No one likes to think about all the things that can go wrong. While insurance may feel like just another bill to be paid, it is important to keep your business financially sound if something unexpected happens.

Fitness studios have unique insurance needs. Clients and staff are often involved in intense physical activity, and someone could get injured while using the equipment, or pull a hamstring while working with a trainer. All these incidents can leave you wide open to liability claims and lawsuit, which is why you take the appropriate steps to protect yourself and your employees.

Professional liability insurance covers instructors, staff members and anyone who interacts with clients. This would cover your business in case you or an employee gives exercise advice that leads to a client’s injury. But, there are several caveats to this type of coverage.

Determining whether or not your studio has adequate professional liability coverage is a complicated process. For example, how you use your space and how you define the actual workout space impacts your coverage. If one of your instructors asks a client to jog around the block as a warm up and that client suffers an injury, your studio may not be covered if you are sued. Train your staff to eliminate risk of injury from accidents related to smaller, mobile pieces of equipment being used in different areas at different times.

The professional liability policy you have for your studio does not cover instructors who have been hired as contractors. Unless the instructor is an employee, they must have their own liability insurance. To minimize the risk of your studio having to pay claims against an independent contractor who works for your business, that instructor has to add your studio as an “also insured” on their policy.

General liability covers bodily injury and property damage that occurs in your location. If you lease your studio space, your landlord probably requires a minimum insurance coverage for studios, realizing that they will potentially be called in to any litigation against the studio tenant. They usually require a minimum policy of  $1,000,000 per person (or the maximum amount the insurer will pay for one person’s injuries) and $3,000,000 per occurrence (or the maximum amount the insurer will pay for all claims resulting from a single occurrence, no matter how many people are injured, how much property is damaged, or how many different claimants may make claims).

If you offer services beyond a good workout, you may need additional supplemental liability coverage. The following list of services are not covered and require additional coverage:

  • Swimming pools
  • Hot tubs and saunas
  • Rock climbing walls
  • Day spa services
  • Tanning services
  • Massage
  • Skin care services

If you have personal assets, such as equipment, technology or even your tablet, that were not purchased through your studio, but are used for studio business, it may not be protected by the company policy.

You should also be aware that general liability isn’t a catch all and you may need additional policies, such as:

  • Product liability insurance covers your risks related to selling products such as equipment, beauty products and nutritional products.
  • Employees practices liability insurance covers the risks of being an employer. This type of coverage insures your business in the event that your studio is accused of poor practices, sexual harassment or discrimination regarding hiring, firing and employee discipline.
  • Workers compensation covers work-related injuries or illnesses your employees may experience on the job, and covers some portion of lost wages.
  • Property coverage covers damage to your studio caused by fire, severe weather and vandalism.
  • Equipment insurance covers your equipment in the event anything is broken or stolen.

If you own a dance, yoga, martial arts or combative sport studio, additional lines of coverage are required. For example, you will need participant liability and accidental medical coverage if your studio hosts martial arts or boxing tournaments or supervised competitions. This will cover costs of medical care for any injured participant.