What salon and spa insurance does a beauty business need? Three Types of Insurance Needed in a Salon

In 2018, a nail technician accidentally cut a client’s toe while performing a pedicure. 

The client thought it was a typical infection that would heal without medical intervention. It didn’t. Instead, it became infected, Arielle Tschinkel wrote for Shape. Still, she decided to wait it out. 

After a few weeks of waiting, she went to the ER, doubled over in pain. Doctors had to amputate multiple toes and part of her leg to remove a serious infection, Tschinkel wrote. Amid all the medical expenses, she lost her home, ability to walk, and ability to take care of her young child, Tschinkel and the Associated Press reported. 

At first, the salon fought back. It turns out, she had a severe, preexisting circulatory condition that amplified the spread of the infection. They blamed her for not seeking immediate medical care. But ultimately, the salon settled for $1.75 million.

Imagine if this business didn’t have adequate salon and spa insurance. Either the salon (or the client) would’ve been stuck paying unthinkable legal and medical fees–which actually happened in an identical nail salon case.

Accidents happen fast. That’s why salon and spa insurance should be paramount when starting a beauty business—not an afterthought.

Why do you need salon and spa insurance?

Insurance isn’t always the first expense that comes to a budding business owner’s mind. You’re investing in products and supplies, furniture, equipment, marketing, licensing, permits, and potentially employee salaries and training. On top of everything else, why do salons need insurance?

First, it could be a mandatory box to check. If you run a salon, regulatory bodies may require proof of insurance to rent a space, hire employees, get a beauty or business license, or take out a loan. In Idaho, for example, insurance is a prerequisite to getting your esthetician license.

But perhaps the most valuable incentive of salon and spa insurance is peace of mind.

Many salon experts agree that the scariest part about starting a new business is facing the unknown. And potential claims are not only a significant unknown expense, but are also difficult to prevent. Luckily, if an error, client injury, or other accident leads to a claim against your business, beauty salon insurance coverage takes the defense and fees off your shoulders.

To properly explain the need for insurance in a salon, we need to break down the scenarios. Here are the three types of insurance needed within every salon and their importance.

3 Types of Insurance Needed for Salons and Spas

Before we examine the three most important types of insurance for beauty salons, note this list is not exhaustive. We don’t know your unique circumstances, like if you’re a nail tech who works from home or a hair stylist renting a studio space. 

In this post, we’re only addressing the types of salon owner insurance that apply to every beauty business owner. For information about a type of salon insurance not mentioned here, consult your state board or your insurance provider.

Now, here are the three types of insurance needed for a beauty salon.

1. Professional Liability Insurance

Professional liability insurance protects you if you make a mistake while performing a service. (If this name doesn’t look familiar, it also goes by professional indemnity or errors and omissions, E&O.)

Here’s how it works. Imagine your client is a bride who wants the bouncy, classic curls of Taylor Swift’s “Speak Now” era. They show you their inspo pics from social media. You try to explain that their fine, straight, jet-black hair won’t look exactly like Taylor’s after their three-hour cut and style appointment. But the client has their heart set. 

This could be a “Don’t say yes, run away now” moment, as Taylor would say. However, you give it your best effort. In the end, the client accuses you of an incomplete service. In fact, she’s so disappointed, she accuses you of ruining her entire wedding day.

Other examples include:

• Eyelash extensions gone wrong lead to vision loss and a $9,000 settlement.
• Clients get rashes, lifted skin, burns, or even illnesses from waxing.
• A stylist accidentally overprocesses a client’s hair, burning her hair and scalp. Her claim settles for $200,000.
• One man accuses a hotel spa of giving him MRSA during a facial.
• While a woman dips her hands in hot wax, an exposed wire ignites the wax. The woman’s hands burn, and she sues the salon for one million dollars.
• After ignoring a client’s request to avoid her head and neck, a massage therapist causes a herniated disc.
• Your client accuses you of poor nail salon safety and hygiene after she’s hospitalized for MRSA.

Whether it’s a bride demanding a refund, an unfortunate dye job, or a bad haircut, you need coverage. Professional liability salon and spa insurance protects you from accusations of negligence, or not doing your job correctly.

2. General Liability Insurance

General liability insurance protects your business from claims involving injuries or property damages to third parties. 

These accidents can happen to any beauty pro at any time. Here are some examples we mention on our blog:

• A client is immobilized for nine months after slipping at a hair salon.
• Allergic reactions or even poison risks from aromatherapy services and other products used on clients.

If you cause harm to a client or their property, you’ll want general liability salon business insurance. Here at WellnessPro, our general liability insurance also covers damage to premises rented to you. 

3. Product Liability Insurance

Selling and recommending skincare, hair, or nail products can help you build trust and credibility with your clientele. But what would happen if your favorite skin cleanser broke out a client days before an important business trip? Or if the nail polish you sold turned out to have hazardous chemicals? What insurance does a beauty salon need for product-related incidents like these?

Salon and spa insurance covers more than your services. It can also cover you for claims involving products you use or sell in your salon. Please note, this does not include products you’ve manufactured, relabeled, or repackaged yourself. The products must come from a different manufacturer. Learn more about product liability insurance coverage here.

Get Salon and Spa Insurance – Protect Your Salon and Spa Business Today

Claims can cost tens of thousands of dollars to resolve and pay out. These costs can be enough to drive a small salon out of business.

So if starting a beauty business is on your 2025 vision board, don’t go in blind. Instead, get ahead of difficult, irate customers and unfortunate accidents with WellnessPro. 

Fill out a free application and get the types of salon and spa insurance you need here.