How to Choose Insurance Coverage for Your Salon

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Adobe Stock/Roman Tyukin

Though your primary goals for running a thriving nail salon may be creating stunning, photogenic manicures and relaxing pedicure experiences, you have many behind-the-scenes details to iron out to keep your workplace secure for your clients, employees and operations. Insurance policies are vital for protecting your salon from unexpected risks. Savvy business owners look for comprehensive insurance coverage to secure long-term success.

Assessing Your Risks

Every nail salon faces different liabilities depending on its location, size and services offered. Understanding these factors can help you determine the insurance coverage your salon needs.

  • Client injuries and allergic reactions: Slips and falls may occur within the salon premises. Nail products or services may also cause adverse reactions.
  • Employee injuries: Repetitive strain injuries can result from frequent tool use. Employees may also experience accidents involving equipment or chemicals.
  • Property damage: Fires, water damage or other disasters can affect your salon’s building and equipment.
  • Burglary and theft: Criminals could target your salon, breaking in and stealing cash, products or expensive equipment. Approximately 20% of small businesses reported experiencing burglary and robbery within the past five years.
  • Product liability: Client claims regarding defective or harmful products may occur during treatments.

What Insurance Do You Need to Cover Your Nail Salon?

Securing insurance is crucial for protecting your nail salon. Here are three essential types of insurance every nail salon owner should prioritize.

1. General Liability

General liability insurance is a foundational policy for covering daily risks associated with running a nail salon. It protects your business against slip-and-fall injuries or property damage. This policy also covers legal fees and settlements if your salon faces a lawsuit.

Accidents happen even in well-maintained establishments, so general liability is necessary to shield your company from financial strain.

2. Professional Liability

Also known as errors and omission insurance, professional liability insurance protects your salon from claims of negligence or mistakes in the services you provide. For instance, this policy can cover the costs of defense and potential settlements if a client alleges that a manicure caused an injury. In a service-based industry like nail care, this insurance is vital for safeguarding your reputation and finances.

3. Product Liability

Your salon most likely uses or sells products, so product liability insurance is critical to your coverage. This policy protects against claims related to defective or harmful products that cause injuries or allergic reactions. 

For example, it can cover the legal costs, medical bills and damages if a client has a severe reaction to a nail polish or lotion. Even with high-quality products, unforeseen incidents can occur, making this type of insurance essential.

Additional Insurance to Consider

Beyond the essential insurance types, these additional policies can provide extra protection and peace of mind for your nail salon.

  • Commercial property: Covers damage to your building, equipment and inventory due to events like fires, storms, theft or vandalism.
  • Business interruption: Protects your income if your salon closes temporarily due to a covered event, such as a natural disaster.
  • Workers’ compensation: Required in the U.S. if you have employees. This policy covers medical expenses and lost wages for employees injured while on the job.
  • Umbrella insurance: Offers additional liability protection beyond the limits of your general and professional liability policies.
  • Employment practices liability insurance: Protects against discrimination claims, wrongful termination or harassment from employees. 
  • Disability: The requirement for this insurance varies by state but can provide income replacement for employees who cannot work long-term due to injury or illness.

Choosing Insurance Coverage

Ultimately, the best combination of insurance coverage for your nail salon is a set of policies that provides adequate protection without overpaying.

  1. Evaluate the risks: Consider the risk factors your salon faces. For example, business interruption and commercial property insurance are critical if you operate in an area prone to natural disasters.
  2. Prioritize essential coverage: Focus on securing the must-have policies first. These will form the foundation of your protection.
  3. Compare policies and providers: Shop around and compare quotes from multiple insurance providers. Look for companies that specialize in small business insurance to ensure they understand your specific needs. Pay attention to coverage limits, deductibles and exclusions when evaluating policies.
  4. Review your budget: Balance your coverage needs with your budget. While it may be tempting to choose the cheapest option, insufficient coverage can lead to consequential financial losses in the event of a claim.
  5. Consult an insurance professional: An insurance agent or broker with experience with beauty industry clients will work with you to identify coverage gaps, explain policy details and ensure complete protection.

Shield Your Nail Salon With Insurance

Running a nail salon comes with its share of risks, but having wide-ranging insurance coverage can protect your business from unexpected challenges. Understand your available policies to decide which are a worthwhile investment. By taking the time to review them, you can choose ones that build a comprehensive safety net for your salon.

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