About General Liability Insurance
All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).
Some of the risks CGL insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A BODY WAXING BUSINESS
Example 1: A customer fails to inform your business that he is allergic to a particular brand of body wax that you commonly use. He suffers a severe reaction to your wax and requires prompt medical attention and an ambulance. If found liable, your business would likely be covered by general liability insurance, including court-ordered damage payments or any settlements reached.
Example 2: A customer dozes off during his session and wakes up to find that he has been treated according to a different customer’s scheduled appointment. He has rashes on his body where certain oils were applied. He claims that his health is a crucial element of his professional life and files a lawsuit to cover a period of time that he cannot work. If liable for the error, your company would probably be covered by general liability insurance for resulting damage estimates or a settlement.
Example 3: A customer is accidentally sealed in a tanning bed due to a broken mechanism. When she is finally released, her skin looks red and she is visibly shaken. She says she is traumatized and in great pain. If found liable for this incident, your business would probably be covered by general liability insurance for any damages owed or settlements reached.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
COST OF GENERAL LIABILITY INSURANCE
The average body waxing business in America spends between $350-$750 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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OTHER TYPES OF COVERAGE BODY WAXING BUSINESSES NEED
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all body waxing businesses should obtain:
Professional Liability Insurance
Body-waxing businesses perform delicate services that are profoundly impactful to their clientele’s physical comfort. For that reason, this is one business that absolutely needs professional liability insurance. If a customer doesn’t like the way their procedure turned out or feels that they have been significantly wronged by your methodology, they may opt to sue. Rather than pay huge amounts in damages, a smart body waxing business will be insured for professional liability and deflect most of the financial damages incurred by lawsuits of this nature.
Commercial Property Insurance
On location at its storefronts, a body waxing business will maintain and utilize cosmetic equipment, supplies, machinery, and even inventory. One of the most serious hits a business can take is to lose massive amounts of money in unexpected disasters like a fire or violent weather. If your business is impacted by such a loss, you’ll be looking at not only the loss of your material assets but the cost of reacquisition. Commercial property insurance provides coverage for commercial inventory/equipment as well as damage to owned real estate.
TYPES OF COVERAGE SOME BODY WAXING BUSINESSES MAY NEED
In addition to the policies outlined above, there are a few other types of coverage your body waxing business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Workers' Compensation Insurance
While a body waxing business could function with you as its exclusive owner and worker extraordinaire, you have a lot to gain by bringing employees on board to expand the business and increase revenue. That being said, part-time and full-time employees legally require you to carry workers’ compensation insurance. Through this policy, employees will be covered for injuries sustained on the job. They will also be provided disability and death benefits, improving the financial security of not only your workers but of their families as well.
Product Liability Insurance
Many body waxing businesses also sell products. In an industry like health and cosmetics, your business is probably better off with something to protect it from lawsuits that arise through product use. For instance, if a customer sustains an injury or other medical damages due to a product you sold, you could be held liable for the cost of medical treatments. Don’t be caught off guard by a surprising misuse of your merchandise—product liability insurance is drafted for exactly this reason.
ADDITIONAL STEPS TO PROTECT YOUR BUSINESS
Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.
With this in mind, here are three things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
- Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
FREQUENTLY ASKED QUESTIONS
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.