Money Matters

What Is Liability Insurance and Why Do You Need It?

Learn the difference between general liability insurance and professional liability insurance — and why you need them both.

You’ve worked hard to build a successful nail salon. Your clients are happy with you and keep coming back, and you have good employees who work hard. It’s important to protect what you’ve worked so hard to build, and the best way to do that is with liability insurance. Here’s what you need to know.

What is liability insurance?

Liability insurance protects you from a covered claim or lawsuit by someone else because they were injured or had property that was damaged because of you. It could be a client, a vendor, or just someone walking by your salon. In other words, if someone says that you are liable, or responsible, for something that negatively impacts them, you might have to pay for their loss. Business liability insurance could protect you by paying the costs you are responsible for.

What kind of insurance do I need?

Two basic kinds of liability insurance are general liability insurance and professional liability insurance. To be fully protected, you should have both of them.

General liability insurance protects you against covered claims for bodily injury, property damage, and personal injury. This means that if someone is hurt in your salon because she slipped on a wet floor, your general liability insurance could pay for her medical expenses. If one of your technicians spills nail polish remover on a client’s brand new designer handbag, your policy could cover the cost to replace it. You could even be covered if one of your staff spreads gossip about a client and the client sues you for slander.

Professional liability insurance protects you from claims that you did something you shouldn’t have, or you didn’t do something you should have, as part of doing business. Professional liability insurance is sometimes referred to as errors and omissions, or E&O, insurance.

If one of your clients has a bad reaction to a new product or treatment and sues you because she lost time from work, your professional liability policy could pay for a lawyer to defend you, as well as pay costs that you agree to or that you are ordered to pay by the court. You can be sued even if you haven’t made a mistake, and without a professional liability insurance policy, you would have to pay your defense costs as well as any settlement or judgment.

What Else Should I Know?

If you have liability insurance, you’ve taken an important step toward protecting the business you’ve worked so hard to build. To make sure that you continue this valuable protection, you’ll want to review your insurance coverage when:

  • You add new employees
  • You add new services or techniques
  • Your revenue increases by 20% or more
  • You expand your salon or move to a new location

Business liability insurance isn’t very expensive, especially when you consider what is at stake. A lawsuit could cost you money, time away from your business, and damage to your reputation. Protect yourself with the right liability insurance coverage.

Assistant marketing manager Suzie Smith manages partnership marketing for international specialist insurer Hiscox. Hiscox provides small business liability insurance tailored for nail salons and other beauty professionals. For more information, visit www.hiscox.com.

Underwritten by Hiscox Insurance Company Inc., a Chicago-based insurance company. Coverage is subject to underwriting and the terms, conditions, and limits of the insurance policy, and is not available in all states.

This information is provided to assist in understanding the coverage we offer and does not modify any insurance policy, nor does it imply that any claim is covered.

The contents of this article and the linked materials do not offer legal, business or insurance advice related to the needs of any specific individual business.

 

 

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