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Setting Up Your Salon or Spa Business: The Three Types of Insurance Needed In a Salon

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Salon and spa owners—we see you. You’ve done all the work on how to set up a salon or spa business and are starting to find clients to pamper. But before you do, you need to get the right type of salon and spa insurance, so here we’ll cover the three types of insurance your business will likely need.

Why Do You Need Salon & Spa Insurance?

Before diving into the types of insurance needed for your salon or spa, let’s look at why you might need insurance in general. 

At Beauty & Bodywork Insurance (BBI), our salon and spa insurance package is designed to protect business owners from over 250 modalities—including hair stylists and barbers, nail salons, and more. 

Insurance is essential to protect you legally and financially from third-party claims that may come up as you run your business. Some examples of claims include: 

  • Customer accidents (slips and falls)
  • Theft or damage to your equipment, tools, and supplies
  • Injuries and illnesses
  • Employee misconduct
  • Unsatisfied customers
  • Damage to customer property
  • Medical bills and legal fees

Just imagine for a moment: A client of yours has an allergic reaction to a product or chemical you use in your salon. Afterwards, they have to get medical attention because of it. They decide to sue your salon and name your business and your employee in the claim. 

Salon and spa insurance can help you pay for legal fees in the case as well as the customer’s medical bills or any other settlements from court. 

Without salon and spa insurance, you would have to pay out-of-pocket—which is something that most business owners cannot afford to do. 

It’s also important to note that you want to have salon and spa insurance if you have employees. This type of coverage may help you pay for a third-party claim caused by you or an employee.

Is Insurance Legally Required To Operate A Salon or Spa?

Some people wonder if it’s a legal requirement to have salon and spa insurance to run your business. According to the Small Business Administration (SBA), some types of insurance are required by law, including workers’ compensation, unemployment, and disability insurance. If your spa or salon is part of a franchise, they may also require you to get specific types of insurance to operate under their name. Besides that, most insurances are optional. The SBA, again, recommends that business owners should insure against things you wouldn’t be able to financially pay for on your own. So, using this definition, the three types of insurance needed in a salon or spa below are definitely essential for most business owners.

3 Types of Insurance Needed For Salons and Spas

Insurance is important for any business, and spa or salon owners are no exception. Whether you own a day spa, a franchise, a nail studio, or something else, you need insurance to protect your business. The three types of salon and spa insurance you may need are:
  • General liability insurance
  • Professional liability insurance
  • Product liability insurance
Let’s look at each one further in depth so you can decide which insurance policy is best for you.

General Liability Insurance

The first of the three types of insurance needed within a salon or spa is general liability insurance.

General liability insurance covers you for accidents that may happen as a result of your business operations. These are incidents that aren’t directly caused by you, but happen on your premises.

This is necessary because it protects you against third-party claims. Some examples of possible claims include property damage or injury, such as a customer falling off a massage table or slipping on some water in your salon.

If a customer tries to sue you for damages or injuries, general liability insurance may help you cover those costs.

Professional Liability Insurance

The second out of our three types of insurance needed within a salon or spa is professional liability insurance.

Professional liability insurance—also called errors and omissions insurance—may cover you for an incident you or your employees caused.

This type of coverage is designed to protect you against third-party claims for damages caused by the professional services offered by your business. Some examples include:

  • A chemical burn or allergic reaction from bleach or other hair products
  • Candles in the room burning a customer’s handbag or clothing

Professional liability insurance is important because it protects you financially from any errors or omissions you make while working with a client. Even the best professional can make mistakes, so it is important to protect yourself legally and financially.

Often, professional liability insurance is together with general insurance, but they are different. We’ll cover general vs. professional insurance further in depth later in this article.

Product Liability Insurance

The last of our three types of insurance needed in a salon or spa is product liability insurance. Product liability insurance can protect you against third-party damages or injuries that occur from the products your salon or spa sells to customers. For example, a faulty lid causes liquid to leak out in a customer’s car, ruining their seats. Or, someone has a chemical reaction to a face cream they purchased in your spa’s storefront. Even if you may not be the one making the product, you and your business could still be named in a lawsuit for being the one who sold the product to a customer. Product liability insurance may help you cover the cost of a claim, including (but not limited to):
  • Legal fees
  • Medical bills
  • Repairing or replacing damaged property
While BBI does not exclusively offer this coverage on our insurance policy, we have partnered with Insurance Canopy to help cover the products you choose to sell in your salon or spa. You can learn more about their Beauty & Cosmetics Product Liability Insurance here.

General Vs. Professional Insurance

As mentioned, general and professional insurance are often packaged together, leading some business owners to think they are the same thing. However, general vs. professional insurance are very different and are designed to cover you in specific ways. In short:
  • General liability insurance covers incidents that happen in your salon or spa, caused by no fault or error of your own and are not necessarily related to the services of your business.
  • Professional liability insurance covers incidents that are caused by the services your business provides and may be due to oversight, error, or omissions of you or your employees.
So, the main difference between general vs. professional liability insurance is the first is an accident that could happen anywhere and the second is that it happened because of the services directly received by your salon or spa. These two out of our three types of insurance needed in a salon are the most important as they will cover you for the most common third-party claims. And if you’re wondering whether you need to buy general or professional insurance, we definitely recommend that you purchase both. In fact, you’ll often see these two types of coverages combined into one plan, just as we sell here at Beauty & Bodywork Insurance.

Protect Your Salon & Spa Business Today!

Salon and spa insurance is an important part of running your business. If you want to dive a bit deeper, read our guide on what’s covered in salon and spa insurance.

And, if you have any questions about the three types of insurance needed within a salon, don’t hesitate to contact us. Our spa and salon insurance policies begin at $349.00 a year, but we can help get you a quote, understand exactly what’s covered under your package, and answer any other questions you have.

BBI has years of experience working with business owners and we know exactly what spa and salon owners need to do their best work and stay protected.

You’ve worked hard to open your salon and spa—it might even be a dream you’ve had for years! So make sure you are protecting yourself and your business by getting insurance. We hope this guide helped you understand the three types of insurance needed within a salon and how you can protect yourself today.

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