What risks are generally excluded from salon insurance policies?
What Risks Are Generally Excluded From Salon Insurance Policies?
When running a salon in California, insurance is one of the smartest investments you can make. From general liability insurance to a Business Owner’s Policy (BOP), coverage helps protect against accidents, property damage, employee injuries, and even lawsuits.
But here’s an important truth: no insurance policy covers everything. Knowing what’s excluded from a typical salon policy will help you avoid surprises when filing a claim—and help you decide whether you need additional endorsements or separate policies.
Common Exclusions in Salon Insurance
🔹 Intentional Acts or Fraud
Insurance only covers accidental losses.
Example: If you or an employee intentionally cause damage or commit fraud, the claim will be denied.
🔹 Wear and Tear / Poor Maintenance
Normal deterioration or neglect isn’t covered.
Example: Old salon chairs breaking down due to age.
Tip: Preventive maintenance is your responsibility as the owner.
🔹 Professional Mistakes (Unless You Add Coverage)
General liability won’t cover errors in professional services.
Example: A chemical burn during hair coloring.
Solution: Add professional liability (errors & omissions) coverage.
🔹 Certain Cosmetic or Health Claims
Some policies exclude claims tied to dissatisfaction with results.
Example: A client claims their haircut didn’t turn out as expected.
Solution: Professional liability may extend to these risks.
🔹 Flood & Earthquake Damage
Standard property coverage excludes natural disasters.
Example: Flooding after heavy California rains or damage from earthquakes.
Solution: Buy separate flood or earthquake insurance.
🔹 Employee-Related Lawsuits
Discrimination, wrongful termination, or harassment claims aren’t covered under general liability.
Solution: Add employment practices liability insurance (EPLI) for protection.
🔹 Cyber Attacks (Unless Covered by an Endorsement)
Standard policies don’t cover data breaches or online booking hacks.
Example: A hacker steals client credit card info.
Solution: Consider cyber liability insurance.
🔹 Criminal Acts & Theft by Employees
While insurance may cover theft by outsiders, employee dishonesty is usually excluded.
Solution: Add employee dishonesty coverage or a crime policy.
🔹 Business Decisions & Contract Disputes
Financial losses caused by business risks aren’t insurable.
Example: Breaking a lease or losing a vendor contract.
🔹 Pandemic or Virus-Related Losses
After COVID-19, many insurers specifically exclude coverage for communicable diseases.
Example: Revenue lost due to mandatory salon closures.
Why Exclusions Matter
Understanding exclusions helps you:
Avoid filing claims that will be denied.
Add the right endorsements to fill gaps.
Budget for risks that can’t be insured.
How to Fill the Gaps
A strong salon insurance plan in California usually combines:
General Liability Insurance – covers client accidents and property damage.
Workers’ Compensation Insurance – required if you have employees.
BOP coverage – property + liability + business interruption.
Add-ons like cyber liability, professional liability, or EPLI for complete protection.
FAQs
1. If insurance doesn’t cover floods, how do I protect my salon?
You’ll need a separate flood insurance policy.
2. Are allergic reactions excluded from salon insurance?
Not always—if you have professional liability, chemical burns and allergic reactions may be covered.
3. Can I get coverage for employee theft?
Yes, but you’ll need to add crime or employee dishonesty insurance.
4. Why does insurance exclude pandemics?
Because they create widespread losses that insurers can’t financially absorb under standard policies.
Final Thoughts
While salon insurance covers many risks, exclusions are just as important to understand. Common gaps include floods, earthquakes, pandemics, and intentional acts. By reviewing your policy carefully and adding endorsements like professional liability, cyber coverage, or EPLI, you can build a stronger safety net for your California salon.
Protecting your business isn’t just about what’s covered—it’s also about knowing what’s not covered and planning ahead.