for personal care businesses costs around $30 per month or $400 per year.
Learn more at professional liability insurance cost and the best professional liability insurance companies
Equipment failure insurance cost for salon businesses
Mechanical breakdown coverage pays for losses caused by HVAC systems, tanning beds, and computers. It can be bought separately or endorsed onto a property policy. Many salon owners believe their commercial property insurance covers these incidents, but it only covers external damage. Equipment breakdown coverage covers internal damage like power surges and motor burnout.
The average equipment failure insurance for salon businesses is just $25 per month or $300 per year.
Commercial auto insurance cost for salon businesses
Commercial auto insurance covers the repairs and lawsuits when your salon’s vehicle is involved in an accident. Liability coverage for business vehicles is usually required by law to cover damage to others. Still, it can also cover damage to your vehicles and any hired or rented by your company.
Personal auto insurance usually excludes business driving. That means you will need commercial auto for any work-related trips. While a personal policy may cover occasional trips, regular personal vehicle use for business may necessitate a business policy.
The average commercial auto insurance cost for salon businesses is $90 per month or $1,080 per year.
Learn more at commercial auto insurance cost and the best commercial auto insurance companies
Commercial umbrella insurance cost for salon businesses
A commercial umbrella policy does not cover a specific risk. Instead, it supplements other liability policies. So, if your general liability limit is $1 million, but a customer slips and falls with a lawsuit of about $1.5 million, an umbrella policy covers the extra $500,000. Paying for an umbrella policy is usually less expensive than purchasing additional liability coverage.
The average cost of commercial umbrella insurance for salon businesses is $65 per month or $780 per year.
What are the factors that affect salon business insurance cost?
The number of policies and coverage you need is the most important factor affecting your salon insurance premiums. In addition to these two factors, top salon insurers also consider other factors like your business’s characteristics.
The specific factors depend on the company you choose. However, most companies use the following factors when generating quotes:
How you run your salon affects your costs. Salons that run more risky operations that can cause harm to their clients are likely to pay more. For example, if you have tanning beds, you might pay higher premiums because there is a possibility that your clients can get hurt while tanning.
Your revenue plays a major role in determining your premiums because courts consider income when awarding judgments. Therefore, salons with higher revenue often have higher liability insurance premiums.
Number of employees
More employees mean more workers’ compensation, general liability, and commercial property claims. All these come together and increase your premiums at the end of the day.
Your deductible is the amount of financial responsibility you are willing to take in the event of a claim. Assuming greater financial responsibility in the event of a claim, choosing a higher deductible typically lowers your premium.
Your coverage limit is the amount of protection your insurer is willing to offer for a price. Increasing limits on most policies will likely raise your overall salon insurance costs.
While cost is always a factor in salon insurance, owners should also consider value. Simple coverage can save you money, but you will be unprepared if you ever need to make a claim.
Location of business
Your business location is a huge factor that can affect your insurance premium. For instance, commercial property insurance premiums are usually higher in areas with high crime rates, extreme weather, and flooding risks. You may also pay more for general liability if legal fees are high in your location.
How to reduce the price of salon business insurance
Salons are usually small businesses, and as such, they must manage their scarce resources to keep business going. You do not have to avoid your insurance because of the high cost. Instead, the following are some things you may do to lower the cost of your salon insurance.
Shop around for the best policy
The beauty of insurance is that the pricing varies from place to place. Some companies may offer better pricing to attract customers. So, to ensure you get the best bargain, ensure you get quotes from different companies before you make a final decision. Some professionals will say a minimum of three insurers, but you can check as many as you can to get the price that suits you. Getting quotes from several providers can be time consuming. Getting a quote from Thimble should take you less than 5 minutes.
Working with a top broker like CoverWallet, Simply Business, ez.insure, or commercialinsurance.net is another good way to get and compare several quotes in one place without spending much time.
Buy your insurance policy in bundles
Some of the above policies are offered together in one policy, such as the BOP. This helps you save some costs on buying individual policies. Instead of buying separate policies, you might take advantage of the discounted prices and buy bundles that contain the relevant policies you need.
Pay your premiums in full
Most insurers prefer to have their customers pay at once. This is good since they have your loyalty for a year. As a result, they may offer you discounts for paying a yearly fee instead of monthly.
This might look like a huge financial burden at first. But when you calculate the amount you might save, it might be worth it.
What is salon business insurance?
Salon insurance refers to policies purchased by beauty or hair salons, barbershops, and spa owners. Different salon businesses will need different insurance coverages. You can choose to buy a comprehensive salon business insurance policy that includes many important coverages that a salon business would need or you can pick and choose different coverages that you need and buy them separately.
The details and costs of different coverages for a salon business are discussed above.
Who needs salon business insurance?
The following businesses may need salon business insurance:
- Beauty salons
- Hair salons
- Nail salons
- Massage salons
What is not covered by salon business insurance
Hair Salon Insurance protects salon, barbershop, and spa owners from client-related risks. However, some insurers may refuse to cover operations deemed too risky to them. These services don’t mean you can’t get coverage, but you may have to pay more or use a surplus broker.
Excluded practices that are either new and untested or invasive include:
- Hair transplantation
- Eyelash dyeing or coloring
- Massage therapists
- Red light therapy
Best salon business insurance companies
It can be confusing trying to find the best salon business insurance providers since there are so many companies offering this coverage. We have done the research and here are our recommendations of the best salon business insurance companies for your consideration:
- CoverWallet: Best for comparing quotes
- Simply Business: Best for knowledgeable agents and customer satisfaction
- Hiscox: Best for home-based salons
- Nationwide: Best general liability insurance
- The Hartford: Best for large businesses
- Thimble: Best for one-man salon and flexible coverage
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