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Commercial Property Insurance for Sports and Fitness Businesses

Commercial Property Insurance for Sports and Fitness Businesses

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If your business property is damaged through fire, theft, or other covered perils, the financial impacts of costly repairs and replacements can be staggering. Additionally, your business may rely heavily on fitness equipment, so any damage to this equipment can have direct impacts on your ability to operate. To protect your business from these types of risks, it is important to consider Commercial Property Insurance. 

What is Commercial Property Insurance?

Commercial Property Insurance provides financial protection for your business property, including buildings, equipment, furniture, and inventory. If your company’s business property is damaged or destroyed by a covered peril, your insurer will provide financial support to assist your company in repairing or replacing your property. 


What property does Commercial Property Insurance cover? 

Commercial Property Insurance covers buildings, the contents within your buildings, and any property that is in your care, custody, or control. 


Commercial Property Insurance covers the buildings or commercial spaces belonging to or leased by your company. For sports and fitness businesses, it’s common to rent studio space or commercial property, and many lease agreements will require you to secure sufficient property coverage. Commercial Property Insurance can provide funds to repair or replace business property that is damaged by a covered peril. In addition to permanent fixtures, this coverage includes outdoor property not directly attached to the building. 



Commercial Property Insurance covers the contents within your building. This is especially important in the sports and fitness industry due to the large amount of fitness equipment that these businesses typically rely on. Your coverage includes the equipment that you own, as well as any property that you lease. Coverage extends to items such as computers, furniture, artwork, inventory, and more.


Property of Others

Commercial Property Insurance covers the personal property of others—such as customers—when it is in your care, custody, or control and located within your business premises. For fitness businesses that provide lockers or locker rooms for customers to temporarily store their personal possessions, this coverage may not be sufficient as the limits are typically low. For more comprehensive coverage of customer property, consider bailee’s insurance.


What property is not covered by Commercial Property Insurance?

There are a number of exclusions under a standard Commercial Property Insurance policy, so it’s imperative to review your policy if you are curious about a specific type of property. When it comes to the sports and fitness industry, a relevant exclusion is electronic data. If your company relies on valuable electronic data such as customer records or software programs, keep in mind that Commercial Property Insurance does not cover this electronic data. Instead, you may want to consider purchasing a separate electronic data policy. 

Additionally, vehicles are not covered by Commercial Property Insurance. This includes company-owned vehicles used to perform work. For instance, if your personal trainers drive to client locations, you will need to purchase commercial auto insurance to provide financial protection for your company’s automobiles. 

What risks are covered by Commercial Property Insurance?

For Commercial Property Insurance, you can choose between a named perils policy or an open perils policy. As the title suggests, a named perils policy will only cover risks specifically named in the insurance contract. On the other hand, open perils policies will cover all risks except those specifically excluded. 

Named Perils 

Your policy will specify which incidents are covered by your Commercial Property Insurance. This varies depending on your insurer, but some common named perils include: 


Open Perils 

Under open perils coverage, your policy will cover any damage to your business property unless it is specifically listed as an exclusion in your contract. Open perils policies are typically more expensive than named perils policies because of the broader coverage. If your business relies on various expensive equipment, it may be worth it to consider this policy.

What perils are excluded from Commercial Property Insurance?

There are many exclusions commonly listed on both open perils policies and named period policies, including the following:

Replacement Cost vs. Actual Cash Value Policies 

Your Commercial Property Insurance policy will provide you with two options for valuing your property: replacement cost (RC) or actual cash value (ACV). 

Replacement cost coverage will cover the cost to repair or replace your damaged business property with a new item of similar quality. Note that this option does not take depreciation into account. 

Actual cash value covers the value of the property at the time of the loss, so depreciation is taken into consideration when valuing the damaged property. Premiums for replacement cost coverage are typically higher due to the higher payout. 


What is coinsurance?

Many insurance policies require you to insure a minimum percentage of your business property value—usually 80%—in order to get the full value of a claim period or receive full coverage for claims. This minimum is called coinsurance, and it decreases the likelihood of businesses intentionally reporting lower values for their property to try to save on premiums.  

Because partial insurance losses are more common than total losses, purchasing a policy that covers a lower value is tempting because the premium is less expensive. Coinsurance serves to discourage this underinsurance. Your insurers can reduce the amount they pay for a claim if the coinsurance minimum is not met. 


Are there deductibles in Commercial Property Insurance?

Most Commercial Property Insurance policies include a deductible. The deductible is the amount of a loss that your business is responsible for paying before the insurance coverage begins. Typically, a higher deductible means a lower premium because the amount an insurer would have to pay is reduced. 

Additional Property Coverages

Business Income Insurance

Many sports and fitness businesses rely heavily on physical locations and equipment to function effectively. As such, damage to your property could mean an interruption of business. Business income insurance would provide coverage for loss of income and operating expenses (such as rent and payroll) if your business is interrupted or temporarily shut down due to property damage. It is particularly important for sports and fitness businesses to consider this additional insurance. After all, a majority of revenue likely comes from the physical location being open. 

Equipment Breakdown Insurance

With the vast amount of fitness equipment typically found within a sports and fitness business, equipment breakdown insurance is essential to cover the repair or replacement of damaged equipment. Standard Commercial Property Insurance policies do not cover the breakdown of equipment, so it is important to consider adding equipment breakdown insurance as an endorsement or a standalone policy. 

Inland Marine Insurance 

Inland marine insurance is a form of insurance that covers property not tied down to a fixed location and not covered by a standard Commercial Property Insurance policy. Many personal fitness trainers are required to bring the necessary equipment to their clients. If something were to happen to the equipment during transport, inland marine insurance would cover the damages. 

Virtual or Remote Fitness Coverage

The COVID-19 global pandemic has transformed the sports and fitness industry as more and more individuals turn to online fitness options. If you are teaching virtual fitness classes online, you are likely using equipment at home to conduct these courses. It is important to review your policy for more details about property coverage used off-site by remote workers. In general, the business equipment you use at home will likely be covered by your Commercial Property Insurance, but there is typically a low sub-limit for property off business premises. If your equipment exceeds that limit, consider adding additional locations to your policy. Typically, there is no extra cost for additional locations under your coverage because there is no change in the actual business property covered. 

Pricing and Quotes

Insurance companies take the basic information that you provide to them and calculate the risk of loss for your business. Part of this calculation will involve assigning a Commercial Property Insurance rating, which is specific to the building or property you’re looking to insure. The higher risk your business is rated, the higher the premiums will be.

Some of the factors that can affect your premium pricing include:

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer property policies:

ProviderCommercial PropertyBusiness InterruptionInland Marine

Final Word 

Many businesses in the sports and fitness industry depend on functioning equipment and an adequate location. Damage to your business property due to unforeseen disasters can be detrimental to your company. To ensure that your business is protected from these sudden mishaps, it is essential to consider Commercial Property Insurance. Purchasing adequate insurance coverage can give you peace of mind during major catastrophes and ensure that your business continues to thrive. 

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