Cosmetics Sales Insurance
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Get Cosmetics Sales Insurance

Home-based cosmetic sales consultants have a reputation for being entrepreneurs with plenty of savvy, good connections, and a serious work ethic. And your job comes with sweet rewards. You're your own boss, you get to host parties in people's homes, and you earn perks from your wholesaler company (whether it's Avon, Mary Kay, Arbonne, or something else). In other words, you have plenty of incentive to protect the beauty business you've built.

If there's one thing every cosmetic sales professional should know, it's that working from home doesn't insulate your business from liability. Homeowner's insurance won't cover your merchandise, your beauty supplies, or other items you use to run your business. But cosmetics sales insurance can. Let's take a look at some common policies for home-based cosmetics sales professionals.

General Liability Insurance

If you, for example, sell Mary Kay products and need insurance, General Liability Insurance will often be your first purchase, especially if your business follows the home-party sales model. When you invite others into your home for business, you risk the chance of someone getting hurt on your property. If that happens, they can sue your business for damages. Even if you host makeover parties at a venue outside your home, the financial responsibility for an injury sustained at the event may still fall on your business.

General Liability can help address these risks. For example, it can cover allegations that your business…

  • Damaged a customer's property.
  • Is responsible for a customer's bodily injuries or illnesses.
  • Infringed on a copyright or brand entity.
  • Damaged someone's reputation through libel or slander.

If you're sued over these incidents, General Liability may pay for your attorney fees, settlements, or judgments.

If you travel to host sales parties and conduct makeover appointments, you can rest easy knowing that your General Liability coverage can travel with you. For example, if you break something at a client's home, your General Liability may help pay to repair or replace their property.

Business Owner's Policy

Many of our customers who want Avon insurance, or insurance for whichever cosmetics line they represent, purchase a Business Owner's Policy. This bundles General Liability Insurance with Commercial Property Insurance.

Being the owner of a home-based cosmetics sales business means your inventory is your livelihood. If a fire strikes your house, your wholesaler probably won't reimburse you for the damaged inventory. But your Commercial Property Insurance policy can insure your inventory, beauty supplies, tools, and other business equipment against loss or damage.

Most homeowner's insurance policies don't cover business property without the appropriate add-on, so a BOP's protection is essential. In addition to covering fire damage, it can reimburse your business for property lost or damaged by:

  • Theft.
  • Vandalism.
  • Tornadoes.
  • Hail.

Another nice thing about a BOP? It typically costs less than purchasing General Liability and Property Insurance separately.

Professional Liability Insurance

Professional Liability Insurance (also known as Errors & Omissions Insurance or E&O Insurance) helps protect any business that offers advice, services, or guidance. If a dissatisfied client sues your business because they're unhappy with your professional services, your E&O policy can cover the lawsuit costs.

This insurance kicks in when a customer sues your business over:

  • Professional negligence.
  • Selling a faulty product or service.
  • Not delivering products or services as promised.
  • Providing shoddy service.

For example, let's say you sold several products to a client who is planning to use them on her wedding day. However, your inventory doesn't arrive in time. She may decide to pursue the issue in court, claiming you didn't hold up your end of the bargain. If that happens, your Professional Liability Insurance may pay for your attorney fees, settlements, and other legal expenses.

Commercial Auto Insurance

As a cosmetics salesperson, you spend a lot of time in your car driving to:

  • Host parties.
  • Consult with clients.
  • Drop off deliveries.

Because you drive so frequently for work, you may want to purchase Commercial Auto Insurance. It can cover accidents that happen while you drive either a company vehicle or your personal vehicle for work purposes.

Some cosmetics sales consultants think their personal auto insurance can cover accidents that happen while making deliveries, but that's usually not the case. Most personal policies explicitly exclude coverage for damages you cause to other drivers while driving for work. Check with your insurance agent to see whether Commercial Auto Insurance is a good solution for this coverage gap.

Further Reading for Cosmetics Sales Reps