All businesses carry some level of risk, but fitness studios and gyms are at higher risk for unexpected situations. When we invite customers into our gyms to work out, there is always a risk of injury. Plus, gym equipment can be expensive and hard to replace. To protect the assets of your business, it is important to choose the right insurance policy for your gym.
What is Gym Insurance and Why Do You Need It?
Gym insurance is a term for several insurance policies bundled together to protect your business. Oftentimes, gym insurance includes general liability, commercial property, workers’ compensation, and professional liability insurance. However, the specific policies will vary based on your business size, services offered, number of employees, and location.
Insurance policies help protect your business from expected events. For example, if a fire breaks out in the building, commercial property insurance will help you repair damage and replace ruined equipment. If a member gets injured while working out at your gym, general liability insurance or professional liability insurance (depending on the situation) will help pay for legal bills if the injury results in a lawsuit.
Every single gym, fitness studio, or fitness professional needs some kind of insurance coverage to protect their business. Even the safest workouts have the possibility of injury because customers are choosing your facility or your coaching to help them get healthier.
Types of Insurance for Your Gym
General Liability Insurance
Every business should have general liability insurance. This helps protect the business if an injury or property damage leads to a lawsuit. This coverage is for property damage or accidents that could occur at any business. For example, if a client slips in the bathroom and falls, general liability insurance would cover legal or medical fees resulting from the fall.
Professional Liability Insurance
If your gym has trainers or coaches that provide one-on-one instruction, answer fitness-related questions and give advice, or lead classes, you need professional liability insurance. This coverage covers legal costs for claims of negligence or error against the expertise of you or your employees. Where general liability insurance protects you from something that could happen at any business, professional liability insurance covers you for incidents related to the fitness instruction of your members.
If your gym is just equipment for members to use with no trainers or coaches to provide fitness advice or answer questions, you may not need professional liability coverage. However, if there is even a chance that an employee could share fitness “expertise” with a customer, it is safer to have the policy in place.
If you offer private sessions with clients, consider adding abuse and molestation coverage to your professional liability insurance. This can help protect the business if a customer ever makes sexual misconduct allegations against you or an employee.
Workers’ Compensation Insurance
If you have employees at your gym, you should have workers’ compensation insurance. This policy will cover medical expenses, lost wages, and rehabilitation/physical therapy if an employee suffers a workplace injury. Most states require workers’ compensation insurance with minimal exceptions. Check with your local regulations to see if it is necessary for your gym.
Commercial Property Insurance
Commercial property insurance covers your physical gym, including the building and all the things inside. Unexpected events such as tornadoes, fire, hail, vandalism, and theft that result in damage or loss are covered. If you are leasing your gym space, you will most likely be required by your landlord to insure fixtures that belong to the property owner, such as the air conditioning handler and light fixtures.
Medical Payments Insurance
Some businesses like to have medical payments insurance. Regardless of fault, this policy will cover medical expenses related to any injuries that happen at your gym. When your business can cover medical expenses for a customer, it shows good faith and can help minimize the chances of an injury leading to a lawsuit.
How to Choose the Right Insurance Policy for Your Gym
1. Determine Which Policies You Need
The kinds of insurance that you need will vary based on the size of your facility, how many employees you have, the location of your business, and more. An insurance agent that specializes in gym and fitness businesses can help you determine what kinds of coverage your business requires.
All businesses, including gyms, should carry general liability insurance. This is for the accidents and what-ifs that can happen through the normal operation of a business. If you offer classes, fitness advice, or personal training, you should also have professional liability insurance.
Certain business offerings can affect what kind of insurance you need or may require additional coverage. Talk to your agent about things like offering children’s classes, selling made-to-order food or beverages, and teaching martial arts.
2. Does Your Business Require Specialty Policies?
In addition to the most common kinds of gym insurance, your facility may require specialized coverage. Once again, your insurance agent can advise you on which kinds of insurance your business requires. Make sure you tell them everything about your business when you are getting a quote.
Product Liability Insurance
Product liability insurance protects your business if any products you sell could cause harm to customers. For example, selling fitness equipment and supplements may require product liability insurance. If someone gets injured using a product they bought from you or if a supplement you sold made them sick, the onus could fall on your gym.
Typically, selling things like t-shirts and refrigerated beverages does not require additional insurance past general liability. However, if you are selling items to be ingested with an intended result, consider adding product liability insurance.
If your facility hosts large events or competitions, your gym could see a lot more people than usual. Event insurance will help cover your business in the off-chance that someone suffers an injury or property damage during one of these events.
Most gyms have software that holds member records and payment information. While the best gym software has security against attacks, it is always possible for programs to be hacked. Cyber insurance will protect your business in the rare case that your system is hacked and customer information is stolen.
If you operate a mobile studio, offer outdoor classes, or use very expensive equipment, you should consider getting equipment insurance. Commercial property insurance usually covers your equipment inside the gym. Depending on your policy, you may not be covered if the equipment is damaged outside the gym.
Equipment insurance is essential for mobile fitness businesses since they are bringing the equipment to their customers. Plus, some equipment insurance policies will cover and replace old, worn-down equipment in addition to damaged or stolen equipment.
3. Determine Your Budget
Like most things in life, the goal is to get the best product possible for the lowest price. You want to make sure that your business is thoroughly protected, so be realistic when setting your insurance budget. Keep in mind that insurance for fitness businesses tends to be more expensive due to the associated risks of working out.
Small gyms may pay as little as $3000 per year. Larger gyms with multiple employees and additional services can pay tens of thousands of dollars for insurance.
4. Shop Around
Even if you have a large budget for gym insurance, you don’t want to pay more than you need to for coverage. Make sure you compare rates from different companies. You may be surprised by how much the prices can vary for the same coverage.
When making your final decision, read all the fine print. If you have any questions, talk to your insurance agent so that you can fully understand your policy. The insurance premiums and coverage amounts should be accurate for the size and value of your gym.
Some insurance businesses specialize in providing coverage for gyms and fitness studios. My gym used Affiliate Guard to put together our gym insurance policy. It is helpful to work with a company that understands the intricacies and needs of operating a fitness business.
5. Update Your Policy as Needed
As your business grows and changes, your gym insurance needs to grow with you. You should frequently evaluate your insurance policies to make sure they are up-to-date with any changes or additions at your gym.
Failing to update your policies can leave your business vulnerable in the case of an unexpected event. There is nothing worse than assuming you are covered and then finding out that an event will end up costing the business a ton of money.
When it comes to choosing the right insurance policy for your gym, it is important to not rush the process. Take the time to do your research and determine the types of gym insurance you need. An agent that is well-versed in fitness businesses can advise you on which policies and how much coverage you need. Make sure you shop around to find the best price for the coverage you need. Finally, continuously re-evaluate your insurance needs. You want to make sure your business is covered in the event of a disaster or accident. With gym insurance covering your back, you can focus on running the gym and helping people get healthier.