People have a love-hate relationship with insurance…or maybe it’s just a hate-hate relationship. I think this is caused by misunderstanding what insurance is and how it works. Our goal is to provide additional clarity on coverages available for your business to help you navigate through the hairstylist insurance and cosmetology insurance process.
What insurance coverage does a hairstylist or cosmetologist need? Depends. There are coverages that are critical and others that may be considered depending on your business operations. Below we will explore the various coverages you should consider to protect you and your business.
Commercial General Liability (CGL) – CRITICAL
The basis of liability insurance is to respond to bodily injury and property damage claims you become legally obligated to pay arising out of:
- Your premises: The most common premises claims are slip-and-falls. Another example of premises liability claims is an injury to a client from a falling object, ceiling tile, shelving, or bottled products.
- Your operations: Injuries that occur during your business operations, like a client being injured due to a faulty shampoo chair. Because most of your “operations” are services provided to a client, most of your injuries from your business operations would be covered under Professional liability. Which we will cover later.
- Your products: Product liability provides coverage if you have a claim arising from a product you manufacture, sell, handle, distribute, or dispose of. If you private label or repackage products for sale or samples, you need to ask if your product liability policy will extend to these products. Many CGL policies will limit the product liability to only products being used on a client but not products that are private labeled or repackaged for sale. If you are currently private labeling or considering it in the future, consult with your insurance professional and discuss any limitations in the policy that may affect you.
- Personal injury and advertising: There are various coverages offered through the personal and advertising injury coverage, but most notable are oral or written publications that slander or libel a person or organization, violate a person’s right, or use of another’s advertising idea in your advertisement.
Commercial General Liability insurance – also referred to as Public Liability Insurance – is the primary coverage for your insurance portfolio. It is the coverage most will require to attend a trade show, lease a building or space, or any equipment.
Professional Liability - CRITICAL
As mentioned above, most CGL policies will exclude professional liability. You can usually purchase your General and Professional Liability insurance as a package, but on occasion, you will be required to purchase them separately.
The professional liability will protect you from claims arising from errors and omissions in performing your professional services, breaching your care of duty, and causing harm to someone.
Your professional liability insurance could cover various bodily injury claims like chemical burns, lacerations, infections, rashes, and allergic reactions. Hairstylist insurance and cosmetology insurance coverage must include professional liability insurance in addition to general liability insurance.
Inland Marine - CONSIDER
Most commercial property insurance only provides coverage to items that are at a location specifically designated on the insurance policy. Anything that should leave that specific premises would not be covered. So, if you have your car broken into and your tools and supplies stolen, there would be no coverage for the loss because the claim did not occur on the premises designated on the policy.
Inland marine coverage is a type of property insurance coverage that is not restricted to any one location. Inland Marine provides coverage for equipment and items that are portable, such as chairs, tables, warmers, scissors, shears, brushes, hairdryers, flat irons, etc.
Like most property policies there is a deductible that will apply to the inland marine coverage. Through the Beauty and Bodywork Insurance Program, the inland marine deductible is $100.00.
In the event of an inland marine claim, the deductible will be deducted before the insurance company pays the claim. If you have a theft claim for $1,000.00 the insurance company would pay $900.00 ($1,000 - $100 Deductible).
Cyber Coverage – STRONGLY CONSIDER
According to an FBI report, there were 847,376 complaints of cybercrime reported by the public in 2021, which was an increase of 50% compared to the prior year. Since COVID cybercrimes have increased 600%, with the primary target being small businesses.
What kind of cybercrimes is being launched at small businesses?
- Ransomeware - A type of malware that prevents or limits users from accessing their system, either by locking the system's screen or by locking the users' files until a ransom is paid
- Extortion - Recipients are told that their personal information will be released to their social media contacts, family, and friends if a ransom is not paid. The recipient is then instructed to pay in some form of currency (such as bitcoin) with an extremely tight deadline.
- Malicious Code - Any code in any part of a software system or script that is intended to cause undesired effects, security breaches, or damage to a system. Malicious code examples include computer viruses, worms, Trojan horses, logic bombs, spyware, adware, and backdoor programs
- Data Breach - An incident where information is stolen or taken from a system without the knowledge or authorization of the system's owner. A data breach exposes confidential, sensitive, or protected information to an unauthorized person. The files in a data breach are viewed and/or shared without permission.
- Social Engineering/Fund Transfer Fraud – Cybercriminals use various tactics through phishing, malware, pretexting, vishing, etc. to trick you into divulging sensitive information. Fund Transfer fraud may not be the most common cybercrime but when it happens it is the most damaging to small businesses. If a Fund Transfer Fraud occurs, it is rare to recover any of the stolen funds.
If you fall victim to any of the above cybercrimes the cost to investigate, control, and mitigate the loss can be very expensive. The smallest of breaches can cost thousands to investigate. One small business had an email account breached and was $125,000 to just investigate the depth of the breach.
The cyber coverage offered through the Beauty and Bodywork Insurance Program provides $100,000 of coverage for $79.00 per year. This is a great bargain for the coverage. If you are needing additional limits of cyber insurance, it can be provided through an affiliate partner.
We have provided additional information on the core insurance offered through the Beauty and Bodywork Insurance Program. If you need any additional coverage not provided on the platform please call our customer service team and they will be able to assist you or point you in the direction to get the coverage you need. They can be reached at 877.536.7290.
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