Personal Care, Beauty And Cosmetology Insurance (2025)

Business insurance for personal care and cosmetology helps protect you and your clients. For example, if a client slips on water or a product in your salon and gets hurt, your insurance can help cover their medical costs. It also protects you if a client claims you made a mistake during a treatment or if there’s an accident at your workplace. This kind of insurance helps cover legal fees, accidents, and other problems so you can keep your business running smoothly.

Why Do Personal Care Businesses Need Insurance?

Personal care and cosmetology professionals need insurance because accidents can happen at any time, and without insurance, those accidents can be very expensive.

For example, imagine you accidentally spill hair dye on a client’s expensive clothing or damage their skin during a facial treatment. Without general liability insurance, you would have to pay for the damage yourself, which could cost hundreds or even thousands of dollars.

There’s also the risk of a client slipping on a wet salon floor, having an allergic reaction to a product, or claiming that something went missing. Business insurance works like a safety net, it helps protect you from the costs of property damage, injuries, or even lawsuits.

Insurance also builds trust. Many clients feel more comfortable working with beauty professionals who have insurance. Whether you’re working on your own or running a salon with a team, the right coverage helps you work with confidence, knowing you’re protected if something goes wrong.

What Insurance Do Personal Care Businesses Need?

Running a personal care and cosmetology business comes with more risks than many people think. You’re working closely with clients, using sharp tools, heat, and chemical products that can cause injury or damage. You may also be handling expensive equipment or operating in a rented space.

To protect yourself and your business, here’s a breakdown of the most important insurance policies to consider.

General Liability Insurance

What it is: This is the foundational insurance policy for most small businesses. It protects you from third-party claims of bodily injury, property damage, and personal injury.

What it covers: If you accidentally damage a client’s property or someone gets hurt because of your work, general liability pays for legal fees, repairs, or medical bills.

Example: A hairstylist accidentally spills hair dye on a client’s designer handbag. The client demands reimbursement for the damage. General liability insurance can cover the cost of replacing the handbag and any legal fees if the client decides to take legal action.

Workers’ Compensation Insurance

What it is: This policy covers your employees if they get injured or become ill as a result of their job.

What it covers: Medical bills, lost wages, rehabilitation, and even death benefits. It’s also required by law in most states if you have employees.

Example: One of your salon employees slips on a wet floor and breaks their wrist. Workers’ compensation insurance covers their emergency room visit and pays for lost wages while they recover.

Workers’ comp is required for personal care and cosmetology businesses with employees in almost every state. It helps protect both your team and your business when workplace injuries happen.

Commercial Auto Insurance

What it is: If you or your employees drive for business purposes, personal auto insurance likely won’t cover accidents. Commercial auto fills that gap.

What it covers: Vehicle damage, injuries, and liability if you’re involved in an accident while driving for work.

Example: One of your employees gets into a car accident while driving the company vehicle to a client’s home for an on-site beauty appointment. Commercial auto insurance covers the damage to both vehicles and any medical costs from the accident.

Personal care and cosmetology businesses pay an average of $143 per month, or $1,716 per year, for commercial auto insurance.

Business Owner’s Policy (BOP)

What it is: A BOP bundles general liability and commercial property insurance into one policy, often at a lower cost than buying them separately.

What it covers: Property damage to your business location or equipment, along with liability protection.

Example: A water leak at your salon damages beauty supplies and important client files. A business owner’s policy (BOP) helps you recover both the physical damage and the financial losses.

Professional Liability Insurance

What it is: Professional liability insurance (also called errors and omissions insurance) protects you if a client claims that your services caused them harm or didn’t meet professional standards.

What it covers: It covers legal fees, settlements, or judgments if a client says you made a mistake during a treatment, gave bad advice, or caused injury.

Example: A client claims they had an allergic reaction after a facial you performed and wants compensation. Professional liability insurance can help pay for legal costs and any settlement, protecting your business from financial loss.

Personal Care & Beauty Insurance Requirements

Personal care & cosmetology businesses are generally not mandated by federal law to carry specific insurance policies. However, certain types of insurance may be required depending on state laws, local regulations, and the nature of your business operations.

