You found this article because you are one of two things,
- You are currently an owner in the fitness industry seeking clarification and improvements on your current insurance program, or
- You are getting ready to open a fitness business and seek advice on where to start with insurance.
In either scenario, you are in the right place. Let’s get right to it.
There are about 9 Coverages we recommend to every fitness entrepreneur:
1. General Liability
This provides coverage if you are liable for or cause property damage or bodily injury to someone else. At the very minimum, the amounts of coverage you should have is $1,000,000 per occurrence, $2,000,000 aggregate total.
Example: A client comes to your gym, and you have just moped, but forgot to put the wet floor sign out and the client slips and injures themselves.
2. Professional Liability
If you or one of your trainers is negligent and is held liable for this negligence. This limit should match the $1,000,000 per occurrence, $2,000,000 aggregate that the general liability has. (Don’t worry, they are separate limits).
Example: One of your trainers teaches a client incorrectly on how to perform a lift, and that client is injured as a result of doing the lifting incorrectly.
3. Business Personal Property
Your equipment is expensive; therefore, we recommend taking an inventory of all of your stuff. Take stock of your equipment, computers, and anything that is not permanently attached to the building. Your amount of coverage should be determined off of this inventory list.
Example: There is a fire inside of your gym, and half of the equipment is destroyed, costing $50,000. (Pro Tip, you will have a deductible on this loss, so make sure your deductible is an amount you can come up with quickly.)
4. Building Coverage
If you own the building, you can insure it all on one policy with the rest of your coverages. This would cover losses from wind/hail, fire, pipe burst, and a whole host of other perils.
Example: A massive windstorm knocks your building down. This coverage would repair or replace the structure.
5. Tenant Betterments and Improvements
If you lease your space, this is a coverage that can be included in the business personal property limit. This provides coverage if you rent the space, put new floors in, make changes, and improve it. In most lease agreements, the tenant becomes responsible for the insurance on the updates the renter makes.
Example: A pipe bursts in the building and ruins the new floors you just put in. The landlord is most likely not responsible for this. Therefore, your business insurance would cover as long as you have this tenant betterments and improvements coverage.
6. Business Income
Should your fitness space be forced to close due to fire, pipe bursts, or any other insurance peril, your policy will pay to make up any lost income.
Example: A fire makes it so you cannot re-open your gym for five months. The insurance would pay you for your lost income during those five months you could not operate.
In a world where cyber insurance claims are one of the fastest-growing claims, no business or industry is immune to this risk. Should your data be stolen fro your computer, your email hacked, or any other of the many covered losses related to cyber, having coverage will save a lot hassle.
Example: A hacker creates an email that looks like it is coming from the gym and is asking the client to update their payment information. Then, the client responds with their banking information thinking it is the gym, and the hacker steals their money. This cyber coverage would make the client whole, as well as pay for any lost business you had because of this.
8. Workers Compensation
If you have employees and not just 1099 contractors, workers’ compensation will cover the employees if they are injured on the job.
Example: An employee is cleaning the top shelf, and the ladder slips out from under them, causing injuries.
9. Equipment Breakdown Coverage
This coverage helps make you whole from the sudden and accidental breakdown of machinery and equipment, including production and office equipment, heating and air conditioning systems, motors, and electrical panels.
Example: A large air conditioner short circuits due to a power surge causing the business to shut down. In addition to this coverage paying to repair the air conditioner, it will also pay for the lost income while your business was shut down.
Whew, that seems like a lot! Now let me show you why we are qualified to make these recommendations.
Click here to read our next blog about who we are and why we specialize in insuring the fitness industry.