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Indoor Sports Facility Insurance

Business Insurance for Indoor Sports Facilities

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Indoor sports facilities can host several types of sports including but not limited to basketball, tennis, handball, racquetball, wrestling, weightlifting, swimming, cheerleading, and gymnastics. Your facility may serve concessions, sell sporting equipment, hire instructors and coaches, and even include bleachers or stadium seating to accommodate spectators. Because every indoor sports facility is unique and can include a wide range of amenities, extensive business insurance is vitally important to ensure you do not miss any coverage gaps.

What insurance coverage do I need for my indoor sports facility? 

There are many types of insurance coverage to consider, but these policies are particularly relevant to indoor sports facilities:

General Liability Insurance

General liability insurance financially protects your business if you unintentionally cause bodily injury, property damage, personal injury, or advertising injury to a third party. The customers, players, students, and instructors of your indoor sports facility are all pushing their physical limits and by doing so, they increase your liability exposures. Your facility may house locker rooms or showers, causing an additional risk for slip-and-fall incidents. 

Additionally, general liability insurance covers third-party bodily injury or property damage resulting from product liability. You could be held liable if a customer is injured or becomes ill from the sporting equipment sold at your facility or from the concessions served during your events.

General liability insurance can also provide funds for lawsuits based on non-physical injuries. For instance, if you are accused of copyright infringement in advertising, slander, or libel, general liability insurance provides financial protection against these claims. 

Examples:

Commercial Property Insurance

Commercial property insurance can protect the value of your indoor sports facility if an unexpected disaster damages or destroys your property. Common perils covered by commercial property insurance include fire, theft, vandalism, windstorm, and water damage.

Indoor sports facilities are a large investment, and it can be difficult to recoup your losses in the event of property damage. Property exposure for your facility may also be high due to the wiring for lighting, sound systems, and other electronic equipment used during sporting events. Furthermore, stage preparations for tournaments often include flammables, and if your indoor sports facility serves concessions, food preparation done on the premises further increases your risk. 

Example:

Professional Liability Insurance

If your indoor sports facility hires trainers, coaches, or instructors, then professional liability insurance is a critical type of coverage for your business. Professional liability insurance provides funds for lawsuits and damages related to the professional advice and services provided by your facility. A dissatisfied client may file a lawsuit against your business for work errors, inaccurate advice, negligence, or even failure to deliver promised results.

Example:

Workers’ Compensation Insurance

Workers’ compensation insurance provides financial and medical benefits to employees who suffer work-related illnesses or injuries during the course of their work. This coverage includes the employee’s medical expenses, rehabilitation, and a portion of lost wages. Workers’ compensation insurance can also provide funeral, burial, and death benefits for the employee’s surviving family in the case of a work-related death. 

Your trainers, instructors, and coaches are particularly prone to workplace injuries and long-term health conditions resulting from the physical nature of their work. As for your sporting events, employees who set up equipment and lighting are at risk for injuries such as cuts, electrical shocks, slip-and-fall injuries, back injuries, and sprains. 

Each state has its own regulations and requirements for workers’ compensation insurance so it is important to understand your state’s requirements to ensure that you have adequate coverage for your employees.

Example:

Liquor Liability Insurance

If your indoor sports facility serves alcohol, your business is exposed to several risks. Liquor liability insurance serves to protect your business from liability in situations where individuals cause injury or damage to others after consuming alcohol sold by your facility. For instance, your business may be held liable if intoxicated customers cause car accidents, unintentionally injure another person, start a fight, or damage someone else’s property. Liquor liability insurance can cover damages and legal expenses in the case of a lawsuit.

Example:

Business Income Insurance

Business income insurance (also known as business interruption insurance) provides coverage for loss of income and operating expenses if your business must temporarily close to recover from physical loss, damage, or destruction by a covered peril. This coverage includes the business’s net profits and normal operating expenses such as rent, employee salaries, and taxes. 

This is an important consideration for indoor sports facilities since damage to your equipment, building, or other business property will have a direct impact on your ability to operate and collect revenue. These damages may also interrupt sporting events, resulting in a substantial financial loss.

Business interruption insurance is unavailable as a standalone policy. Instead, it added to your commercial property insurance policy or bundled with a business owner’s policy.

Example: 

Additional Coverages 

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, an indoor sports facility with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

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 coverage for indoor sports facilities and complexes:

ProviderGeneral LiabilityProfessional LiabilityBusiness Owner's Policy
Embroker??????
CoverageSmith??????
CoverWallet??????
Hiscox??????
Thimble??????

Business Insurance and Coronavirus

COVID-19 has had a major impact on businesses, including indoor sports facilities, and you may be wondering how business insurance can provide any financial relief. While there is some protection that can be provided, in most cases, insurance will not cover coronavirus-related losses. 

You cannot purchase a new policy to cover coronavirus-related losses that have already occurred and insurance policies will not cover losses that have already been discovered.

If you have business interruption insurance, the losses you’ve suffered from temporary closures due to COVID-19 are not typically covered. Unless your policy specifically includes coverage for losses caused by communicable or infectious diseases (which is rare), your business interruption policy will likely only cover losses caused by a direct physical loss or damage.

Workers’ compensation for COVID-19 greatly varies depending on the state. If your employees contract COVID-19 while working, they may be eligible for workers’ compensation payments in some states.

If a client or other third party sues you claiming that they contracted COVID-19 after visiting your business, some commercial general liability policies will provide coverage. Once again, this depends on your individual policy and the laws of your state.

Consult our FAQ on coronavirus and business insurance for more information.

Final Word 

Although the process of choosing business insurance for your indoor sports facility may be daunting, it is essential to take your time when considering your various risk exposures to ensure there are no gaps in your coverage. The large range of sports, amenities, and services provided by indoor sports facilities means your business may have very different coverage needs than a neighboring facility. Carefully selecting adequate coverage is essential to protecting your business in the face of an unexpected disaster or accident.

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