Sports and fitness businesses operate in a risk-prone industry. Given the physical nature of the work, employees and customers alike can suffer bodily injuries. Moreover, any business that operates from a physical location is open to risks such as crime, property damage, and on-site accidents. The right insurance coverage can help protect your business.

Sports and Fitness Business Insurance Types

General liability insurance is a critical coverage for sports and fitness businesses to protect themselves against third-party liability due to personal injury or property damage. If you own a gym, studio, or any retail location, you’ll want to have general liability in case any non-employee accidentally gets injured on your business property.

If you visit clients at their offices or homes, you’ll want to have general liability in case you unintentionally damage their property in the course of your work. Accidents happen all the time, and general liability can provide you with financial coverage to deal with any lawsuits that may arise.

Example:

• You own a spin studio, and a customer walking into your lobby accidentally slips on some water that was spilled on the floor. The customer injures his wrist in the fall, and he sues your business for damages. Your general liability policy would cover the legal expenses and any settlements or judgements from the lawsuit.

Professional liability insurance protects your business from lawsuits claiming failures or negligence in your professional services or advice. For businesses in the sports and fitness industry, professional liability insurance is vital, as much of your work involves instructing clients on their health, fitness, and physical training. If a client suffers an injury or trauma due to your business’s instruction, they may sue for damages. Professional liability insurance can provide the funds needed to address any lawsuits and cover any legal fees.

Example:

• An older client has recently signed up for personal training at your fitness studio. She is paired with a newer personal trainer you recently hired. The trainer pushes the client hard, instructing her to perform a series of high-intensity exercises. The client ends up suffering a heart attack and must be hospitalized. She sues your business for damages.

Commercial property insurance can protect the value of your business property, including buildings, equipment, computers, and more. For sports and fitness businesses, property coverage is crucial if your business owns fitness equipment or leases or owns a physical retail location. The equipment you use may be expensive, and it could be difficult to recover from a disaster without adequate insurance coverage. Commercial property insurance can pay to repair or replace property that is damaged or destroyed due to a covered peril, which commonly includes hazards such as fire, windstorm, vandalism, theft, and explosion.

Example:

• A wildfire devastates your local area, and your pilates studio has been severely impacted. All of your equipment, including your reformer machines, have been damaged beyond repair. Your commercial property insurance would provide the funds needed to replace the damaged equipment and repair your studio.

Workers’ compensation insurance provides financial and medical benefits for employees who suffer work-related injuries or occupational diseases. Workers’ comp can also provide death benefits for an employee’s dependents in the case of a work-related employee death. Workers’ comp is required for almost all businesses and is especially important for businesses involved in more physically dangerous work. For sports and fitness businesses, workers’ comp is an essential coverage given the physical nature of your work.

Example:

• You own a high-intensity interval training studio, and one of your senior instructors has recently suffered a torn ACL while teaching a class. She must undergo surgery and will be unable to work for six to nine months as she recovers. Workers’ compensation insurance will provide coverage for her medical expenses as well as a portion of her lost wages while she is unable to work.

A business owner’s policy (BOP) bundles general liability, commercial property, business income, and extra expense coverage together into a single policy. This type of plan has the benefit of a lower premium than buying each policy separately. BOPs are available only to qualified small businesses, typically requiring that your business have less than 100 employees, make less than $5 million in annual sales, and operate from a physical location or office. Smaller sports and fitness businesses should consider taking advantage of this type of plan, as it affords a broad range of coverage at reasonable rates.

Additional Insurance Coverage

Depending on the specific type of sports and fitness business you operate, there may be other relevant insurance types worth purchasing. Below are a few to consider.

• Cyber liability insurance protects your business from the financial consequences of cyberattacks, data breaches, and other cyber threats. Your business may store sensitive data on your customers and employees, including contact information, credit card numbers, and Social Security numbers. If this information is stolen, you may be sued. Cyber liability insurance can provide the funds to defend your business in a lawsuit, as well as any expenses necessary to recover from a cyber event.
• Business interruption insurance, also known as business income insurance, can provide coverage for lost income and operating expenses in the event you need to temporarily close your business as a result of property damage. Commonly added as an endorsement to commercial property insurance, business interruption insurance is critical for those businesses that heavily depend on physical property. If you operate a retail space, like a gym or fitness studio, business interruption insurance can help keep your company afloat while you recover from a disaster.
• Commercial crime insurance can help protect your business from losses that result from crimes such as theft, burglary, and fraud. This type of coverage is especially important for fitness studios or gyms, which often have locker rooms or changing areas that are not monitored spaces. Clients could have their personal items stolen from lockers, and commercial crime insurance can provide coverage for such incidences.

