Makeup Business Insurance
Getting insurance for your makeup business is essential.
Insurance can provide protection against numerous perils, such as financial losses, property damage, and bodily injuries sustained by customers, employees, and members of the public.
For example, a customer may claim she suffered bodily injury from products you used, and sue. Thankfully, there is insurance that offers protection from the unfortunate effects of that situation.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Makeup Business
General liability insurance is — generally speaking — one of the most important insurance policies for makeup businesses.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While general liability insurance provides coverage for a variety of risks, it may not be sufficient to cover all the risks that your business may face. For instance, some risks may require coverage from specialized policies, such as those that offer:
- Commercial property coverage: This type of insurance protects the makeup business's property, such as equipment, tools, supplies, and inventory, against damage or loss due to theft, fire, vandalism, or other covered perils. Depending on the policy, property insurance may also cover business interruption losses that result from property damage or loss.
- Professional liability insurance: This type of insurance covers claims made by clients alleging that your makeup services caused them harm, injury or financial loss. For example, if a client suffered an allergic reaction to the makeup products you used, professional liability insurance would help cover the legal costs of defending against the claim or settling the lawsuit.
- Workers' compensation insurance: If your makeup business employs staff, workers' compensation insurance is usually required by law. This type of insurance provides benefits to employees who are injured or become ill while on the job, such as medical expenses, lost wages, and rehabilitation costs.
When it’s time to purchase insurance for your business, you will generally be able to choose between the following two types of insurers:
- Traditional brick and mortar insurers: Traditional insurers, like Progressive and Allstate, rely on different levels of intermediaries to distribute their products and process claims. It’s difficult for customers to know how their products are priced. Because of increased overhead, traditional insurers often charge higher policy premiums.
- Online insurers: Insurtechs, like Clearcover and Next, use technology to provide customers with more transparency about the cost and coverage of their policies, as well as the claims process. Reduced overhead leads to lower premiums with online insurers.
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Cost of General Liability Insurance
The average makeup business in America spends between $350-$750 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a makeup business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- 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.
Find the Best Rate
Discover the best coverage at the lowest rate in our affordable business insurance review.
Common Situations That General Liability Insurance May Cover for a Makeup Business
Example 1: A customer visiting your place of business slips on a wet floor and falls, breaking her wrist. She decides to take legal action against your business, claiming that you did not warn her of the danger posed by the wet floor. With a general liability insurance policy, you can expect your legal defense to be paid for by your insurer.
Example 2: One of your employees is hauling a hand cart stacked high with boxes of your products through your parking lot. He loses control of the hand cart, and runs into the luxury automobile of one of your top clients, scratching the paint and causing a small dent. Your general liability insurance policy would likely cover the costs of repairing the automobile.
Example 3: After a meeting with potential clients, one of the visitors to your business takes a wrong turn from the office and enters the manufacturing area. He trips over a pallet and falls, sustaining a concussion and a broken arm. He sues your business in an attempt to hold you responsible for his injuries. The general liability insurance you carry will pay for your legal costs, including any payout or settlement.
Other Types of Coverage Makeup 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 of the most common types of coverage:
Workers’ Compensation Insurance
All businesses with employees need workers’ compensation insurance to protect both the business and the employees. A workers’ compensation policy is required by law in most states for companies with employees. With a workers’ comp policy, your employees will have their medical bills paid for when treating work-related injuries. It will also pay for missed wages due to work-related injuries.
Product Liability Insurance
If a customer decides that one of your products caused an injury or allergic reaction, she may decide to take legal action and demand compensation. In the event that you are facing such a lawsuit, your product liability insurance will provide financial backup—paying for your legal defense and for any payouts or settlements related to the lawsuit.
Commercial Umbrella Insurance
Every general liability insurance policy has limits. Once those limits are reached, you are left to pick up the tab to cover any additional expenses. With a commercial umbrella policy, you have extra protection beyond your general liability insurance limits. Once the limits of your general liability policy are met—like in the event of losing a costly lawsuit—then your umbrella policy will begin to pay until its limits are reached.
Business Interruption Insurance
Sometimes disaster can strike and leave you unable to keep your business operating—but usually, the expenses don’t stop. A business interruption insurance policy is designed to help cover lost profits if your business has to shut down due to a covered event. A business interruption insurance policy is often offered with a comprehensive business owner’s policy.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your makeup business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Makeup Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial 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.
"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.
In general, yes; a makeup business is susceptible to various risks during its daily operations, some of which may manifest even before the business commences. There is a constant presence of risks related to property damage, bodily injury, and financial loss. Thus, business insurance is essential. Additionally, certain types of insurance are mandated by state laws.
Not necessarily. Certain exceptions may be written directly into your makeup business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.