Cosmetology Insurance Guide

Q: Do I need my own insurance for my cosmetology services if I rent space or a chair in someone's salon?

A: We recommend that, as an independent contractor/self-employed professional, you have your own insurance. Since most salon owners who rent booths do not provide insurance for independent contractors, you could be risking your income and professional reputation by not having insurance.

Q: When should I buy liability insurance?

A: Since many locations request if you are self-employed that you carry your own coverage even before you start at their location, you should consider buying insurance when you are actively pursuing a location to provide cosmetology, currently at a location providing service, or even as a student when you are being trained and waiting for your license.

Q: Where can I find the best rates for liability insurance in the field of cosmetology?

A: The most AFFORDABLE rates are provided by national associations or groups because of the larger numbers of professionals in the association and the flexibility to cover all 50 states.

To save even more money, be part of an association that covers several services on one plan and that offers part-time discounted rates.  

 Also, check with the association to see if they offer match pricing programs and can lock in your rate as long as you are a member so your rates do not increase. 

Q: What are the types of liability I should have? 

A: The most common types of liability for a cosmetologist are professional and general liability.

Professional Liability, also known as malpractice insurance, protects you and your business for loss or expense resulting from claims of professional errors, mistakes, or failure to perform professional duties committed or alleged to have been committed by the insured in his or her professional activities.

General Liability is a form of insurance designed to protect practitioners from liability exposures arising out of accidents occurring on the premises, such as if a visitor slips and falls. 

Q:  How much coverage (insurance) should I have?

 A: The most common plans include professional and general liability, which includes $2-3 million annual aggregate and are occurrence and claim based programs. 

Q: What is occurrence type coverage? 

A: Insurance that pays claims arising out of incidents that occur during the policy term, even if they are filed years later or if the policy is no longer in effect.  

Q: What is “claims made" coverage? 

A: A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. 

Q: How quickly can I get insurance coverage and proof?

 A: If purchased online, most association applications are approved instantly or in as little as 2-3 business days.

Several associations do not offer same day processing by phone or mail, so check with the association representatives about how long it may take if you choose this method. 

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Q: How do I know if the insurance carrier is stable and legitimate?

A: You can review the rating of any insurance carrier by visiting rating agencies such as A.M. Best Company, Standard & Poor’s, or Weiss Rating. Look for an “A” rating or better. Alternative Balance uses Lloyd's of London, one of the oldest and most highly rated insurance carriers out there. You can visit their A.M. Best rating page here.