In this sue-happy age, it’s expensive to defend yourself even when you’ve done nothing wrong. Smart, independent hair stylists realize that being named in a lawsuit is not worth risking your career. As a booth renter, you probably know that you will need insurance, but did you know there are several types of insurance and you may need different policies for different risks?
What is liability insurance?
So first, what exactly is liability insurance? What does it do? Why is it important? Liability insurance is a policy that protects you when you are being sued and/or being held legally liable for claims of negligence resulting from damage or injury to a person or property.
Simply put, you’ve been negligent in some way at work, and it resulted in injury to a guest or damaged their property in some way. Here’s information on liability insurance types.
What is Professional Liability?
Professional Liability is when a guest has been injured during the service you performed.
For instance, you curl their hair with a curling iron and accidentally burn them. Or while performing a chemical service, the color or perm solution accidently gets into their eye. Guest accidents happen and professional liability insurance can protect you.
What is Product Liability?
Product Liability is when a guest has suffered an allergic reaction caused from a product used on them or sold to them for at-home use.
An example of this is scalp irritation from a shampoo or styling product you recommended for them to use at home.
What is General Liability?
General Liability is when a guest has been injured during a slip and fall, or due to faulty equipment, including damage to guest’s property.
An example of this is when you finish cutting a guest’s hair, you forget to sweep and the guest slips and falls on the wet pieces of hair on the floor. Another example of when you would need general liability insuranc is coloring a guest’s hair and permanent color stains the collar of the guest’s shirt.
Business Personal Property Insurance
Business Personal Property (BPP) Insurance is contents coverage for your business. This valuable insurance meets the solo esthetician’s needs in the event of equipment loss due to a fire, flood, or theft.
Shared Vs. Individual Coverage
To be sure your liability insurance coverage is your own and is not shared with other policyholders, make sure the aggregate coverage on your policy is per individual, per year—not a shared master aggregate.
Why does this matter? If you purchase a policy with a shared master aggregate, it means you are sharing the liability insurance policy limits with fellow policyholders.
Let’s say your insurance provider has a particularly high number of claims in one year from their other customers and pays out several sizable settlements to those people. If you file a claim of your own later in the year, it’s possible there may be no money left to defend or settle your claim. With an individual aggregate liability insurance policy, the policy limits are available to you (and you only) for the entire policy year.
Occurrence Form Vs. Claims-Made
Also ask if the liability insurance policy is a claims-made policy or an occurrence form policy?
Claims-made coverage requires claims be reported while your policy is in effect. If your policy has expired and someone makes a claim against you (even though you had insurance at the time of the incident), you will have no liability insurance coverage because your policy has lapsed. The insurance company also has the right to refuse to renew your policy. This could make it difficult to protect yourself.
Occurrence form means coverage continues for incidents that occur while you were insured, even if a claim is filed at a later date when your policy has lapsed. With occurrence form coverage, should you have a claim filed 23 months later, even though you no longer have a current policy, your policy will provide liability coverage for a covered claim.
Smart hair professionals realize that, while being named in a lawsuit is unlikely, it’s not worth risking your career. In this sue-happy age, it’s expensive to defend yourself even when you’ve done nothing wrong. Why chance it when excellent protection is so affordable?
Associated Hair Professionals (AHP) offers protection with the industry’s best value in liability coverage for hairstylists and barbers. For only $199 per year, you receive:
- $2 million per occurrence
- $6 million total per policy year (for YOU, not shared with other professionals)
- Covers professional, general, and product liability
- Covers you wherever you work, no matter how many settings