No one ever plans on something going wrong, but the unfortunate reality is that accidents happen sometimes. That’s why it’s crucial to have business insurance for your skincare business. Here are some tips for new business owners on choosing the right policy.
Skincare Business Insurance Policy Options & Cost
The four most common types of insurance for skincare businesses are as follows:
- General liability insurance protects you from lawsuits arising from injuries or property damage that occurs as a result of your business activities. General liability insurance can also help protect your skincare business’ assets in the event of a lawsuit. Typical costs are $500-$3,000 per year.
- Commercial property insurance can help reimburse you for lost or damaged property caused by fire, theft, or other covered events. Average costs are $500-$2,500 per year.
- Workers’ compensation insurance helps skin care businesses cover the costs of employee injuries or illnesses. This type of insurance can help businesses pay for medical expenses, rehabilitation costs, and other related expenses. Workers’ compensation insurance is required in all states except Texas. Workers’ compensation insurance typically costs between 1% to 1.5% of your total payroll costs.
- Business income insurance is sometimes called business interruption insurance or business continuity insurance. This insurance helps businesses recover from certain losses caused by events such as property damage, theft, or business interruption. This type of insurance can help businesses cover the costs of not being able to operate for some time. It can also help businesses pay for expenses such as employee salaries, rent, and other ongoing costs.
Business interruption insurance is typically $250-$2,500 per year.
Other types of business insurance to consider based on the specifics of your skincare business include:
- Product liability insurance is a type of insurance that helps businesses protect themselves from lawsuits that may arise due to products that they sell. Product liability insurance is typically $1,000-$5,000 per year.
- Professional liability insurance, also known as Errors and Omissions (E&O) insurance, helps professionals protect themselves from lawsuits. Professional liability insurance is typically $500-$2,500 per year.
- Employment practices liability insurance, also known as EPLI, helps skin care businesses protect themselves from lawsuits that may arise from the way they employ their staff.
- Cyber liability insurance protects you from lawsuits that may arise from a data breach or other cyber incident.
- Business identity insurance protects your business from theft or misuse of your company name or logo.
- Commercial auto insurance and commercial fleet insurance protect you from lawsuits that may arise from accidents involving employees while driving for work.
- Key person insurance or key man insurance protects your skin care business from losses that may arise from the death or illness of a key employee,
- Equipment breakdown insurance, which can help pay for the cost of repairing or replacing damaged equipment,
While this list of insurance options covers most skincare businesses, you may be required to purchase additional coverage depending on the specific nature of your skincare business. Speaking with an insurance company is important to determine which policies are right for your business.
The cost of business insurance will vary depending on the type and amount of coverage you purchase. However, business owners can expect to pay a few hundred dollars per year for general liability insurance.
It is essential to talk to your insurance company to ensure you have the right coverage in place for your skincare company.
How Much Insurance Should a Skincare Business Have?
This is a difficult question to answer, as the amount of insurance you need will vary depending on the type of products or services you offer and the size of your company. That being said, most insurance experts recommend that business owners purchase enough coverage to protect their assets in the event of a lawsuit.
When shopping for liability insurance, ask your insurance company about the coverage limits and available supplemental coverage options.
In summary, all skincare businesses should carry some form of general liability insurance. The amount of coverage you need will vary depending on the size and scope of your business. Be sure to speak with an insurance company to determine which policies are suitable for your skincare business.