If you intend to open a tanning salon business, it is important to note that you will be required to buy insurance policies for the business. This is because you cannot legally operate a business without buying insurance in the United States.
Aside from the fact that the law requires that you buy basic insurance policy covers for your tanning salon business, insurance policies are designed to protect you, your staff, customers, and business from claims that may result from your business operation.
If you own a tanning salon business, you will be exposed to incidents such as bodily injury, property damage, medical payments, legal defense and judgment, and personal and advertising injury. In this article, we are going to look at the type of insurance policy cover that a tanning salon business may need and also their cost.
Tanning Salon Business Insurance Cover and Their Cost
Table of Content
- General Liability Insurance: $500 – $1,200 per year
- Workers Compensation Insurance: $936 per employee per year
- Medical Payments Insurance: $456 for an individual and $1,152 for a family per month
- Physical Damage Insurance: $1,771 per year for full coverage
- Commercial Umbrella Insurance: $40 per month
- Know Your Risks
- Go for Value but Never Underinsure
- Get an Agent Who Knows the Industry
- Add All Necessary Information on the Application
General Liability Insurance: $500 – $1,200 per year
General liability insurance is required by law in most states for all businesses. This insurance protects the business from suffering financial loss when a staff member causes an accident. Also, note that this insurance helps to pay for injuries and damages to other people when your employee is at fault for an accident that happens in your tanning salon. This business coverage comes in two specific aspects: bodily injury and property damage.
Bodily Injury: note that when there is an accident in your tanning salon, the bodily injury portion of your liability insurance caters to the cost of medical care for the victims involved. This coverage pays the medical bills and other expenses.
The insurance will also cover the cost of emergency and ongoing medical care, and expenses incurred for rehabilitation, physical therapy, and recuperation. It goes further to cater to the victims of pain and suffering, and if applicable it pays for lost wages due to time off work. When accidents cause fatalities, this coverage also pays for the victim’s funeral expenses.
Property Damage: If your organization is at fault for an accident, the property damages portion of your liability insurance will cater to the cost of repairs that the other person suffered.
Cost of General Liability Insurance: On average, tanning salons in the United States spend between $500 – $1,200 per year for $1 million in general liability coverage. Please note that several factors will determine the price of your policy and some of them are;
- Your Location
- Your Deductible
- The Number of Your Employees
- Your per-occurrence limit
- General aggregate limit
Workers Compensation Insurance: $936 per employee per year
Even though general liability insurance protects your business from accidents, it usually doesn’t cover damages that you can avoid. It simply means that a lot of workplace injuries are not covered. In a worst-case scenario, an employee could litigate for the injuries they incurred in the workplace, and that is where workers’ compensation insurance is the most useful.
Note that if an employee ends up with medical expenses from the workplace accident, workers’ compensation insurance can pay them for the time they were out of work, as well as their medical costs. In return, the employee forgoes the right to sue the employer.
Have in mind that this is a mutually beneficial solution, and it is usually the easiest and quickest one as well. Without workers comp in place, you might end up with a month-long legal battle that will drain the wallets of both business and defendant.
Cost of Workers Compensation Insurance: Nationwide, the average cost of workers’ compensation insurance is $936 per employee, per year, or $78 per month.
Medical Payments Insurance: $456 for an individual and $1,152 for a family per month
It is important to note that this insurance protects all your staff members and clients who are in the salon at the time of the accident. If anyone is injured, irrespective of who is at fault for the accident, medical payments coverage will cater for the associated medical bills. It is advisable that you speak with a licensed insurance agent to determine if it is a viable option for your tanning salon business insurance needs.
Cost of Medical Payments Insurance: The average national cost for health insurance is $456 for an individual and $1,152 for a family per month. However, costs vary among the wide selection of health plans.
Physical Damage Insurance: $1,771 per year for full coverage
This is the insurance coverage that protects your utility tanning equipment directly. If your tanning equipment is damaged or destroyed due to unexpected events and perils, this coverage will ultimately cater to the repairs and replacement of your tanning equipment. This is quite crucial for tanning equipment that is not fully paid for, and those that are leased, because it provides the highest level of loss protection your company can get.
Comprehensive Physical Damage: This damage protects your tanning equipment against a wide variety of potential day-to-day risks. It also protects you against theft of your tanning equipment; break-in, vandalism, damages caused by natural events such as a hail storm, and more. This damage protection covers most damages that are not caused by overturning or by collision.
Specified Peril (CAC): This specified peril insurance provides you with protection against only those events and risks that are specifically listed on your tanning equipment insurance policy. It is also known as CAC, which is short for Fire and Theft with Combined Additional Coverage.
Cost of Physical Damage Insurance: In the U.S. most businesses pay an average of $1,771 per year for full coverage utility truck insurance, or about $148 per month, according to Bankrate’s 2022 analysis.
Commercial Umbrella Insurance: $40 per month
Commercial umbrella insurance provides an extra layer of liability protection by covering costs that go beyond your other liability coverage limits. In other words, commercial umbrella insurance complements your other liability coverages by taking over when your other liability coverage limits have been reached.
Although commercial umbrella insurance is not mandatory for a tanning salon business it will not be out of place if you purchase commercial umbrella insurance for your tanning salon business. If you own several utility tanning equipment, then you should make sure you buy commercial umbrella insurance.
Cost of Commercial Umbrella Insurance: Commercial umbrella insurance costs about $40 per month for each $1 million of additional coverage. Your level of risk and how much coverage you buy determine the cost of this policy.
Please note that many small businesses (17%) pay less than $500 per year for umbrella insurance and 36% pay between $500 and $1,000 per year.
How to Get the Best Insurance Policies for a Tanning Salon Business
Know Your Risks
Have it in mind that your tanning salon business always needs liability coverage for the harm you cause others. However, only getting this third-party coverage means damage to your business or injuries to you and your customers are not included, so you may want to add coverage for your first-party risks. A good insurance agent can help identify your greatest risk exposures.
Go for Value but Never Underinsure
You don’t want to be underinsured, but you also want to avoid buying unnecessary coverage. If a basic insurance policy is not enough to cover your risks, don’t hesitate to add endorsements or look for broader coverage. As long as you can afford it, the highest amount of insurance coverage available is the best option when dealing with sensitive businesses.
Get an Agent Who Knows the Industry
Agreeably, General liability insurance is not industry-specific, but tanning salon business owners still need to consider their industry and sector when shopping for coverage. An agent who has experience in the family recreation and fun business can anticipate your risks and their impacts. That way, they can help you buy the right coverage with the appropriate limits for your particular exposure.
Add All Necessary Information on the Application
Remember that the information provided on your insurance application tells your agent, broker, or underwriter how to best cover your specific risks, so you want to be as accurate and honest as possible. It does not only help protect your business, but it may also prevent you from being denied coverage if you file a claim.