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What is beauty insurance?

Beauty insurance is an umbrella term for policies designed for professionals and businesses in the beauty industry. Examples of beauty businesses include barbers, spas, tattoo shops and hair salons.

The idea is to protect businesses from liability risks that could put them in financially precarious situations. For example, if you own a barbershop, and someone slips and falls inside it, injuring themselves in the process, you might get sued for it. In this case, insurance would cover all of your legal fees. Likewise, if you get accused of professional negligence (e.g., ruining someone’s beard during a trim), then insurance can help you pay for the damages.

While legal disputes – especially large legal disputes – don’t happen often, they do happen, and there are plenty of claims filed each year to prove it. If you do get sued, the costs can be astronomical. So astronomical, in fact, that they can put you out of business (we’re talking hundreds of thousands of dollars of potential expenses). This is especially true if your business has just started out, as you may not have the funds needed to sustain a lawsuit.

But limited funds or not, setting aside a little bit of money each year for insurance is never a bad idea, so consider doing so.

Who needs beauty insurance?

Individual professionals and business owners operating in the beauty industry should seriously consider buying insurance. Depending on your field, your risks may be different from those faced by other businesses, so when selecting your policy, be mindful of how well it caters to your specific needs.

In either case, here are some of the most prevalent businesses operating in the beauty industry:

• Estheticians: Estheticians deal with skin treatments, which can sometimes lead to adverse reactions. Insurance can cover claims related to skin irritation, allergic reactions and other treatment complications.
• Hairsalon stylist: Working with chemicals, hot tools and sharp scissors comes with its own set of risks. Insurance can cover damages to clients’ hair, accidental cuts and even property damage in your salon.
• Spas: Spas offer a wide range of services from massages to facials. Insurance for spas covers liability claims, employee injuries and equipment breakdowns, ensuring that your serene environment stays stress-free.
• Tattoo shops: Tattoo artists work with needles and ink, which opens the door to infection risks and allergic reactions. Insurance can protect your business from claims related to health complications, ensuring your artistry doesn’t lead to financial hardship.
• Barbers: Barbers use sharp razors and clippers, which can occasionally cause accidental cuts. Insurance can cover medical costs and liability claims, keeping your barbershop running smoothly.
• Nail technicians: Manicure and pedicure services involve chemicals and tools that can cause nail damage or skin irritation. Insurance covers claims related to these issues, allowing you to focus on providing beautiful nails.
• Microblading: This semi-permanent makeup technique comes with risks of infection and allergic reactions. Insurance can cover these risks, ensuring your clients feel safe and your business remains protected.
• Eye estheticians: Eye treatments, including eyelash extensions and brow tinting, involve delicate procedures that carry risks of eye irritation or injury. Insurance can cover claims related to these treatments, providing security for your practice.
• Tanning salons: Tanning beds and sprays can sometimes cause skin reactions. Insurance can cover claims related to these issues, ensuring your tanning salon remains a safe haven for sun-seekers.

What type of insurance policies do beauty businesses need?

Most beauty businesses would need some or all of the following:

• General liability insurance: Protection against claims for bodily injury and property damage.
• Professional liability insurance: Coverage for claims related to errors or negligence in your services.
• Product liability insurance: Protection against claims from products sold or used in your services.
• Commercial property insurance: Coverage for damage to your salon or studio, including equipment and inventory.
• Business interruption insurance: Covers lost income if your business is forced to close temporarily due to unforeseen events.
• Cyber liability insurance: Protects against data breaches and cyber-attacks, crucial for businesses storing client information digitally.
• Workers' compensation insurance: Covers medical expenses and lost wages for employees injured on the job.
• Commercial auto insurance: If you use a vehicle for business purposes, this add-on covers any related risks.

How much does beauty insurance cost in Canada?

Given that beauty businesses cover a wide range of services and come in various sizes, it’s nearly impossible to pinpoint how much you have to pay in premiums. That said, a smaller operation – consisting of one person or a handful of people – should expect to pay no more than $2,500 per year. In fact, most small operations can get away with paying $500 to $1,500 per year, if their circumstances aren’t too precarious. If you run a bigger business, with more than 10 people, then you may have to pay up to $5,000 a year.

Again, a set of circumstance individual to your business would dictate your rate. If you’d like to know your exact premium, consider talking to a broker or accessing a free quote here on RATESDOTCA, which take only a few minutes.

What factors determine the cost of beauty insurance rates?

Several factors influence the cost of beauty insurance rates in Canada:

• Type of services: More invasive or high-risk services typically result in higher premiums.
• Business size: Larger businesses with more clients and employees may face higher rates.
• Location: Insurance costs can vary based on your geographical location and local regulations.
• Claims history: A history of insurance claims can increase your premiums.