Opening a gym or fitness center can be an exciting and rewarding endeavor, but it also comes with risks and liabilities. Having the right insurance coverage is crucial for protecting your business assets and finances. This guide will provide an overview of the major types of insurance policies that gym owners need to consider. When choosing insurance, it’s important to work with a knowledgeable provider like Active Insurance who can assess your risks and recommend the right coverages.
General Liability Insurance
One of the most important policies for any gym is general liability insurance. This covers any bodily injuries or property damage that occurs on your premises. For example, if a member trips over a treadmill and breaks their arm, or a weight plate falls and cracks the flooring, general liability insurance helps pay for medical bills, legal defense costs, settlements, and damages. It protects you against both lawsuits and out-of-court claims.
Most experts recommend at least $1 million in general liability coverage, but smaller gyms can likely get by with $500,000. Higher limits are advisable if you offer services like personal training, massage therapy, or CrossFit classes, which carry greater risk of injury. Be sure your policy specifically covers your equipment and amenities too.
Professional Liability Insurance
If your gym employs personal trainers or instructors, consider adding professional liability insurance as well. Also known as errors and omissions (E&O) coverage, this protects against claims of negligence or failure to provide adequate instruction or supervision. For instance, if a client is injured while using equipment under a trainer’s guidance and decides to take legal action, E&O insurance can cover legal fees and any damages awarded. It provides important protection for your staff members.
Property insurance safeguards your physical assets like equipment, furniture, inventory, and the building itself against losses from crime, fire, natural disasters, and other incidents. Make sure you have adequate coverage for replacing your key equipment and rebuilding costs if the structure is damaged. Talk to your insurance agent Active Insurance Solutions about the best valuation method for the gym – actual cash value or replacement cost. Be sure any improvements or renovations are factored into the policy too.
In most states, you are legally required to carry workers’ compensation insurance if you have any employees. This covers lost wages, medical expenses, and rehabilitation costs for staff members who suffer work-related illnesses or injuries. Premiums are based on payroll size and injury risks associated with various jobs. Class codes for gym workers often include clerical staff, personal trainers, maintenance workers, instructors, sales associates, managers, and owners. Keep in mind that independent contractors will also need their own policies.
Specialised Gym Insurance
Standard business policies may not address all the unique risks gyms and fitness centers face. That’s why specialty insurance products have been developed as well. These include:
- Exercise equipment breakdown insurance – Covers cost of repairs or replacements if treadmills, bikes, strength machines, or other equipment break down or fail. This prevents costly disruptions to your operations.
- Inland marine insurance – Protects movable property like weights, mats, portable equipment, flooring, and electronics that may be taken off site or stolen.
- Cyber liability insurance – Covers data breaches, hacking incidents, and other IT security issues that could expose member/client information.
- Abuse and molestation insurance – Provides protection in the event a staff member or trainer commits abuse. Gives access to defense costs, settlements, and damages.
- Key person insurance – Offsets revenue losses if a valuable employee or owner dies or becomes seriously ill.
Take time to review all these options with a qualified insurance broker to make sure you fill any coverage gaps and meet legal requirements. They can provide quotes on bundled insurance packages tailored specifically to your gym’s needs and budget. Don’t cut corners on insurance or you’ll risk the future of your business.
Final Tips for Gym Owners
- Take photos/videos and keep receipts for all equipment to accurately estimate replacement costs. Update your policy as you acquire new assets.
- Document safety protocols and supervision policies so you can demonstrate responsible practices.
- Require fitness staff to obtain professional liability insurance and provide you proof of coverage.
- Keep first aid kits visible and accessible and inspect/service equipment regularly.
- Post clear signage about proper equipment use, technique, risk, and warnings. Enforce rules consistently.
- Screen new members for health conditions and have them sign assumption of risk waivers.
Protecting your hard work and livelihood is a top priority when starting any new business. Partnering with experienced insurance professionals like Active Insurance Solutions ensures you have the right level of coverage at competitive rates. Use this guide as a starting point when evaluating the protection your gym requires.