Esthetician Business Insurance: Costs And Types You Need (2024)

Running a beauty business presents plenty of unforeseen challenges. Consider these two scenarios: An allergic reaction leads to a facial client’s discomfort and potential liability claims, or an employee gets hurt while providing a pedicure.

Without the right type of esthetician insurance, your business could face serious financial consequences.

What Is Esthetician Insurance?

Esthetician insurance is a policy that has several types of small business insurance that’s tailored to meet the risks that come with the profession.

For example, if a client suffers an adverse reaction to treatment and sues your business, the general liability portion of your esthetician insurance would cover your legal costs.

Who Needs Esthetician Insurance?

Examples of professionals who can benefit from esthetician insurance include:

• Barber shop owners
• Beauticians
• Cosmetologists
• Estheticians
• Hair and nail salon owners
• Hairdressers
• Makeup artists
• Massage therapists
• Nail salons
• Spa owners

What Does Esthetician Insurance Cover?

Esthetician insurance includes several types of small business insurance that cover a wide range of problems, such as accidents, lawsuits, stolen inventory, damaged tools and lost income.

A good place to start is with a business owners policy (BOP). A BOP establishes a strong coverage foundation by combining three essential coverages, and it’s usually cheaper than buying each coverage type separately.

Here are the three types of coverage included in a BOP. You can add extra coverage on top of a BOP to customize it your own business risks.

Business Liability Insurance

This is the foundation for your esthetician insurance policy. It covers accidental injuries and property damage to others, as well as coverage for problems such as advertising injury, copyright infringement and reputational harm.

For example, if a client slipped on a wet spot in your spa, the general liability portion of your policy would cover their medical bills.

Commercial Property Insurance

Commercial property insurance covers the physical location of your esthetician business and your business equipment, like your tools and inventory. It covers problems such as fires, storms, theft and vandalism.

Business Interruption Insurance

If you have to temporarily close your esthetician business due to a problem covered by your policy (like a theft or fire), business interruption insurance covers your lost income. This coverage type is also known as “business income insurance.”

Other Small Business Insurance Types

A BOP is a great start to your esthetician insurance plan, but you’re going to need to augment your policy with additional coverage types.

Here are several types of coverage you might want to consider incorporating into your policy.

Commercial Auto Insurance

If you use a vehicle for your esthetician business, you’re going to need a commercial auto insurance policy. Your personal car insurance policy won’t cover work-related accidents.

Like a BOP, a commercial auto policy combines several coverages into one policy. Here are some of the types of coverages you can expect to see:

• Bodily injury liability. This covers accidental injuries to others that you or your employees cause.
• Property damage liability. This covers your business against accidental damage caused to other people’s property by you or your employees.
• Combined single limit (CSL). This coverage uses only one limit for claims involving injuries and damage to property, making it simpler than having separate limits.
• Medical payments and personal injury protection (PIP). When you or your passengers suffer injuries in an accident, this covers medical expenses, regardless of who was responsible for the accident.
• Collision insurance. This policy covers repairing or replacing your vehicle if you or your employees are involved in a car accident.
• Comprehensive insurance. This type of coverage handles repair or replacement expenses for your vehicle due to events like theft, vandalism, fires or floods.
• Uninsured motorist (UM)/underinsured motorist (UIM) coverage. If someone without car insurance or not enough car insurance crashes into you, this pays for you and your passengers medical bills. In some states, you can add UM to pay for damage to your vehicle caused by an uninsured driver.

Commercial Umbrella Insurance

Commercial umbrella insurance is an extra layer of protection on top of your general liability insurance. For example, if your esthetician gets sued for $800,000 and your general liability limit is $500,000, umbrella insurance would cover the $300,000 shortfall.

Errors and Omissions Insurance

Errors and omissions insurance (E&O) covers your esthetician business for claims of professional mistakes and services, even if the claims have no merit. For example, if your esthetician business gets sued because your treatment plan fails to deliver promised results, your E&O coverage would pay for your legal costs.

Errors and omissions is also called professional liability insurance.

Hired and Non-owned Auto Insurance

When you or your employees use a personally owned or rented vehicle for business, this insurance covers injuries and property damage accidentally caused to others. For instance, if your employee drives a rented car to haul supplies from one salon to another and crashes into someone’s pickup truck, this coverage could kick in.

Workers’ Compensation Insurance

Workers compensation insurance is required in most states, even if your esthetician business has only one employee. If your employees get sick or hurt while performing job-related duties, workers comp covers expenses such as lost wages, medical care and physical therapy.

What’s Not Covered by Esthetician Insurance?

Esthetician insurance policies do not cover every unforeseen incident. Here are several common exclusions:

• Deliberate or fraudulent acts.
• Earthquakes (you’ll need to buy a separate earthquake insurance policy).
• Floods and earthquakes (you’ll need to buy a separate flood insurance policy).
• Government confiscations.
• Infectious diseases.
• Radioactive fallout
• War.
• Wrongful dismissal (unless you have employment practices liability insurance).

Examples of Esthetician Insurance Claims

Different types of problems at your esthetician business will trigger different coverage types. Here’s a look at some examples of claims and the coverage type that would apply.

How Much Does Esthetician Insurance Cost?

Esthetician insurance costs less than $70 per month for a business owners policy, according to Insureon. Nearly a third (30%) of beauty and personal care professionals pay less than $50 per month and about half (46%) pay between $50 and $100 per month.

Your esthetician insurance costs will vary depending on cost factors such as:

• The types of coverage you buy.
• Types of services provided.
• Kinds of business equipment and property.
• Revenue.
• Geographical location.
• Employee count.
• Claim history.

Example of the Cost of Esthetician Insurance

6 Ways to Save on Esthetician Insurance

Here are six things you can do to lower your costs for esthetician insurance.

1. Compare business insurance quotes. While many insurance companies use similar factors to set rates, each has its own way of calculating them. That’s why it’s important to compare several business insurance quotes to find a good price.
2. Bundle your policies. Combining coverage types can help you save money—for instance, a BOP bundles general liability, commercial property and business income insurance. Buying a BOP can be cheaper than buying three separate policies.
3. Increase your deductible. Your insurance deductible is the amount that’s subtracted from your claims check. You can save on your business insurance premium by selecting a higher deductible.
4. Verify worker categorization. Creating detailed job descriptions for your staff and having them only perform duties within their classification can help you save on workers compensation insurance. You can speak with your insurance agent if you’re not sure how to classify your workers.
5. Create a safety program. You could qualify for savings if you create, document and implement a safety program.
6. Pay your premium in full. You might be eligible for a discount by paying your entire premium upfront instead of every month.

Where Can You Get Esthetician Insurance?

To put together an esthetician insurance policy, you’ll need a good mix of coverage types to meet your industry’s risks. Small business insurance companies include:

• Acuity
• Allstate
• American Family
• Auto-Owners Insurance
• biBERK (Berkshire Hathaway)
• Chubb
• Frankenmuth Insurance
• Hiscox
• Nationwide
• Next Insurance
• Progressive
• State Farm
• The Hanover
• The Hartford
• Travelers

Esthetician Insurance FAQ