Running a salon or spa in Texas comes with a unique insurance landscape. Unlike most states, Texas doesn't require you to carry workers' compensation insurance for your employees—but that doesn't mean you should skip it. Between client injuries, product liability, and employee protection, there's a lot to consider when protecting your beauty business. Here's what you actually need to know about insurance requirements for salons and spas in Texas.
What Texas Law Actually Requires
Here's the surprising truth: Texas doesn't require cosmetology license holders to carry liability insurance. The state also doesn't mandate workers' compensation coverage for private employers. This makes Texas one of the most flexible states when it comes to insurance requirements for salon and spa businesses.
But before you breathe a sigh of relief and skip insurance altogether, understand this: just because the state doesn't require it doesn't mean you won't need it. Your landlord, your employees, and your business bank account will thank you for having proper coverage when something goes wrong.
When You'll Actually Need Insurance
Even though Texas law is lenient, real-world business requirements are not. If you're leasing commercial space, your landlord will almost certainly require you to carry general liability insurance and name them as an additional insured on your policy. This protects them if a client slips on your wet floor and decides to sue everyone involved.
If you're bringing on employees—stylists, estheticians, massage therapists, or front desk staff—you'll want to seriously consider workers' compensation insurance. While it's optional in Texas, going without it means you lose legal immunity from employee lawsuits. If someone gets hurt on the job, they can sue you directly for medical bills, lost wages, and damages. A single lawsuit can cost tens of thousands of dollars, far more than the annual premium for workers' comp.
For stylists working as independent contractors or booth renters, many salons and spas require you to carry your own professional liability insurance before you can work on their premises. They'll want to see proof of coverage and be listed as an additional insured. This shifts the liability away from the salon owner and onto you, which protects both parties.
Understanding Workers' Compensation in Texas
Texas gives employers three options: participate in the state-regulated workers' compensation system, self-insure if you're a large company with deep pockets, or opt out entirely as a 'non-subscriber.' Most small salon and spa owners choose either to buy coverage or go without it.
If you decide not to carry workers' comp, you must file Form DWC 005 annually with the Texas Division of Workers' Compensation and post notices in English, Spanish, and any other relevant language in your workplace. These notices inform employees that they are not covered by workers' compensation and must seek other remedies if injured on the job.
The cost for salon workers' compensation is relatively affordable. Most Texas salons pay around $0.49 per $100 of payroll under classification code 9586, which covers hair salons and beauticians. For a typical salon with several employees, this works out to roughly $435 per year per employee, or about $36 per month. That's a small price to pay for the legal protection it provides.
General Liability and Professional Liability Coverage
General liability insurance is your first line of defense against common business risks. It covers third-party bodily injury, property damage, and advertising injuries. Think of it as the policy that kicks in when a client trips over a cord, spills coffee on their laptop in your waiting area, or claims your Instagram post infringed on their trademark.
For Texas salons, the average cost of general liability insurance is about $740 per year, or roughly $62 per month. This coverage is non-negotiable if you're leasing commercial space, and it's a smart investment even if you're not.
Professional liability insurance—sometimes called malpractice insurance or errors and omissions coverage—protects you from claims related to the services you provide. If a client has an allergic reaction to a hair dye, suffers a chemical burn from a peel, or is unhappy with a botched haircut and sues for damages, professional liability steps in. The average cost is about $920 per year, or $77 per month, and it's worth every penny when you're dealing with a lawsuit.
Additional Coverage to Consider
Beyond the basics, you may want to consider a Business Owner's Policy (BOP), which bundles general liability, property insurance, and business interruption coverage into one package. For salons and spas, a BOP typically costs around $1,200 per year, or $100 per month. It's an efficient way to cover multiple risks without juggling separate policies.
Property insurance protects your physical assets—furniture, styling chairs, mirrors, product inventory, and equipment. If your salon is damaged by fire, theft, or a burst pipe, property insurance helps you replace what's lost and get back to business. Business interruption coverage, often included in a BOP, pays for lost income if you're forced to close temporarily due to a covered event.
How to Get Started with Salon Insurance in Texas
Start by reviewing your commercial lease agreement to see what coverage your landlord requires. Most leases will specify minimum liability limits, often $1 million per occurrence. Next, assess your employee situation. If you have W-2 employees, get quotes for workers' compensation coverage even though it's optional—the peace of mind is worth it.
Shop around with insurers who specialize in beauty and wellness businesses. They understand the unique risks salons and spas face and can tailor coverage to your needs. Ask about bundling options like a BOP to save money, and make sure you understand what's covered and what's excluded.
Finally, if you decide to go without workers' compensation, don't forget to file the required paperwork with the state and post the proper notices. Failing to do so can result in penalties and won't protect you from lawsuits. The smart move for most salon and spa owners is to carry comprehensive coverage from day one. It costs less than you think and protects the business you've worked so hard to build.
