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Insurance Checklist: Are You Fully Covered?

bySean Brownyard | July 28, 2017
Sean Brownyard

Sean Brownyard

Between navigating customer requests, posting the requisite Instagram #nailart photos, and ordering supplies, some business affairs just fall off your radar. For many people, insurance is one of those things. In fact, you may not have thought about your business insurance policy since you purchased it. So, how do you know what coverage you have and what you need?

First, consider what services you offer beyond traditional manicures, pedicures, and acrylic sets — both personally and as a salon. Do you offer any of these services or amenities?

  • Hair removal, including waxing, electrolysis, and threading
  • Micro-blading
  • Eyelash or eyebrow dyeing
  • Complimentary alcoholic beverages with services
  • Massage services
  • Cuticle or callus removal that involves cutting the skin. (Services that pierce or cut the skin tend not to be covered.)

If you have added any of these services over the years but neglected to let your insurance agent know, your business insurance policy may not cover them.
Also consider employment and management practices:

  • Are all nail techs at your salon licensed?
  • Are those performing skin care, massage, hair removal, or other aesthetic services licensed properly?
  • Do you have a copy of appropriate licenses for staff and contractors?
  • Do employed staff members performing services have their own insurance? (Employees are likely covered under the salon’s policy.)
  • Do booth renters and independent contractors have their own insurance?

Employing only licensed, qualified staff and contractors ensures your insurance coverage applies; many professional liability policies exclude services performed by unlicensed practitioners.

You can probably tick off the boxes above without looking at your insurance policy, but it’s important to know what the policy actually says. Here are some things to look for:

  • Are all employed staff members covered under your insurance policy?
  • Are booth renters and independent contractors covered under your insurance policy?
  • Does your insurer require you to cover booth renters and independent contractors under your policy?
  • Is your address accurate?
  • Have you updated your insurer with all employees and contractors?
  • What services, techniques, or business practices are excluded from your policy?
  • Are you covered for all the services your staff and contractors perform?

If you have a standard business owner’s policy (BOP), the answers to the last two questions may be “everything” and “no.” BOPs are intended to cover general liability risks, such as property damage and slips and falls. To be covered for the services performed, you need professional liability coverage, which may be available as an endorsement or — through a specialty insurer — as a cost-effective package with the general liability policy.
If you’re uncertain whether your coverage is complete, your insurance agent can help you review your policy and identify any gaps in coverage or other red flags. It is in their best interest as much as yours that they help you close the gap between your business realities and your insurance coverage.

Sean Brownyard is executive program manager for SASSI, Salon & Spa Specialty Insurance Agency (www.sassiagency.com).

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