What Insurance Do I Need for a Hair Salon in CT?

Have you wondered as a business owner, what insurance do I need for a hair salon in Connecticut? Besides a certain level of mandatory insurance coverage, you will benefit from certain other insurance types.

Small businesses like hair salons are a part of the overwhelming majority of businesses in Connecticut. The US Small Business Administration has said that as of 2018, small businesses made up 99% of total companies in Connecticut. 

Mandatory Insurance Coverage in Connecticut for Hair Salons

 

In the state of Connecticut, small businesses like hair salons need commercial vehicles and worker compensation coverage. These are two insurance protection plans that are absolutely necessary for all kinds of businesses both big and small due to the high risk of vehicle accidents and worker injuries. It should not come as a surprise then that the state of Connecticut has deemed these insurance plans to be compulsory for all small businesses that are operating in the state. 

With just worker compensation and commercial vehicle insurance, mandatory insurance for businesses in Connecticut is relatively modest. This means that there are lower barriers to commercial activities in the state, but this is the bare minimum. Most businesses will certainly need greater insurance protection to cover them against major threats. 

 

Worker Compensation Insurance for Hair Salons in Connecticut

 

Just like any other small business, a hair salon needs worker compensation insurance to cover the high risk of lawsuits and claims emanating from workplace injuries. In Connecticut, worker compensation insurance is compulsory.

You will need a worker compensation insurance plan that covers all employees in your hair salon. In Connecticut, the only kind of employee who is exempt from this requirement is a household employee working under 26 hours every week. All other employees require coverage. This includes seasonal, part-time and full-time workers.

As a business owner, you are not required to have any worker compensation insurance for yourself.

 

The Cost of Worker Compensation Insurance in Connecticut

 

For every $100 in payroll expenses, you can expect worker insurance cost of about $1.2. This is a cost-effective and economical solution to the high risk of expensive worker compensation lawsuits. This is much cheaper than having to pay hundreds of thousands of dollars by way of worker claims. 

Although this is the average value for small businesses in Connecticut, the insurance rate can vary according to the nature of your business. Factors that affect the worker compensation insurance rate for small businesses in Connecticut include the cost of doing business, cost of living, total insurance payouts per annum and risks involved in the business. Since hair salons entail low risk, worker compensation insurance rates should be relatively modest.

When you apply for worker compensation insurance, the company will closely scrutinize the level of risk that all employees are exposed to individually. The company will determine your insurance rate based on how much risk your employees are exposed to due to their job roles.

 

Penalties for Insufficient Worker Compensation Insurance in Connecticut

 

Business owners who pay less than the minimum required worker compensation insurance in Connecticut will face penalties as described in the Connecticut Worker’s Compensation Insurance Act. 

Under the Act, the State of Connecticut Worker’s Compensation Commission can stop those businesses from operating if they do not have enough worker insurance compensation. The Commission will issue an order to such businesses to cease operations. The Commission can prevent these businesses from working until they pay up all they owe under the Connecticut Worker’s Compensation Insurance Act. 

For inadequate worker insurance coverage that fails to fulfil state laws, the Commission can impose a fine of $300 per day for each worker.

Thus, small business owners, including hair salon owners may have to pay hefty penalties if they do fulfill state laws for worker compensation insurance.

 

Death Benefits from Worker Compensation Insurance in Connecticut

 

If a worker passes away due to work-related illness or injury, then the surviving dependents of the deceased worker will be entitled to death benefits. Burial expenses of the deceased worker up to $4,000 will be paid under these benefits. 

The surviving spouse will be entitled to benefits until they remarry. Under worker compensation death benefits, the surviving spouse can receive benefits that they and minor dependents are eligible for.

There will also be some benefits for surviving parents and guardians. In case there is no surviving spouse, the remaining surviving dependents can share benefits thus paid equally among themselves. In case the deceased worker has no children or spouse, then surviving family members who needed financial support from the deceased worker will be receive these benefits.

 

Settlements for Worker Compensation in Connecticut

 

A settlement for worker compensation may take place in response to work-related injury or illness. Since a settlement happens after the worker and their employer have resolved the matter, it can provide benefits to both parties involved.

Worker compensation claims can transpire owing to job-related injuries and illnesses. For instance, repetitive motion over a long period of time can lead to such injuries for which the worker will be eligible to compensation.

Under Connecticut rules, worker compensation settlements are a full and final resolution of the matter. Thus, after a settlement has been concluded, the aggrieved employee is not allowed to file any subsequent lawsuit or claim on this matter.

It is also necessary to keep the statute of limitations in mind. Workers have one year within which they may file their workplace injury related claim. If workers acquire a work-related disease, then they have 3 years within which they must file the claim once the disease manifests itself.

