- Workers' compensation insurance
Workers’ compensation insurance covers medical costs and lost wages for work-related injuries and illnesses. This policy is required in almost every state for businesses that have employees.
Workers’ comp protects employees at your personal care business
Whether you’re a barber, an esthetician, or the owner of a nail salon, it’s always possible for an employee to become injured at work. Wet floors, tangled cables, and uneven flooring can all lead to major injuries, medical bills, and downtime.
Workers’ compensation can pay for an injured worker’s medical expenses and part of the wages lost while the employee recovers.
Workers’ compensation can help pay for an injured employee’s:
- Immediate medical costs, including emergency room expenses
- Ongoing medical costs, such as physical rehabilitation
- Partial lost wages while an employee is unable to work
Workers’ comp protects personal care business owners
Typically included in a workers’ comp policy, employer’s liability insurance provides protection when an employee decides to sue a business owner over an injury.
Employer’s liability insurance can help cover:
- Attorney’s fees
- Court costs
Without insurance, you could find yourself paying for a costly legal defense, even if you’re not found liable.
How much does workers' comp cost for personal care businesses?
The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).
The formula is:
Classification rate x Experience modification rate x (Payroll / 100) = Premium
State laws set workers’ comp requirements for personal care businesses
Each state has its own laws for workers’ compensation requirements. For example, every personal care business in Massachusetts is required to carry workers’ comp insurance for its employees, including part-time workers. However, Alabama businesses only need to carry this policy when they have five or more employees.
While self-employed or independent contractors, sole proprietors, and partners don’t have to carry workers’ compensation insurance, you can purchase a policy to protect yourself, too.
To learn more, check out your state requirements.
Monopolistic state funds
In certain states, personal care companies must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:
If you purchase workers’ comp through a monopolistic state fund, it may not include employer’s liability insurance. However, you can purchase it from a private insurer to fill this gap in coverage.
Lower workers’ comp costs with risk management
If a hairstylist slips on the wet floor at a shampoo station and suffers an injury, it could lead to an insurance claim. Whether you’re the owner of a day spa or a hair salon, you can create a safer work environment with:
- Employee safety training
- Prompt cleanup of spills
- Proper equipment, such as gloves
By managing your risks, you can decrease workplace injuries. That means fewer claims – and potentially a lower insurance premium.
Important policies for personal care businesses
Workers’ compensation insurance offers protection for your employees and to some extent your business, but it doesn’t provide coverage for all risks. Owners of personal care businesses should also consider:
General liability insurance: This policy can cover expenses related to third-party bodily injury, property damage, and advertising injury.
Business owner’s policy: This policy combines general liability insurance with commercial property insurance, usually at a lower rate than if the policies were purchased separately.
Professional liability insurance: Also known as errors and omissions insurance, this policy can cover legal costs related to professional mistakes, such as an unsatisfactory haircut.
Get free quotes and compare policies with Insureon
Are you ready to protect your personal care company with workers’ compensation insurance? Complete Insureon’s easy online application today to compare quotes from top U.S. carriers. Once you find the right policy, you can begin coverage in less than 24 hours.