Every business that serves customers within a physical building should have some kind of liability insurance. For beauty salons, professional liability insurance may seem like a luxury item because the costs may cost 1 or 2 percent of your annual expenses. However, every hairdresser that works at a beauty salon needs professional liability insurance in case something happens.
What Is Professional Liability Insurance?
Professional liability insurance covers losses arising from a claim that the salon failed to perform services correctly. For example, if a curling iron or hair straightener gets too hot and burns a customer, insurance covers any damages caused by the failure. Although the physical object, or the curling iron, hurt the customer, it was a person’s accidental negligence that put the curling iron close enough to the person to cause the failure.
Insurance for People
Professional liability insurance covers bodily injury or damage that comes from the actions of people, but not the failures of the facility or products. This type of insurance covers claims that come from incidents that might happen outside of the salon itself if someone finds the salon at fault due to the action or inaction of an employee.
Financial Protection
Insurance covers losses that someone may not ordinarily be able to pay. In terms of professional liability insurance for hairdressers, this covers potential lawsuits or settlements that arise from cases where a customer sued a salon. In the early 2000s, one settlement reached more than $100,000 for someone’s medical bills. Another claim was for $60,000. Insurance can pay those amounts, whereas a salon owner or hairdresser may not be able to come up with that kind of cash after a protracted legal battle. You already know what types of accidents could happen in a beauty salon. Heat treatments could burn people, and harsh liquids could spill on the floor. However, professional liability insurance kicks in for reasons that you cannot predict.
Reasons for Insurance
No one wants to think about the unthinkable, but professional liability insurance might save your business and your reputation. If a customer makes a claim against the business or business professional, someone has to pay the damages.
Medical Costs
Going back to the burn from a curling iron, a superficial burn may not need a lot of medical treatment. However, a very hot curling iron could cause deep, third-degree burns. What if the burn happens to someone’s face and the customer needs extensive care to repair any damage? What if the curling iron gets in someone’s eyes? What if hair dryers burn someone’s scalp? These are extreme cases, but salons and hairdressers cannot prepare for the unexpected. Real-life cases of nail salons include customers getting infected nails that need medical treatment. One customer needed to have an amputation. What happens if too much hair dye seeps into someone’s scalp and an allergic reaction occurs? Who pays for the medical bills resulting from that service failure? If you don’t want that money coming out of your profits, you need insurance.
Facility Closures
If your salon closes for any reason due to someone’s actions in the salon, professional liability coverage may help with the costs of the shutdown. Suppose a hairdresser leaves a curling iron plugged in and it starts a fire. The fire damages a few booths, and the water and fire damage takes a week to repair fully. The right professional liability insurance policy can step in to give you some cash to cover the loss of property and income.
Who Needs Professional Liability Insurance
Professional liability insurance should cover anyone who works in the facility. How this coverage works varies from person to person.
Salon Owners
Salon owners must have general liability insurance to operate the business, but they need to have professional liability insurance as well. This insurance covers the actions of the owner, but also any damage caused by the negligence of someone working in the facility.
Booth Renters
Booth renters, or the actual hairdressers, most certainly need this type of insurance. If a court finds a hairdresser negligent and that person owes damages, the court can take those assets in any way it sees fit. Without insurance, a hairdresser could lose a car, a house, and income.
Salon Service Providers
Other service providers need insurance. Nail techs, specialists, masseuses and anyone who works there needs insurance. Some states require professional liability insurance for everyone who works in the salon, or owners can make this a requirement before someone works there. If a customer can’t get any money out of an employee, a lawyer may turn to the owner next.
A team of dedicated insurance agents in NJ can help you get the insurance coverage you need. Agents can go over safety issues in the salon, best practices and reducing risks to customers. See what our experts can do for you as you run your successful business as a hairdresser.
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