Workers’ Compensation Insurance

If you have employees, most states require you to have workers’ compensation insurance. It helps pay for medical bills and lost wages if an employee gets hurt or sick while working. In many states, this insurance is not required for private employers, but it’s still a smart way to protect both your team and your business.

Commercial Auto Insurance

If your salon or beauty business owns a vehicle used for work, like traveling to clients’ homes for mobile services, most states require commercial auto insurance. In some states, this type of insurance is required for any business-owned vehicle. It covers accidents, injuries, and property damage.

General Liability Insurance

This insurance isn’t required by law, but many landlords, clients, or vendors may ask for it. General liability protects your business if someone is hurt at your salon or if you accidentally damage their property. It’s highly recommended to help cover legal or medical costs.

Business Owner’s Policy (BOP)

A BOP combines general liability and property insurance into one policy. It helps cover damage to your salon space or equipment, and also protects you from lawsuits. It’s often cheaper than buying each policy separately.

Professional Liability Insurance

Also known as errors and omissions insurance, this protects you if a client says your service caused harm, like a skin reaction from a treatment or a haircut gone wrong. It helps cover legal costs and any settlements.

How Much Does Personal Care And Cosmetology Insurance Cost?

Insurance for a personal care or cosmetology business usually costs between $552 and $1,000 per year for general liability coverage. If you work alone and don’t have employees, your cost will likely be on the lower end of that range. But if you have a growing salon with staff, or you use a company vehicle, your insurance could cost more, sometimes over $2,000 a year, especially if you add other coverages like workers’ compensation or property insurance.

Several things affect how much you pay for business insurance. This includes your business location, how many employees you have, the type of services you offer (like haircuts, facials, or nail treatments), and your past claims history. If you use or travel with expensive tools and equipment, that can also raise your cost. The more risks your business has, the more coverage you may need.

While choosing the cheapest plan might seem like a good idea, it’s important to pick coverage that truly protects your business in case something goes wrong.

How Is Your Personal Care & Cosmetology Insurance Cost Calculated?

Insurance companies look at many things when deciding how much your beauty business will pay for insurance. One of the biggest factors is the size of your business. If you work alone, you’ll likely pay less than a salon with several employees.

The type of services you offer also matters. If you provide high-risk treatments, like chemical peels, laser services, or use strong products, your insurance may cost more. Your location can also affect your rate, since prices can change depending on your state, city, or even ZIP code.

Other things that affect your cost include your past insurance claims, the value of your equipment, and whether you use a company vehicle. The more claims you’ve made, the higher your risk, and the higher your price may be.

Tips To Lower Your Personal Care & Cosmetology Insurance Costs

Insurance costs can add up quickly for your personal care & cosmetology businesses, but there are practical ways to keep your premiums manageable without skimping on coverage. The key is to understand which factors you can control and take proactive steps to minimize risk.

• Bundle your policies. Combine general liability, property insurance, and other coverages into a business owner’s policy (BOP) to qualify for a multi-policy discount.
• Consider Hired and Non-Owned Auto (HNOA) coverage. If you or your employees use personal vehicles for work, HNOA can be more cost-effective than a full commercial auto policy.
• Keep a clean claims history. Avoiding claims through proper training and safety procedures can lower your risk profile and lead to reduced premiums over time.
• Invest in workplace safety. Implementing safety protocols and training for employees helps reduce the chances of injury claims and can lower workers’ compensation costs.
• Raise your deductible. Opting for a higher deductible can lower your monthly premium, but be sure your business can absorb the extra out-of-pocket cost in case of a claim.
• Review your coverage annually. Adjust your policies as your business evolves to avoid paying for coverage you no longer need.
• Compare quotes from multiple insurers. Rates vary widely, so shopping through Insuranceopedia can help you find the best deal for your current needs.

Taking a strategic approach to your insurance planning can make a real difference in your bottom line. With a little research and regular review, you can stay protected and cost-efficient at the same time.

Following these steps helps ensure you’re properly insured and set up to handle risks confidently and professionally.