Key Takeaways: Liability insurance for barbers is essential, but it can be a daunting addition to your budget and a confusing line item on your taxes. With that in mind, we’re here to answer the question of, “Is liability insurance tax-deductible for barbers?”
As a barber, you are often pulled in many directions. From brushing up on your beard styling skills to developing your latest marketing strategy to preparing for tax season, there is no shortage of tasks to keep your hands working and your mind busy.
Protecting the business you have built, the future you envision, and the hard-earned assets you’ve collected is essential to your immediate and long-term success, and investing in liability insurance helps do exactly that. However, insurance is another expense, making some barbers uncertain whether they need it and how they can fit it into an already-tight budget.
We’re here to help you navigate the world of barber insurance, including where it fits in with your taxes. After all, you could use a little break, whether it’s a tropical vacation or just a little boost to your tax deductions!
Why Liability Insurance is Important for Barbers
Before we dive into the details of how to deduct your liability insurance on your taxes, it’s important to reinforce why liability insurance is necessary for barbers in the first place. After all, you’re trained, experienced, careful, and have yet to make a serious mistake on the job, right?
The truth is that even the best, most cautious barbers still need insurance. All it takes is a customer slipping on a patch of spilled product or tripping on the corner of a rug for a lawsuit to occur. Even with the utmost care, your clippers can slip, or a client can have an allergic reaction to a hair care product.
In other words, you can’t always control every element of your environment. Things can and will go wrong, and it is better to be prepared and protected than left exposed to the potentially devastating consequences of a legal battle.
What is the Difference Between Professional Liability Insurance and General Liability Insurance?
When searching for the right barber insurance policy for you, your business, and your career, you will find that there are numerous types of coverage. This can be confusing, especially if you are investing in liability insurance for the first time, but don’t let the surplus of options overwhelm you.
A comprehensive barber insurance policy should include two types of coverage as a non-negotiable foundation: professional liability insurance and general liability insurance. These two essentials cover the vast majority of your insurance needs, including the majority of circumstances you may encounter on a daily basis.
Professional liability insurance covers things that result from the services you provide. For this reason, it is sometimes referred to as malpractice insurance. If you accidentally nick someone’s ear or a client experiences a burn from a barbering tool that was left on and exposed, professional liability insurance will protect you.
General liability insurance is considered “slip and fall” insurance, and it covers accidents, injuries, and property damage that occur within your shop. Situations such as these can include a bodily injury resulting from tripping on an exposed cord or falling near the shampoo bowl due to spilled water.
"Situations like these can include a bodily injury resulting from tripping on an exposed cord or falling due to spilled water – anything can happen."
Can All Barbers Deduct Liability Insurance From Their Taxes?
With the basics of barber liability insurance in mind, it’s time to answer the question every barber mulls over as tax season approaches: Is liability insurance tax-deductible?
The answer is a resounding “yes” for many barbers, but there are some caveats to consider.
If you are an independent or self-employed barber, your liability insurance premiums are considered a business expense and can be deducted from your taxes. This is phenomenal news for barbers who fall into these categories, as it gives them a much-needed tax break and a little extra money to reinvest in their careers.
On the other hand, if you have insurance that is provided by your employer, you have no claim to a deduction on your taxes. The reason is simple: you are not the one paying the premium.
In short, independent and self-employed barbers can claim liability insurance as a tax deduction, while traditionally employed barbers cannot. However, we recommend doing a bit of research on your own or consulting with a tax professional to ensure that you are abiding by the tax laws!
Get Your Taxes (and Career) on Track
Whether you’re looking for tax tips that can set your barbering business up for significant savings, barber liability insurance that will protect you when you need it most, or career guidance that puts you on the path to success, the National Association of Barbers is here to help.
Be sure to subscribe to NAOB for the latest barbering trends and industry insights. You can also check out our blog for a catalog of valuable resources that can help you thrive in your barbering career.