 

Why Do Hair Salon Owners Need Insurance?

 

First, they must comply with mandatory business insurance requirements of the state of Connecticut. Thus, hair salon owners need to apply for worker compensation insurance and commercial vehicle insurance (if they have commercial vehicles for the hair salon business).

Besides these two compulsory insurance requirements, there are other insurance plans that hair salon owners will need to contemplate. 

Your hair salon could suffer from unexpected accidents and mishaps due to which employees or customers could file claims against you. This can happen in many ways. Slipping and falling due to a wet floor is one example. In addition, hair salons have their own unique risks that could lead to lawsuits and heavy settlements.

For example, a customer can fall and suffer from a major injury after slipping over spilled liquid at the shampoo station. If you provide professional advice to your clients and they suffer losses, injuries or illnesses as a consequence, then you could get sued for huge amounts. While providing service to clients, one of your employees could end up ruining their expensive clothes or shoes belonging to the customer. Even employees run the risk of suffering injuries on your hair salon premises.

It is not hard to understand that these problems are a serious threat to your business and its operations. These mishaps can happen suddenly without warning. Just out of the blue, you may find yourself facing an ominous lawsuit. 

Even if you took due care and exercised due diligence you will still end up enduring negative consequences. Do not think that having a strong position in the case is enough. Lawsuits often entail high legal costs. You may have to pay up plenty of money to a good attorney for successful defense. 

So you should not think that implementing all possible safeguards will keep you safe. While you should certainly do your level best to ensure that all reasonable safety measures have been implemented in your salon, bear in mind that there is still the real risk of protracted lawsuits that could end up costing you a lot of money to defend. You could be sued for issues that were not your fault. In fact, now adays it seems that people will sue you for just about anything. 

By purchasing reasonable insurance coverage, you are showing care for not just yourself, but also for your employees and clients. In the case of a mishap, injured and stricken clients as well as employees may receive benefits under the plan. This is your way of showing care for your employees and clients who unfortunately suffer an accident at your hair salon. 

In fact, having proper insurance coverage is now critical for business. It manifests your due regard and care for customers. Thus, you have greater prospects of attracting customers if you have insurance. Due to the prevalence of mishaps and injuries, many customers simply say no to businesses that do not have insurance. So, small business insurance is more than just another expense. It is a critical cost of doing business. Your clients now expect you to have insurance. As a responsible business owner, you have to care for your customers and also fulfil their demands. One of these demands is comprehensive insurance to cover customers against adverse events. 

 

General Liability Insurance

 

General liability insurance is not an option for small businesses. The main reason for this is that you could be sued for just about anything nowadays. Thus, you could end up paying dearly for the smallest of mistakes. You could also end up paying heavily to legally defend yourself against issues that were not your fault. Make no doubt about it. America has one of the highest incidences of business lawsuits in the world. In fact, the US ranks at the very top of the world due to the hundreds of billions of dollars spent each year on litigations. 

The risk of litigation is very high for small businesses. Added to that, settlements can easily run into six figures. Thus, you simply cannot do without general liability insurance. 

General liability insurance protects you against the financial fallout of claims that customers and employees can file due to injuries and illnesses from your hair salon.

Thus, general liability will give you peace of mind as you will be covered against the very real risk of incurring tremendous expenses out of the blue. Remember, the US is the most litigious place in the world.

 

Business Owner Policy

 

Business owner policies are more comprehensive than general liability insurance. Since they bunder general liability insurance together with other insurance coverages, they are more economical in addition to being more comprehensive. Thus, with a business owner policy, you could get more protection for less money.

For example, your expensive equipment could suddenly break down, freezing operations requiring this equipment. Or your property may be ruined by unexpected flooding overnight due to a broken water line. Commercial properties are also exposed to fire risks from electrical short circuits for instance. Such real risks are usually covered in the business owner policy.

Under the business owner policy, not only will you be reimbursed for the cost of broken equipment, you will also be compensated for lost earnings.

The business owner policy also protects against property damage as described in the aforementioned flooding example. Thus, you may not need a separate commercial property policy with a business owner policy.

A business owner policy may be more feasible and cost effective for hair salon owners than purchasing separate general liability and commercial property damage insurance.

You may also need professional liability insurance. Your clients could suffer damages arising from your services. For example, if you apply a product that produces an allergic reaction in your client, then you could be sued. This can happen even if you took all possible precautions. 

 

Conclusion

 

You will need worker compensation and commercial vehicle insurance (if your hair salon business has a commercial vehicle) in the state of Connecticut.

Just like all other businesses, hair salons also need to cover themselves against general liability risk and commercial property damage risk. Instead of purchasing general liability insurance and commercial property insurance separately, you can save costs by buying business owner insurance since it bundles both policies into a cheaper comprehensive package.