Tattoo Parlors Insurance – Cost and Policies
Like any business that’s involved in physical contact with its customers, you should be paying attention to your priority needs for Tattoo Parlors Insurance.
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There are many special risks that a parlor faces that come from the “hand-on” nature of the business, dealing with human skin as a living organ.
Whether you own a tattoo parlor or are a freelancing tattoo artist, you should cover your business liability against the possibility of claims of wrongful actions or accidents. On top of that, there are the everyday risks that all businesses face.
On the positive aspect of how the business is changing, the level of demand for tattooing and body piercing services is moving upscale, with the growth of customizable art designs changing the profile of typical customers.
On the downside of this, the customers are coming into the parlor with higher expectations and the possibility of dissatisfaction leading to disputes or even court cases is a significant factor that you need to face before it happens.
The range of insurance covers that are particularly important for tattoo businesses are related to the liabilities that come with dealing with the bodies of customers, with the highly specialized products and tools that you are using to create your artistics body-art designs, and the level of access that your parlor has to general traffic.
These three relate to the following areas of liability insurance:
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- Professional liability
- General liability
- Product liability
On top of these, like all businesses that have assets, you should be protecting your investment and commitments in their value with common insurance covers, like:
- Commercial property
- Business interruption
- Data security
Finally, if your business employs more than the number of workers stipulated in your particular state, you must have Workers Compensation insurance.
What can you expect to pay for Tattoo Parlor insurance?
The following estimates are based primarily on our knowledge of the insurance needs of other businesses involved in the hands-on treatment of customers, for example, Teeth Whitening, Health Coaches, Dance Instructors, Aestheticians, Permanent Makeup and Body Sugaring.
|Basic level of cover||Expected range of annual premium|
|Professional Liability (Errors & Omissions)||$250,000 full year
$50,000 single claim with $1000 deductible
|$800 – $1100|
|General Liability||$2 million full year
$1 million for a single claim
|$400 – $700|
|Product liability insurance||$20,00 for the full year
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$5,000 single claim
|$120 – $200|
|Commercial auto insurance||Based on replacement cost||$1500 – $2000|
|Commercial property insurance||Calculated on insurable value (IV)||$0.35 – $0.50 per $100 IV|
|Business interruption||$10,000 with $500 deductible||$200 – $350|
|Data security||$25,000 per year, $5,000 single claim||$120 – $220|
|BOP insurance*||$2 million liability + calculated commercial property cover||$350 – $500 & $0.30 – $0.45 per $100 IV|
What are the specific liability covers that should be included in tattoo parlor insurance?
Professional liability insurance
Professional liability insurance (also known as malpractice insurance, errors and omissions insurance or E&O insurance) protects your business against claims of negligence, professional mistakes in the conduct of your work, or failing to deliver a service you promised.
The greatest benefit of liability insurance is that the insurance company (the policyholder) has to take over the whole process of defending any claim.
Liability insurers have the duty to defend you against any claim, regardless of the merits, and must settle any judgment or fair negotiated settlement of the claim.
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This relieves you of the need to mount the defense yourself, to find the lawyers that will represent you with expert opinions.
All of this can be very time-consuming and expensive, and you can never be entirely sure that a judgment will go the way you expect.
Having all of this burden and uncertainty lifted off your shoulders is worth many times the relatively low cost of professional liability insurance.
General liability insurance
General liability insurance coverage protects your business against any claims by a third party of bodily injury or property damage.
The most usual kind of claim is called a “slip and fall”, where you are being held liable because it happened inside your parlor.
Should a customer trip over a loose step on the way into your parlor, and break his wrist you could be sued for their bills, legal costs and many other consequences.
General insurance acts the same way as professional liability insurance, removing the responsibility for defense over onto the insurance company and giving you peace of mind.
Product liability insurance
Product liability insurance gives you cover if one of the products you sell to customers fails to perform properly and causes some damage either to the user’s health, or damages clothing, furniture, or something else it comes into contact with.
In many states, product liability belongs both to the manufacturer and all businesses involved in the supply chain, so just by selling the product, you could end up being the easiest one to be sued.
Some pre-packed products come with warnings and instructions that can protect you, but if you buy in bulk and repackage, or manufacture your own products for resale, then product liability insurance is essential.
What general business insurances should a tattoo parlor have?
Commercial property insurance
Commercial property insurance will protect your owned or rented parlor premises against physical risks like fire, theft, damage or vandalism.
