What salon and spa franchisors require of franchisees: the insurance section of the franchise agreement and how to prove you meet it

What your salon or spa franchisor requires

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A salon or spa franchise agreement typically requires general liability of $1M per occurrence and $2M aggregate with the franchisor as additional insured, professional liability of $1M per claim for the brand's services, abuse and molestation coverage where massage or body treatments are offered, replacement-cost property on the branded build-out, business income, statutory workers' compensation, an umbrella of $1M to $2M, and certificates filed with the franchisor before opening and at each renewal.

Reviewed by Michael LaBarbera, Licensed property & casualty agent, Provident Financial Group · Reviewed Oct 11, 2026 Updated Oct 14, 2026

Typical requirements and how to check them
Requirement	What they usually ask for	How to check what you have
Commercial general liability	$1M each occurrence / $2M aggregate with the franchisor, its parent and affiliates as additional insureds, primary and non-contributory, written on a form that does not exclude the brand's services	Dec page limits, the additional insured form and the exclusions page; some franchisors name the exact endorsement form in the operations manual.
Professional liability	$1M per claim / $2M aggregate for hair, nail, skin, waxing, lash and spa services on the brand's menu, including treatments performed by independent contractors working under the brand	A beauty or spa professional liability coverage part or policy whose definition of services matches the brand menu; franchisors reject general-only policies.
Sexual abuse and molestation coverage	$1M per occurrence where massage, body treatments or waxing are offered, often required at the full liability limit rather than a sub-limit	A coverage part or endorsement with its own limit, on the general or professional policy; the franchisor's manual usually states the required limit.
Property on the branded build-out and equipment	Replacement cost on the fit-out, stations, treatment rooms, equipment and product, sometimes with a minimum tied to the initial investment	Business personal property and tenant improvements limits on the BOP; devices scheduled where the carrier requires it.
Business income	Rent, royalties and continuing expenses through a covered closure, commonly twelve months; some agreements require royalties to be covered expressly	Business income line on the property policy and its period of restoration.
Workers' compensation and employers' liability	Statutory plus employers' liability of $500K or $1M; the agreement often addresses booth renters and requires them to carry coverage or be covered	Information page of the policy; renters' certificates or an endorsement covering them where applicable.
Umbrella or excess liability	$1M to $2M following form over general, professional and employers' liability	Umbrella dec page and underlying schedule; confirm it follows form over the professional and abuse coverage.
Certificates and the approved carrier list	Certificates filed with the franchisor before opening and at each renewal, notice of cancellation, carriers rated A- or better, and sometimes a franchisor-sponsored program the franchisee may join	The operations manual's insurance section and the franchisor's certificate portal; a live certificate meets the renewal and notice conditions.

Requirement

What they usually ask for

How to check what you have

Commercial general liability

$1M each occurrence / $2M aggregate with the franchisor, its parent and affiliates as additional insureds, primary and non-contributory, written on a form that does not exclude the brand's services

Dec page limits, the additional insured form and the exclusions page; some franchisors name the exact endorsement form in the operations manual.

Professional liability

$1M per claim / $2M aggregate for hair, nail, skin, waxing, lash and spa services on the brand's menu, including treatments performed by independent contractors working under the brand

A beauty or spa professional liability coverage part or policy whose definition of services matches the brand menu; franchisors reject general-only policies.

Sexual abuse and molestation coverage

$1M per occurrence where massage, body treatments or waxing are offered, often required at the full liability limit rather than a sub-limit

A coverage part or endorsement with its own limit, on the general or professional policy; the franchisor's manual usually states the required limit.

Property on the branded build-out and equipment

Replacement cost on the fit-out, stations, treatment rooms, equipment and product, sometimes with a minimum tied to the initial investment

Business personal property and tenant improvements limits on the BOP; devices scheduled where the carrier requires it.

Business income

Rent, royalties and continuing expenses through a covered closure, commonly twelve months; some agreements require royalties to be covered expressly

Business income line on the property policy and its period of restoration.

Workers' compensation and employers' liability

Statutory plus employers' liability of $500K or $1M; the agreement often addresses booth renters and requires them to carry coverage or be covered

Information page of the policy; renters' certificates or an endorsement covering them where applicable.

Umbrella or excess liability

$1M to $2M following form over general, professional and employers' liability

Umbrella dec page and underlying schedule; confirm it follows form over the professional and abuse coverage.

Certificates and the approved carrier list

Certificates filed with the franchisor before opening and at each renewal, notice of cancellation, carriers rated A- or better, and sometimes a franchisor-sponsored program the franchisee may join

The operations manual's insurance section and the franchisor's certificate portal; a live certificate meets the renewal and notice conditions.

What the franchisor is protecting

A franchisor's insurance section protects the brand across every location: the franchisor and its affiliates as additional insureds on every franchisee's liability policies, professional and abuse coverage for the services the brand sells, property and business income so a location reopens and royalties continue, and a certificate portal that shows every unit compliant. The minimums sit in the franchise agreement and the detail in the operations manual.

The lines a salon franchise agreement names

General liability with the franchisor added, written for the brand's services. Professional liability matched to the menu. Abuse and molestation coverage where treatments involve touch. Property on the branded build-out at replacement cost. Business income including royalties. Workers' compensation, with booth renters addressed. An umbrella that follows the professional and abuse coverage. Certificates through the franchisor's portal from carriers on its approved list.

How to check your policies against the agreement

Read the insurance section of the agreement and the manual together. Match the general liability limits and confirm the additional insured form. Compare the professional liability definition of services to the brand menu and confirm abuse coverage at the required limit. Check property and business income limits against the build-out and royalty obligations. Confirm workers' compensation and the booth renter arrangement, and the umbrella's underlying schedule. File through the portal.

Keep the certificate current

Franchisor portals expire certificates at each renewal and flag units as non-compliant, which can affect renewal of the franchise itself. A live certificate link stays current as policies renew and notifies the franchisor when a line changes, with the official PDF attached.

Questions people actually ask

Can the franchisor make me buy insurance from its program?

Franchise agreements usually set minimums and let the franchisee choose the carrier, with a sponsored program offered as an option. Read the agreement; where a program is mandatory it will say so, and the certificate still has to show the same lines.

Why does the franchisor want abuse coverage for a nail and wax salon?

Because treatments involve touch in private rooms and the brand's reputation is at stake across every location. The manual sets the limit; a spa or salon professional form with the abuse coverage part is the usual answer.

Does business income need to cover royalties?

Royalties keep accruing during a closure in many agreements, so franchisors ask that business income cover them. Confirm the limit covers rent, royalties and payroll for the period of restoration.

Our stylists are independent booth renters. What does the franchisor expect?

Either that each renter carries general and professional liability with certificates on file, or that your policies cover them. The agreement and the state's treatment of booth renters decide which; the franchisor wants the brand covered either way.