Do Cosmetologists Really Need Liability Insurance?
The age-old question: do I really need to get liability insurance as a cosmetologist? Especially starting out, it can be very tempting to weigh insurance as a luxury.
You’ll be extra careful, so why bother with having something you may never need, right? Today’s spotlight series seeks to answer this weighty question and settle once and for all if cosmetologists really need liability insurance.
What Does Cosmetology Insurance Actually Do?
Whenever you begin your career, you have the option whether or not to get cosmetology insurance coverage. You can even get cosmetology insurance for students while you’re still in school. This decision means investing in a legally-binding contract with the insurance provider for them to pay up to a certain amount for the different types of claims covered in the policy.
As a policyholder, you have the right to file a claim to your insurance provider when you experience a covered loss event. Covered losses vary significantly based on your policy so step one is always understanding what you’re getting.
We talked about insurance policies being a contract. This contract spells out exactly what each party is responsible for. Liability insurance says that the insurance company will cover the cost of different liabilities that can bring about a claim.
The “big 3” liabilities facing cosmetologists today are general liability, professional liability, and product liability.
- General liability is the coverage that applies to the most amount of different scenarios, hence the name. This coverage is known to many as “slip and fall” insurance since that’s a common example of a claim that could happen to any business owner. Even frivolous claims against you can require thousands in legal defense fees. Insurance from Beauty Insurance Plus covers the costs of the claim, as well as legal defense fees, when necessary.
- Professional liability is more specific towards the actual services you provide as a professional cosmetologist. When performing any number of different treatments on the hair, nails, or skin, you’ll be utilizing a variety of tools and chemicals in some pretty sensitive areas. One small accident can cause serious injuries. Adding up medical bills, lost wages, and other costs means a professional liability claim could easily run into the thousands.
- Product liability pertains to products used during treatments that bring about an adverse reaction in your client. If a client has a severe allergic response to your products, they may hold you liable for their treatment costs.
So, your insurance policy is a contract that spells out how you’re covered for these three areas. While it may seem like a lot, it’s important to look for coverage with at least $2 million in professional and general liability coverage. After many years working in the beauty industry, we’ve found this level of coverage to be adequate for the level of risk facing today’s professionals.
What’s Inside A Cosmetologist Insurance Policy?
Opening up an insurance policy may sound like a recipe for a good night’s sleep, but understanding what the terms and conditions mean in your policy is the best way to safeguard your future as a cosmetologist.
Within your insurance policy, you’ll find how the company defines and uses insurance terms, your insurance agreement, the limits of liability (coverage limits), and other explanations for the full agreement. We’ll dig deeper into how to compare cosmetology insurance plans later but know that not all plans are created equal. Important provisions to look for include whether the program uses occurrence form coverage, has hour qualification or CE requirements, additional protections, and everyone’s favorite - what member benefits are included.
It can sometimes be hard to know what all you’re getting and how much the program will actually cost. We decided a long time ago that straightforward was the best way to manage a cosmetology insurance program. That’s why we put our prices and coverage prominently on our site so you can see for yourself if our program is right for you.
In a solid cosmetology insurance program, you should be able to easily identify key coverage highlights like:
- $2 million for each professional or general liability insurance claim, up to a $3 million individual annual aggregate
- $2 million on product liability coverage
- $100,000 in rental property damage protection
- $25,000 in identity restoration services
- $1,000 in stolen/damaged equipment services
Some companies make you fill out a long questionnaire in order to be quoted for insurance coverage and see everything that’s included. With Beauty Insurance Plus, our cosmetologist insurance program was meant to be easy to access.
We know cosmetologists are busy juggling a thousand and one things each day so made it easy to sign up, check out, and enjoy full insurance coverage in a matter of minutes.
Why You Should Compare Cosmetology Insurance Plans
Looking at one insurance company and back again to compare rates and coverage types isn’t a whole lot of fun but everyone knows that comparison shopping is the best way to get a good deal. Well, we decided to do a lot of the heavy lifting for our members-to-be by putting up the raw numbers right on our site. You can see a full rundown of different cosmetology insurance programs in a side-by-side comparison.
As a quick recap of our cosmetologist insurance head-to-head comparison, here’s the leaderboard:
- Highest professional and general liability limits ($2 million per occurrence): Beauty Insurance Plus, AHP, Hands On Trade Assoc., Insure Bodywork, Alternative Balance
- Occurrence form coverage included: Beauty Insurance Plus, AHP, NAMT, Hands on Trade, Next
- Stolen equipment coverage: Beauty Insurance Plus
- Identity Protection Plan: Beauty Insurance Plus
- Lowest student rate ($25 for 1 year): Beauty Insurance Plus
- Lowest professional rate ($145 for 1 year): Hands On Trade Association
Yes, you read that right. Hands On Trade Association does indeed offer an annual plan that’s $14 cheaper than Beauty Insurance Plus Remember, though, that you always need to make sure you know what you’re getting.
Comparing these two programs, a little more than $1 extra per month for an Beauty Insurance Plus gets you thousands in additional coverages and a member benefits worth hundreds by itself. Hands On does not include identity protection, coverage for stolen equipment, and the benefits plan listed on their site is limited.
We choose to publish our program alongside the leading competitors because we believe our members deserve transparency. We’re also confident once you see how our program covers you in so many different ways, at a solid, no-nonsense annual rate, and not to mention the awesome benefits that are included, you too will join the scores of cosmetologists insured by Beauty Insurance Plus that rate this program so highly.
Asking the Right Questions with Cosmetology Insurance
As your mind is being opened up to all the benefits that insuring your career with comprehensive insurance can bring, you should be asking these questions for the program you’re considering:
- Do you offer occurrence form coverage?
Occurrence form coverage is the industry choice and even so, several of the programs in our comparison still use claims-made coverage. Put simply, occurrence form coverage lets you still file a claim, even once your policy expires.
You can only do this for an event that happened during your term, but at least you don’t have to file while the policy is active and can wait until even after the policy expires. Claims-made is the opposite and requires you to file a claim while the policy is active for it to be considered. This important distinction comes down to timing and can mean the difference between full coverage and no coverage whatsoever.
- Do you have any additional fees on top of the published premium?
Some programs out there advertise a low upfront price only to have a host of additional fees like membership dues or even increased rates for certain services.
- What is your insurance program rated?
Make sure to see who is underwriting the program and their rating from a reputable rating firm like A.M. Best. This rating says how likely it is for the insurance company to be able to pay out on claims. Ideally, you want to see an “A” rating, which means they have all of the resources necessary to cover your claim - a comforting thought!
- What services are covered?
As with price, the actual services provided by the program are sometimes hard to find, if they’re even listed at all. Make sure to ask the insurance representative for a full listing of what services are covered under the program. Some companies may charge a premium or not provide coverage for a service that isn’t on their list.
Asking questions like these and getting honest answers is the mark of a good provider. A reputable cosmetologist insurance company will have no issues with answering all of your questions with satisfactory information regarding their program.
As with most things in life, when in doubt, ask. BIP has fully licensed agents standing by to walk you through whatever details of the program need more explanation.
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