Salon Booth Rental Insurance: What Independent Stylists Should Know

When clients enter a salon, they’re focused on their cut, color, and treatments. They might not even realize that the stylist they’ve been seeing for years is an independent stylist and not an employee of the salon.

Appearances are often tied to our sense of self, which is why when something at the salon goes wrong—a bad cut, an allergic reaction, or an injury—there’s a risk of litigation.

What is salon booth rental insurance?

Salon booth rental insurance is a form of business insurance for independent stylists and hairdressers, designed to protect those who rent space in salons.

Salon owners who offer rental space in their businesses typically require independent stylists to carry their own insurance policies. So, having salon booth rental insurance is likely to be part of the agreement you have with the salon at which you rent booth space.

Salon booth rental insurance is important coverage to have, protecting you from client lawsuits and other potentially costly events.

What is known as “salon booth insurance” is typically a group of policies targeted to small businesses, tailored to meet the needs of hairdressers, aestheticians, manicurists, and other independent workers in the beauty industry.

What are the differences between independent stylists and salon employees?

There are both state and federal laws that make the distinction between independent stylists and salon employees. While some of the distinctions may seem confusing, they are important to understand. Stylists who work at a salon are either salon employees or they are self-employed. Those are the only two categories recognized by the IRS.

Some salons have a mix of independent stylists and salon employees. Frequently, this is done so that they can offer specialized services with the flexibility and cost-effectiveness of having both contractors and regular employees.

The most apparent distinction between salon employees and independent stylists is that salon employees are on the salon’s payroll. As their employer, the salon pays the required taxes and mandatory insurance coverage, like worker’s compensation and unemployment insurance.

In contrast, independent stylists are self-employed, acting as small businesses. They receive revenue directly from clients and pay their own taxes.

When independent stylists rent a booth at an established salon, they are operating as commercial tenants.

How do these differences affect insurance?

One example of how the differences between independent stylists and salon employees can affect insurance is the question of who holds client data.

In a salon where the stylists are employees, the salon, as the employer, maintains the appointment calendar, client contact information, and payments.

Independent stylists control their own calendars, client lists, and payments. This is now frequently stored electronically, which introduces a risk of a data breach—and the need for data breach insurance coverage.

Another example of how differences can impact insurance is equipment and tools of the trade. Salons with employee stylists provide the products and tools that are used. Independent stylists provide their own tools, products, and equipment, which means that they will need to carry insurance that provides coverage for those items in the event of theft, loss, or damage.

These are just two small examples of how being an independent stylist can affect risks and change your insurance coverage needs.

Why do independent stylists need insurance?

Business insurance is important, regardless of your industry or the type of work you do. No one wants to be overly focused on what could go wrong, but there are risks involved in virtually every industry—including the beauty industry.

The risks are perhaps greater than most people realize. Working with chemicals and strong dyes, using sharp scissors and razors around people’s faces, and sensitive skin on the face and scalp—each of these elements represents a chance for an accident or damage.

As noted earlier, independent stylists also need to consider risks like data breaches and theft of their equipment.

What types of insurance coverage do independent stylists need?

General liability and professional liability form the core of insurance coverage. These two types of liability coverage protect independent stylists from claims arising from personal injury at the place of business, property damage, reputational damage, and mistakes that you might make in the course of providing services.

Independent stylists need both of these types of coverage, particularly as it relates to injuries.

• General liability protects against injuries that happen at the salon, such as someone tripping over a cord at your booth that results in a sprained wrist when that person falls.
• Professional liability covers injuries that are a result of you providing a service, such as a burn from a styling tool, or an allergic reaction to a product you use.

While both provide coverage for medical expenses, the risks are different, so both are necessary.

Independent stylists may also want to consider asking their insurance agents about the following coverages:

Property insurance – Depending on what your booth rental contract with the salon says, you might want to consider additional property insurance. General liability will cover if a third party (like one of your clients) damages salon property, but if you break equipment or damage the flooring, you might need additional insurance.

Business Interruption – As an independent business owner, your earnings are tied to your ability to work. If something happens that prevents you from providing services to clients, having business interruption insurance can help you bridge that lost income.

Tools and Equipment – Independent stylists make considerable investments in the tools and equipment they use at their booths. Insurance coverage can protect these high-value items from accidental damage and theft.

Product liability – As a stylist, your clients may look to you to provide advice on which products to use, and if you combine or blend products for customized treatment, this is important coverage to have. In the event a customer has an allergic reaction, this coverage is designed to protect you from lawsuits arising from product injuries.

Data breach – Everything from scheduling to payments can now be done electronically. With that comes the risk of data breaches, so it is important to have this coverage.

How much does salon booth rental insurance cost?

As with many forms of insurance, your premium costs are heavily affected by existing risks. Some of this will vary depending on where you rent your booth space. States regulate insurance products, and many states regulate licensing for stylists, and both of these can impact insurance costs. Prior claims will also be considered in calculating a premium, along with any additional add-on coverages you select.

There is a lot to consider when securing salon booth rental insurance. If you want some quotes to see how much booth renters insurance will cost, call the experts at Rate Insurance. They’ll talk to you about your work and find you the right coverage at the best price, so you can focus on growing your business.

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