Congratulations! You’ve decided to take the plunge and open your own salon. You’ve probably done a lot of preparation and work up to this point, and hopefully, a Business Owner’s Policy was considered a necessity.
What exactly is a Business Owner’s Policy and why do you need it?
A Business Owner’s Policy combines Property coverage and Liability coverage. Property coverage covers the building your business is in, and your business’ personal property. That way, if anything happens, your salon is quickly rebuilt or repaired. This could involve damage like a sewer and drain backup, broken windows, or computer breakdowns. Also included in a BOP is “Loss of Income.” If, for example, the damage to the building and/or your salon is so extensive that your salon is shut down, then not only will you be compensated for lost income, but moving expenses as well.
General Liability coverage covers your business in the event you get sued as a result of someone slipping and falling on your property, for example. It covers legal fees, court costs, and any judgments made against your business.
As a business owner, you may also want to include Professional Liability coverage. This insurance protects your clients in case your employees make a mistake and the client sues for damages. One example would be if an employee burns a client with hot wax, or if a treatment is left on too long. Lawsuits can incur even if worker negligence wasn’t involved. If a client simply has an allergic reaction to a product, you can still be held libel, and General Liability may not cover a particular claim.
If you plan on selling products in your salon to clients for home use, you may want to consider Product Liability insurance, whether the products are manufactured by your business or not. This will protect you against any negative claims made by clients that are completely out of your control.
Worker’s Compensation insurance is purchased separately, and the penalties for not providing it to your salon employees is quite severe. Remember, your employees are your most important assets—without them, you wouldn’t be able to conduct business–so they should be protected against injuries on the job. Worker’s Compensation pays for an injured employee’s medical expenses, disability, and a portion of their earnings until they are able to return to work. It also prohibits them from suing your business.
There are many factors which affect how much your policy will cost. Some of these include:
- The location of your business
- The square footage of your business
- The type of building your business is in
- Whether you have fire alarms and security systems
- The number of employees you have
- What type of services you offer
- Your personal and business credit
- The insurance provider
- The type of coverage you choose
- Your insurance claims history
When deciding on the proper coverage for your salon, it’s always best to work with a licensed insurance professional. They can tell you about all the different types of coverage available, and help you develop a complete insurance package that’s designed specifically to meet the needs of your business.