Workers compensation insurance for hair salons is coverage for work-related employee injuries and illnesses. Most states require you to carry this insurance if you hire W-2 employees at your salon.
Scissors flying, hot tools twirling, chemicals sitting — there are so many ways your salon employees can get injured. If you’re wondering how to protect your team and stay state-compliant, workers compensation insurance is the coverage you need.
Our guide breaks down the types of salons that need it, how it works, and how to get it, so you can focus on running your beauty business flawlessly.
Does Your Hair Salon Need Workers Compensation Insurance?
Short answer: Yes, you need hair salon workers comp insurance if your salon has W-2 employees! Most states (Texas and South Dakota excluded) require you, the business owner, to carry this coverage.
Certain states mandate this coverage to ensure your stylists are taken care of if they get injured while working at your salon. Ultimately, it protects your business and the team you rely on, because work accidents can happen at any time.
- If you have any W-2 employees, you likely need workers compensation insurance
- If your salon only has independent contractors, the coverage needs are different; you still need proof of their booth renters insurance
Does Your State Require This Coverage?
The exact requirement typically depends on how many W-2 employees you have, but it commonly kicks in once you hire your first employee. Find your state’s rules on the U.S. Department of Labor’s interactive map or click on your state link below.
Workers Compensation Agencies by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Who’s Covered by Workers Comp in a Hair Salon?
Anyone who is on your salon payroll as a W-2 employee can be covered by workers compensation insurance. This includes:
- Hair stylists
- Cosmetologists
- Assistant stylists
- Reception staff
- Apprentices
- Trainees
Workers comp is not designed to cover independent contractors, such as a stylist renting a booth at your salon. These workers should have their own liability coverage because they’re operating their own business.
What Does Workers Comp Cover (And Not Cover)?
Salon workers comp is a “no-fault” policy, meaning your employee doesn’t need to prove you were negligent to receive benefits. The plus side of that is that employees can get the help they need without the situation escalating into a blame game.
| Covered by Workers Comp (Your W-2 employee…) | Not Covered by Workers Comp |
|---|---|
|
Gets injured while doing hair
|
Intentional or illegal acts
|
|
Suffers from an illness due to their work
|
Client injuries (needs salon owner liability insurance) |
|
Experiences job-related mental or emotional stress
|
Off-the-job injuries (such as during a commute)
|
|
Develops injuries from repetitive motions
|
Stylists receiving a service at the salon (not work-related)
|
|
Is injured due to a workplace accident
|
Independent contractors, volunteers, or unpaid workers
|
|
Is hurt while following your salon’s policies
|
You, the salon owner (typically need to opt in for coverage)
|
Example: A hair stylist slips on a puddle of shampoo water, breaks their wrist, and cannot work until they’re healed
Covered by Workers Comp: ✔️ Typically yes! Because they were working at your salon when they were injured
What Does Workers Comp Pay For?
Your workers comp policy is intended to pay for:
- Medical bills
- Lost wages
- Rehabilitation costs
- Injury lawsuit expenses
- Disability or death benefits
- Spouse or family compensation
Salon General Liability vs Workers’ Comp: What’s the Difference?
General liability for beauty salons covers third-party claims, typically accidents that happen to clients at your business, while workers’ comp protects your employees.
| Coverage | General Liability (GL) | Workers Compensation (WC) |
|---|---|---|
|
Primary Purpose |
Protects the business if third parties (clients or visitors) are injured or their property is damaged at your salon
|
Protects employees (and the business) when staff are injured or become ill due to work
|
|
Who It Covers |
Third parties, such as clients, visitors, landlords, or vendors (not your employees)
|
W‑2 employees (and owners if included)
|
|
Examples |
Client slip‑and‑fall in the lobby, hair dye spill on a client’s handbag, or advertising mistakes
|
A stylist cuts their hand at work, gets a rash from chemical exposure, or suffers back strain while shampooing
|
|
What It Pays For |
Client’s medical bills, property repair or replacement, and legal defense and settlements
|
Employee medical care, partial lost wages, rehab, disability, or death benefits; helps limit employer lawsuits
|
|
Required? / Who Buys |
Often required by landlords or property managers via a lease contract; salon owner buys a general liability policy
|
Generally required by state law if you have W‑2 staff; salon owner buys a workers comp policy
|
Pro Tip:
Shopping for liability coverage, too? Explore coverages you need: Insurance for Beauty Professionals, Simplified.
How Much Does Workers Comp Insurance Cost for a Hair Salon?
Your salon is unique in its services, stylists, and atmosphere, so your workers comp insurance cost is tailored specifically to your business. Generally, premiums are estimated with this base formula:
Premium Cost = Payroll/$100 x Class Rate x Experience Modifier
- Payroll: Your annual payroll for employees, divided by $100
- Class rate: Most salons fall under code 9586 (beauty shops or hair salons)
- Experience modifier: Your claims history compared to similar businesses
Some factors that affect your final price include:
- Your state
- Total payroll
- Past claims
- Your safety management practices
The best way to find out how much your salon will pay is to get a quote from an insurance provider. Your quote will be calculated based on your unique business factors, so you can feel confident you’re only paying for what you need.
What to Do if a Covered Employee Gets Hurt on the Job
If one of your stylists is injured while working, stay calm! Your workers comp coverage is made for these moments, so you’ll both have support to get through the situation.
- Get medical care
- Report the claim right away — BBI’s ready to help
- Document what happened and update your safety steps
- Work with your insurer, providing any information needed
- Offer assistance when possible
Your insurer will walk you through the rest of the process until the claim is resolved.
How to Get Covered (Step by Step)
Ready to protect your employees and check off your state workers comp requirements? Here’s how to get covered with Beauty & Bodywork Insurance (BBI):
- Gather annual payroll, FEIN (Federal Employer Identification Number), job roles, and any prior claims
- Submit your application (we’ll help align class codes)
- Receive your quote right in your email inbox
- Or, our system will connect you with an agent to finalize your quote
- Purchase to secure your workers comp coverage
- Download your certificate of insurance (COI) and send it to anyone who needs to verify coverage
BBI: Workers Compensation for Hair Salons Made Easy
Between confirming bookings and ordering more product (again), running a salon is hard work. But making sure your coverage is compliant and your employees are protected against costly what-ifs can actually be easy with a policy from BBI.
BBI specializes in insuring the beauty industry, so our coverage is made for salon owners, hair stylists, cosmetologists, and more. Get affordable protection for your team by completing a quick online application today!
FAQs About Hair Salon Workers Compensation Coverage
Do I Need Workers Comp With Only Part-Time Stylists?
Are Booth Renters Covered Under My Policy?
How Fast Can I Get a COI?
What’s Not Covered Under Salon Workers Comp?
Do Hair Salons Need Workers Comp if Stylists Are Booth Renters/1099s?
JoAnne Hammer | Program Manager
JoAnne Hammer is the Program Manager for Beauty and Bodywork Insurance. She has held the prestigious Certified Insurance Counselor (CIC) designation since July 2004.
JoAnne understands that starting and operating a business takes a tremendous amount of time, dedication, and financial resources. She believes that insurance is the single best way to protect your investment, business, and personal assets.
JoAnne Hammer is the Program Manager for Beauty and Bodywork Insurance. She has held the prestigious Certified Insurance Counselor (CIC) designation since July 2004.
JoAnne understands that starting and operating a business takes a tremendous amount of time, dedication, and financial resources. She believes that insurance is the single best way to protect your investment, business, and personal assets.
