Salon Insurance Guide, 8 policies, premium ranges, COC checklist

Covers third-party injury or property damage caused by your business, a client slipping on a wet salon floor, a colour spill staining a customer's designer coat, an injury from a chair collapse.

Suggested limit

$10m for residential / suburban salons. $20m for shopping-centre or large complex tenancies.

Public liability is the foundational policy and is mandatory in virtually every commercial lease. The limit dictates the maximum the insurer will pay per claim, $10m is the practical minimum because medical and rehabilitation costs in a serious slip-and-fall easily reach 7 figures. Landlords for major shopping centres routinely require $20m before they'll execute a lease.

Common exclusions

Treatment-related allergic reactions, professional advice gone wrong, employee injuries, each needs a separate policy.

Mandatory state-based scheme covering injury or illness sustained by your employees (including casual staff) while at work or commuting.

Suggested limit

2% to 4% of payroll typical for personal services (varies by state and claims history).

Workers compensation is not optional. The moment you hire your first employee, including a junior salon assistant on casual hours, you're legally required to take out workers comp through your state's scheme (icare in NSW, WorkSafe Victoria, WorkCover Queensland, ReturnToWorkSA, WorkCover WA, WorkSafe Tasmania, etc.). Premium is calculated as a percentage of total wages paid, with the rate set by your industry classification and your claims history.

Common exclusions

Sole traders generally cannot take workers comp on themselves (use Income Protection instead). Contractors are usually outside scope but be cautious, see notes on misclassification.

Covers claims arising from the treatment itself, allergic reactions to lash glue, chemical burns from peels, dermal complications, hair-colour reactions, laser burns. Public liability explicitly excludes these.

Suggested limit

$2m to $5m for general beauty work. $5m to $10m for laser, dermal, paramedical.

Treatment liability is the policy most often missing in early-stage salons. Operators assume their public liability covers an allergic reaction to a chemical peel, it doesn't. PL covers premises-related injury; treatment liability covers the consequences of the treatment as performed. If you do facials, peels, lashes, lasers, dermal needling, microblading, or anything that affects the skin, this policy is non-negotiable.

Common exclusions

Procedures performed without appropriate qualifications, or outside the scope of your training, are typically excluded. Document your qualifications and renew CPD.

Covers your physical equipment, clippers, scissors, laser, autoclave, IPL, retail stock, against theft, fire, accidental damage, and (sometimes) breakdown.

Suggested limit

Schedule the actual replacement cost of your kit. Typical solo operator: $5k to $15k. Day spa: $80k+.

Tools-of-trade cover is often bundled into a small business pack but check the limit, many default policies cap at $5,000 per item, which doesn't cover a $30,000 laser or a $15,000 IPL platform. Schedule expensive items individually with the insurer. The autoclave is often missed.

Common exclusions

Gradual wear and tear, consumables, items left unattended in a vehicle (unless 'in transit' is scheduled).

Storefront glass and internal mirror/glass cover. Mandatory under most commercial retail leases.

Suggested limit

Replacement value of all glass, both shopfront and internal mirrors and shelving.

Most retail leases make glass cover the tenant's responsibility, not the landlord's. A full shopfront glass replacement is $2,000 to $10,000+. Internal salon mirrors and glass shelving can be $1,000 to $3,000 each. Glass cover is cheap (often <$200/yr) but is almost always required by the lease, if you don't have it, you're in breach.

Common exclusions

Pre-existing damage. Glass already cracked at policy inception. Document with photos on day one.

Covers your fit-out, fixtures, fittings, signage, and inventory against fire, storm, theft, malicious damage.

Suggested limit

Full replacement cost of fit-out + retail stock + signage. Indexed annually.

Salon fit-outs (basins, stations, treatment rooms, retail shelving) are expensive to replace from scratch, a $60,000 fit-out lost to a kitchen fire next door is the difference between staying in business and closing. Premises and contents cover sits underneath the lease structure; the landlord covers the building itself, you cover everything you brought in. Premium ranges $400 to $1,500/yr depending on sum insured.

Common exclusions

Damage from inadequate building maintenance (usually a landlord issue). Cash beyond a small limit (use safe cover).

Replaces lost revenue while your salon can't trade after an insured event (fire, flood, sometimes pandemic, but check exclusions).

Suggested limit

12 months of gross profit, indexed annually.

Often the most under-bought policy. If your salon burns down, you have 3 to 12 months before you can re-open, and your fixed costs (lease, loan repayments, salaries for staff you want to retain) continue. Business interruption covers those lost trading months. Most operators dramatically underestimate the indemnity period, assume at least 12 months.

Common exclusions

Most policies excluded pandemic-related interruption after 2020. Read the exclusion clauses carefully, they vary widely.

Covers data-breach response costs (forensics, customer notification, regulator engagement) and lost revenue if your booking system or POS is taken offline by ransomware.

Suggested limit

$250k to $1m for small salons. Increases with client database size.

Salons hold sensitive client data, contact details, treatment history, medical-disclosure forms, payment card data. The Privacy Act 1988 requires notification of any 'eligible data breach' once turnover hits $3m, with potential OAIC penalties for breaches handled poorly. Cyber cover is cheap relative to the cost of a real incident and increasingly standard in salon-targeted insurance packs.

Common exclusions

Pre-existing breaches. Negligent retention of credit-card data outside PCI-DSS scope. Use a tokenised payment provider.