Insurance Coverage for Your Employees

Part of protecting your business also means providing the right coverage for your employees. You can sponsor group insurance plans for your employees to provide financial protection in their time of need. A comprehensive employee insurance plan can also serve as a way to attract and retain top talent.

Group health insurance helps your employees pay for medical and healthcare expenditures, including everything from primary care to hospitalizations and surgeries. Offering health insurance to your employees can not only keep your employees in better health, but it can also help to retain your employees. In the sports and fitness world, health is top of mind, and many prospective employees will be looking for health coverage as part of a compensation package.

Group life insurance provides a financial payment to an employee’s family or other survivors if the employee unexpectedly dies. The death does not have to be work-related. Although individuals can purchase life insurance on their own, as an employer-sponsored group, you can usually obtain better rates than an employee could get on their own.

Group disability insurance provides income to employees who cannot work as a result of non-work-related injuries.

What sports and fitness businesses need insurance?

All sports and fitness businesses can benefit from some form of business insurance coverage, and in fact, some minimum levels of liability coverage may be a requirement of doing business. In the sports and fitness world, physical injury is top of mind, and protecting your business, as well as your employees and clients, against the consequences of bodily injury is an important part of managing business risk. Other liabilities and risks, from property damage to cyber threats, may be applicable to your specific business as well. Ensuring that your business has the right set of insurance policies is a crucial step in building a comprehensive risk management strategy.

If your sports and fitness business meets any of the following criteria, you should consider purchasing business insurance:

• You provide professional services, advice, or instruction
• You own or lease office or retail space
• You work at customer homes or offices
• Your business owns valuable property, such as specialized fitness equipment
• You employ others
• You store sensitive customer or employee information
• Your business facilitates high-risk physical activity

Commercial insurance can cover a wide variety of sports and fitness businesses. Some common businesses and professions that need insurance include:

Choosing an Insurance Company

The first step in acquiring insurance for your sports and fitness business is finding the right insurance company to partner with. Below, we’ve highlighted a few of our trusted insurance partners, who offer a variety of coverage suitable for sports and fitness businesses. We’ve also included a few factors that are important for your business to consider when evaluating insurers.

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Financial strength. While you may think getting the best-priced policy should be your main goal, it is more important to ensure you purchase insurance from a financially stable provider. It’s worth remembering that insurance claims are paid directly from the finances available to the insurance company. In other words, if the insurance provider is financially stable, they will be able to fulfill their claims commitment. When an insurance company does not have financial stability, it may collapse and be unable to support you.

While this is rare, it does happen. You want to know your company is always secure and certainly don’t want the surprise of finding out your insurance provider cannot cover your losses when you make a claim.

Of course, this leads to the obvious question: How do you know your insurance company has financial strength? Unfortunately, it is not as simple as just purchasing a policy from the biggest industry names because even giant insurers go through periods of financial instability. Luckily, there are rating agencies that grade insurance companies in terms of their financial strength. Some of the major rating agencies are Fitch, Standard & Poor’s, AM Best, and Moody’s.

Price. Cost is important for any business, but the price of insurance is not the only factor. Instead, your sports and fitness business will be better served by looking for the policy that is the most affordable but also meets all your requirements.

Different insurers have different methods for determining the premium you will pay, although there are some industry standards. For insurance companies, pricing is all about determining how much risk your business presents. The key to finding the best deal that meets your company needs is to shop around. Speak to insurers, use online quote engines, and work with brokers to ensure you get the coverage you require to protect your business.

Customer service. While you want your insurance provider to be financially stable and priced competitively, it is also important that you can engage with the company. It is possible you will need to make a claim, change policy details, or update personal information. In these cases, you want to deal with a company that has good customer care. While most major carriers have good customer service records, some spend more time and effort on ensuring their customers are taken care of. This may seem unimportant, but dealing with welcoming, qualified, and thoughtful professionals will be vital during a claims process.

Final Word

Finding the right insurance coverage for your sports and fitness business is a critical step in building a solid safety net for your company. Business insurance can not only protect your business from the financial impact of a disaster or accident, but it can also provide your employees, customers, and partners with reassurance knowing that a reputable insurance company stands behind your business. While sports and fitness businesses share many common risks, it’s important to take the time to look into what specific coverage your particular company may need. Spending the time now to invest in a risk management plan for your business will be sure to yield dividends in the future.