The main basis of calculation of the total premium will rely on the value of the properties being insured, so that you will receive the proper payout in the event of a claim and also cover any mortgage debts or loans that are secured by the property.
The best way is to get appraisals from qualified brokers, professional real estate agents or business consultants because they know what commercial property in your location is worth.
Small businesses can bundle commercial property, general liability and equipment covers into a single policy known as a Business Owners Policy (BOP).
It can also give you business income coverage (also known as income protection), covering any loss of income due to a break in your normal flow of business operations caused by some event covered by the commercial property insurance policy, including time taken for repairs or replacement.
Equipment insurance covers the value of equipment damaged while inside the parlor, for repair or replacement of your equipment.
Since your whole operation depends on the availability of this equipment, you can’t afford to go without it, and having the right equipment insurance means you can replace it quickly knowing that you will get reimbursed by the insurer.
Cyber security insurance
You need cyber insurance because you may be keeping private details about your customers, like Social Security numbers, credit cards or banking accounts, and other highly personal information such as “before and after” photographs. All of this makes the potential risk of data security breaches high.
If you are using cars, vans or trucks in the conduct of business, including transporting yourself or workers, they have to be covered by commercial vehicle insurance.
Even if you have private insurance, your personal vehicle will not be covered if it was engaged in business activity.
In this case, the insurance company would reject any claim and you will be left holding the responsibility for any damage, injury or loss.
The same goes for vehicles owned by employees or short-term rentals (hired and non-owned vehicles).
Workers Compensation Insurance
Almost all states require this coverage but the number of workers that you employ in order to require the insurance varies.
Refer to the state regulations to see whether your workforce levels require cover.
Workers compensation insurance provides benefits if a worker (full-time, part-time or casual) suffers a work-related illness or injury.
The benefits include medical expenses, lost wages, vocational rehabilitation, and death cover.
If you fail to meet state regulations you may be liable to pay the appropriate benefits out of your own pocket and also be penalized by fines.
Employers can only get the cover from the government-run monopoly state funds in North Dakota, Ohio, Washington, West Virginia, and Wyoming.
Otherwise, you can get workers compensation insurance from an independent insurance company.
Will all insurance companies be prepared to issue a policy for tattoo parlor insurance?
Because your business operates in a specialized sector, not every company offers full cover.
For this reason, you should consult with local insurance brokers and agents.
A quick look around the internet will locate the companies that are keen to do business with you, as long as you seed your search with words relating to the kind of operation you run.
The kinds of work that insurance companies regard as tattooing include:
- Body piercing
- Cosmetic tattoos
- Henna tattoos
- Glitter tattoos
- Tattoo removal
When it’s time to get an offer of cover, you will find that the insurance companies are most interested in finding out some basic information about you, such as:
- The types of services you offer
- Your levels of training and education
- How many years of experience you and any of your active staff have (most companies are looking for a minimum of three years of experience or apprenticeship)
- Your safety and sterilization standards (stipulating use of disposable needles)
- Your claims history
- The annual levels of revenue
Any self-employed or independent artists who contract work for you are not covered by your policies and must be self-insured to protect you.
Generally, extreme body modification is excluded from cover.
Examples of some claims that have been settled for tattoo parlors.
In one example of a professional liability case, a customer requested to be injected only with a specific coloured fill at the beginning of the procedure.
The customer said he wanted a “royal” look. Based on that, the artists gave her a lovely rich purple fill, because in most Western and Asian cultures, purple represents royalty and wealth or fame.
But it’s a color representing mourning in Thailand. The Thai customer sued because the tattooist had made an unreasonable assumption and had not bothered to ask. Whatever the outcome of such a dispute, a proper professional liability insurance would settle legal fees and any award.
Another type of claim is for negligence in maintaining a safe environment.
A customer was undergoing her treatment, and her children were coming up to the chair to have a look.
Some water leaked onto the floor from a nearby sink, and the child slipped and fell, breaking her arm and ruining her expensive dress.
The customer sued for medical expenses, pain and suffering, lost earnings while she had to look after the injured child, and the costs of the clothing. In the end, the general liability insurer had to pay out nearly $25,000 to the claimant and cover its own legal costs.
A customer undergoing a body piercing was exceptionally sensitive to pain, and as soon as the needles touched his skin, his leg jerked, kicking the device away, smashing through the parlor mirrors. The cost of replacing the shop fittings and the ruined device were covered by the tattoo parlor commercial property and equipment policies.