Insurance for beauticians and beauty salons is an essential part of running your business. It protects your salon or store from unfortunate circumstances that might leave you high and dry and with thousands of dollars out of your pocket.
Beauticians, like eyelash technicians or hairstylists, usually need three types of insurance: professional liability, general liability, and contents insurance. Other policies like cyber security or business interruptions coverage may also be helpful.
This article provides seven reasons why insurance for beauty salons is vital for daily operations.
1. Don’t pay legal fees out of pocket
General and professional liability insurance pay legal fees when a client, customer, or third-party sues your business. Specifically, general liability insurance covers lawsuits related to day-to-day risks that cause bodily injury or property damage.
For example, suppose someone visits your salon. If they slip on a shampoo spill, it might result in an injury that requires medical costs. That person may then file a claim against your business.
Professional liability coverage is similar but pays for lawsuits arising from negligent services, misrepresentations, and errors and omissions.
Suppose a client wanted to dye their hair blonde. However, the result came out bright orange. They won’t be happy and may sue in response. Here, professional liability insurance pays for legal fees, damage awards, and out-of-court settlements.
2. Mitigate day-to-day risks
Insurance’s main objective is to mitigate business risks like a client slipping in your store or a hairdo gone wrong. These incidents could result in a lawsuit against your business.
Because insurance pays for lawyers and damage awards, the risk is reduced. If someone injures themselves on your premises, you know that legal fees won’t come out of your pocket.
Similarly, insurance reduces the risk of business equipment being damaged, destroyed, lost, or stolen. In these circumstances, contents insurance can provide the replacement value of whatever tools you lose.
Suppose your salon flooded and much of your styling equipment got damaged. In this case, contents insurance could provide enough compensation to buy replacements. This ultimately leaves you with fewer risks to worry about.
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3. Let your insurer handle the claims process
Not only does your insurer pay for the legal costs, but it also manages a lot or most of the legal process. Generally, you can expect your insurance company to find a legal professional and go through the litigation and settlement process with the plaintiff.
As the insuree, you might appear for the discovery and answer questions related to the incident. But besides that, your insurer often handles what needs to be done.
4. Get peace of mind
As a small business owner, you know things might go wrong and potentially sink your company. A client may slip right outside your icy doorstep and threaten to sue. You might hear a destructive storm and worry about a flood destroying your business equipment.
But insurance provides peace of mind. You know if an issue arose, your policy covers the financial fallout.
5. Insurance might be mandatory
It’s common for the organizations you work with to mandate insurance. Although a regular walk-in client likely won’t ask for proof of coverage before a haircut, a fashion show that asks you to style its models might need to see proof of coverage.
Landlords are one of the most common parties to require you have insurance because it reduces the landlord’s risks.
Suppose a client trips over a broken tile in your store and injures themself. You’re uninsured. Your client decides not to sue you because your salon might declare bankruptcy, meaning the client won’t have a claim. Instead, they sue your landlord, who has deeper pockets.
But if you have insurance, your client knows they can claim your policy. As a result, there’s less incentive to file a claim against your landlord, reducing their risk to legal actions.
6. Maintain your reputation
If you’re uninsured, you might not admit fault when you make a mistake because it could result in financial and legal liability. Handling a situation in this manner could hurt your reputation as a beautician as it can appear unprofessional.
But with the proper insurance, damage and legal costs won’t come out of your pocket. Therefore, you can better manage the situation. If you know you’ve made an error, it’s easier to admit because legal costs won’t come out of your own pocket.
For example, you might use an eyelash glue that results in an allergic reaction, and the client sues. Without insurance, you might not want to admit you should have double-checked the label and asked the client whether they had allergies. While this is the best course of action for your business’ reputation, it could lead to legal liability.
With insurance, this admission is easier because the consequence of a damage award comes out of your insurer’s pockets.
7. Prevent business interruptions from causing financial hardship
Business interruption insurance covers lost revenues when an unfortunate incident leaves your store closed for multiple days.
For example, suppose a fire damaged your storefront. In this case, you cancel appointments and can’t perform your services for the next week. That’s a week’s worth of revenue you’re losing!
Business interruption insurance compensates you for whatever you would have regularly earned that week. As a result, you won’t face issues paying rent or staff in the meantime. Insurance for beauticians and beauty salons is a vital part of mitigating your business risks. NEXUS offers affordable rates from insurers across Canada.
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Written by: Apollo Magazine
