Nail Salon Insurance: How To Keep a Fresh Coat of Polish on Your Business

Nail salon insurance provides liability coverage for manicurists and pedicurists in case they injure a customer or damage their property. It can also cover equipment, tools and the salon itself in the event there’s a covered accident such as a fire or break-in.

See what coverage options are available and how much you can expect to pay for nail salon business insurance.

Key Takeaways Nail salon insurance can vary in terms of the type of coverage but usually includes general liability and professional liability coverage. Nail salons face liability risks due to close client contact, tool usage and chemical usage. Inadequate insurance coverage can leave nail salons vulnerable to financial losses and potential closure if a customer sues the business. With 20% of commercial claims involving theft, having property insurance ensures your tools and equipment are covered. The cost of nail salon insurance will vary depending on your location, claims history and the type of insurance you purchase.

What Is Nail Salon Insurance?

Nail salon insurance is commercial coverage for cosmetologists that protect their business from liability and property damage claims. Without insurance, the nail salon professional is on the hook financially for various claims such as a customer getting an infection after being cut or the salon burning down in a fire.

How Does It Protect Nail Technicians?

If a nail technician is employed through a salon, the salon’s commercial insurance policies will usually extend to the employees. So if a nail technician spills nail polish on a customer’s expensive dress, the salon’s liability insurance policy should cover the cost of fixing or replacing the dress.

However, if you’re an independent contractor — a nail technician who does manicures as a side gig, for instance — then you will need to buy your own insurance.

What Kind of Insurance Does a Nail Salon Need to Have?

Nail salons have a buffet of insurance options, including general liability, business interruption and even more exotic types of coverage you may not have considered. See our list below for details on the many insurances that help cover the 56,300 salons in the United States.^[1]

Business Owners Policy (BOP)

Business owners policies combine general liability, commercial property and business interruption insurance into a single package (more on these below). BOPs are typically cheaper than buying each coverage individually and offer a convenient base level of protection for nail technicians looking to start a new business.

General Liability Insurance

General liability is bodily injury, property damage and personal injury (advertising injury) protection rolled up into one policy. For example, this policy could pay for a patron’s medical bills if they slip and fall in your salon or cover their repair bill if you accidentally knock their phone off the table.

Commercial Property Insurance

Commercial property insurance protects your nail salon and all business items inside it, such as nail polishes, inventory and tools, from dangers like fires, riots and theft. You can rest easy knowing that your UV gel nail polish dryer lamps will be replaced if a thief breaks in and absconds with your equipment. In fact, 20% of commercial claims involve theft according to The Hartford.^[2]

Keep in mind that commercial property claim payouts are based on the lost item’s actual cash value (ACV), which deducts for depreciation and wear and tear.

You can get coverage to replace the lost items at today’s off-the-shelf price instead of its ACV but it will cost extra.

Business Interruption Insurance

Business interruption covers lost wages, loan payments and expenses associated with temporarily relocating your business in the event of a falling object, explosion or extreme weather event that makes business operation impossible at your salon.

Professional Liability Insurance

Professional liability, or errors and omissions insurance (E&O), protects you and your business against claims of negligence and inaccurate advice. Consider a client that sues you for negligence after having been diagnosed with skin cancer on their hands, claiming the UV lamps resulted in the illness. Should the judge find in favor of the client, your E&O coverage would help cover your legal expenses along with any payouts.

Workers' Compensation Insurance

Workers' compensation insurance provides medical benefits and wage replacement for employees who cannot work due to a work-related illness or accident. Additionally, workers comp often comes with employment liability insurance, protecting the business if an employee sues because of discrimination or wrongful termination. Most states require businesses that employ workers to carry this type of coverage.

Other Insurance for Nail Salons To Consider

The coverages below help amplify your coverage, rounding out your protection and filling gaps.

