FAQ

It depends on several factors…

• Cause of injury
• What people were doing at that time
• Contractual agreement between barber shop owner and the person renting the booth space
• Current state of the law

Even when a barber shop owner should not be legally responsible, if an independent contractor does not have insurance, then the injured party will likely look to the barber shop when seeking recovery for medical bills, lost wages, and pain and suffering.

There are two ways liability coverage can be addressed…

1. The independent contractors can be required to carry their own coverage that names the barber shop as an additional insured, or

2. The barber shop can purchase liability coverage and name the independent contractors as additional insureds.

If the barber shop owner decides to require independent contractors to purchase their own liability coverage, the written contract between the barber shop and the contractor should state that:

• Each contractor is required to purchase liability coverage.
• Coverage purchased by the contract is “primary” and “non-contributory” to any other coverage. (This places the independent contractor’s coverage first in line in the event of a claim. In short, the additional insured status provides protection to the barber shop owner named in a lawsuit for the negligent acts of the independent contractor.)
• To prevent lapses in coverage, require that each independent contractor provide the barber shop with proof of or certificates of insurance every year, and to condition continued ability to work in the barber shop on that requirement.

If the barber shop owner decides the salon will purchase liability insurance and names each independent contractor as additional insured, the barber shop owner is assured of continuous coverage. However, there is a drawback to the contractors. This coverage would only apply when the contractor is working in the barber shop. There would be no coverage, for example, if the contractor is working out of his home or is performing services in a customer’s home.

If the contractors buy their own liability insurance, that policy should be extended to provide personal property coverage for such causes of loss as burglary, fire, and water damage.

If the independent contractors do not have their own coverage, the barber shop owner should talk to his agent about whether the property damage coverage of the barber shop is…or can be…extended to cover the property of the independent contractors.

Yes, if there is an employer/employee relationship between the barber shop and the contractor.

There are some important considerations to determine employer/employee relationship…

• How much control does the barber shop have over the way the independent contractor performs his work?
• How are payments made by customers or to the independent contractors?

If all payments are made to the barber shop and then funds are distributed to the barbers (rather than payments being made to the barbers and then a portion being paid by them to the barber shop owner,) it is more likely that an employment relationship exists.

• Does the barber shop owner provide the place to work, uniforms, products, equipment or tools, and the customers for whom the work is done?

In the barbering profession, the difference between independent contractor and employee may be especially vague. Owners never should assume they do not need worker’s compensation. (Consult with your legal advisor and then talk to your insurance agent.)

Employment Practices Liability Coverage protects a barber shop from claims of discrimination or harassment from the independent contractors.

Such claims occasionally arise when the contractual relationship is terminated.

These claims are not covered under a commercial general liability insurance policy and can be very expensive to defend.