• Commercial auto insurance: Protects mobile nail technicians and their vehicles from liability claims, provides repair or replacement of business vehicles and covers the injured passenger’s and driver's medical expenses depending on the policy's coverage. This insurance is required in most states.
• Cyber insurance: Provides financial assistance if a cyber breach compromises your salon business's information, including client details. Protection includes forensic investigations, litigation expenses, regulatory fines, crisis management expenses, lost revenues, cyber extortion payments and system improvements.
• Commercial umbrella insurance: Useful for high-cost claims, this coverage kicks in when the cost of a claim exceeds the limits of one of your other liability policies. For example, if your general liability policy is $500,000 and a claim costs $750,000, umbrella insurance will cover the remaining $250,000.
• Tools and equipment insurance: Covers business-related tools and equipment you own or rent from damage or theft such as manicure tables, nail dryers, nail drillers, etc.

Is Insurance for Nail Salons Required?

For nail salons, there are generally only two types of coverage required by law in most states. First, you need workers’ compensation insurance if you employ workers. Second, you need commercial auto insurance if you have a company vehicle.

In addition, those renting salon space may be required to have a specific type and amount of insurance by the landlord before conducting business. If you’re leasing or financing the real estate for your salon, then the lessor or lender may also require you to maintain commercial property insurance.

What Are the Potential Risks That Nail Salons Face?

Nail salon professionals face a myriad of risks in their day-to-day operation, ranging from liability claims by customers and damages to business property.

Cuts, Infections and Burns

Nail technicians come into physical contact with clients every day, using files, edged tools for cutting nails and tools with grinding bits.

Because of the intimate nature of the business, salons are left open to any number of liability claims, such as cutting someone with a nail file or accidentally using scalding hot water when soaking a client's feet.

There is also the risk associated with having contaminated tools. The cosmetologist's equipment serves several customers daily, 12 being the average.^[3] A nail technician who does not disinfect their tools and workspace between clients can easily transfer bacteria and possibly fungus from one client to another.

Illnesses

Nail salons have many chemicals they use when serving their clientele, including formaldehyde (nail polish), acetone (nail polish remover) and toluene (fingernail glue). Each of these chemicals can cause various side effects, such as headaches, dizziness, difficulty breathing, coughing, etc. These substances could be used against a salon in a liability case.

We mentioned earlier an example of someone getting skin cancer and linking it to UV lamps used in nail salons. According to the Skin Cancer Foundation, the UV rays in these drying lamps are the same type of radiation linked to premature skin aging and skin cancer.^[4] Even if the amount of UV someone gets from these lamps is minimal, claims of negligence can be quickly filed against salons using these tools.

Damages to Salon Property

There are of course, various natural and manmade perils that can cause damage to salons, including windstorms, fires, riots, thievery, vandalism, etc. Without proper coverage, a salon must cover the damage costs independently, potentially leading to permanently closed doors.

How Much Does Nail Salon Insurance Cost?

What you pay for coverage will depend on your location, how long you've been in business and your claims history. The types of insurance you choose will also affect your price.

For instance, a general liability policy can average between $30 and $142 per month.[5] Now, let's say you add E&O coverage for another $25 to $208 monthly.^[5] As a result, the amount you pay goes up every time you add something new to your plan or increase your limits.

How Do I Get Insurance for My Nail Salon Business?

Here are some basic steps that will help you get the nail salon coverage you need:

1. Identify your insurance needs: Common insurance policies for nail salons include general liability insurance, professional liability insurance, property insurance, workers' compensation insurance and business interruption insurance.
2. Obtain multiple quotes: SmartFinancial is the easiest and best way to get multiple quotes simultaneously. Provide information about your nail salon, including its size, location, number of employees and any other relevant details and you can get matched with a policy within minutes.
3. Compare coverage and costs: Look at the coverage limits, deductibles, exclusions, premiums and any additional benefits or features.
4. Check the insurer's reputation and financial stability: Look for customer reviews, ratings from independent rating agencies and any information that can help you assess their reliability.
5. Purchase your insurance policy: Carefully review the policy documents, ensure all necessary coverage is included and make the required payment.
6. Review and update your coverage annually: Regularly review your insurance coverage to ensure it adequately protects your nail salon. Update your policies as needed to reflect changes in your operation or location.