What Types of Insurance Does a Gym Need?

Gym members often find satisfaction in moving their bodies in healthy ways. Gyms and fitness studios offer a great way to pursue a healthy lifestyle, learn from fitness coaches, take classes, and socialize. Amongst all the great aspects of a gym, insurance is necessary to keep the gym business strong despite any accidents or losses that may occur.

Related: Guide to starting a gym

What Are Some Risks for a Fitness Studio?

Fitness studios and gyms have several risks that can cause financial hardships. Some examples of a gym’s risks include the following:

• Customer injuries
• Trainer errors or mistakes 
• Employee injuries
• Sudden loss of business
• Fire damage

Customer Injuries

One of the more significant concerns for gyms is the risk of on-site customer injuries. For example, slips and falls can result in muscle strains, sprained joints, or broken bones. Gym floors cluttered with equipment, such as jump ropes, mats, and dumbbells, increase the risk of slips and falls. Additionally, gym floors are prone to becoming wet in areas such as pools, spas, and near water fountains. 

Customers can also become injured while using gym equipment, especially if the customer is unfamiliar with the equipment or the equipment is defective. Also, falling weights or tipped equipment can lead to crushed limbs and broken bones. In addition, fatal injuries can occur due to improper use of equipment or gym areas, like pools, saunas, and steam rooms—for instance, drowning is a concern in pools and hot tubs.

Patrons can also suffer injuries from employees. For example, physical trainers and coaches may push a client beyond their limit and cause injury. Additionally, a lack of supervision can lead to health emergencies or injury. For instance, supervision is often decreased during off-peak hours at gyms that operate 24/7, increasing the chance of customer injury. 

Trainer Errors or Mistakes

Personal trainers or coaches have a professional liability exposure while assisting members with their fitness. Negligence or failure to adequately assess a client’s abilities and modify a workout program can lead to injuries and lawsuits.

In addition, errors or mistakes in leading a workout, such as teaching improper form or unsafe movements, can lead to injuries. Similarly, poor recommendations for workouts or diets can worsen or cause injury or illness.

Employee Injuries

Employees and independent contractors employed by the gym have several potential injury hazards while at work. For example, employees can be harmed from slips, trips, and falls. In particular, maintaining bathrooms and pool areas can be a primary source of slip hazards for employees as these areas quickly become slippery. Further, pool and spa cleaning chemicals are hard on the eyes and skin and may irritate if the substance splashes or spills.

Employees may also risk muscle strains and back injuries while maneuvering gym equipment and heavy weights. Heavy weight machines or weights may fall on an employee, causing crushed or broken bones. Additionally, employees can be injured by improper spotting (aka, supporting) of members using gym equipment.

Sudden Loss of Business

Gyms risk losing income and clients if the building closes due to an extensive loss, such as a fire or water damage. Gym owners depend on an open location to welcome members to use their amenities. If the building suffers extensive damage, not allowing the business to safely remain open, the gym will inevitably lose valuable business income.

And although a new location is possible for gyms, a changed location risks losing regular customers who may be unwilling to move to a new location. Further, finding a new space with adequate room for the gym equipment, pools, saunas, and classes can pose a challenge that even more so delays a reopening.

Fire Damage 

Gyms have some risks that can lead to fire damage in the facility, potentially resulting in an extended closure and lost income. For example, malfunctioning equipment, faulty wiring, and overheating saunas and spas are some of a gym’s fire hazards.

In addition to the fire hazards, gyms also have substances and materials that increase the building’s fire load. Pool and spa chemicals are the main concern as these substances are highly flammable. Also, equipment and supplies, such as towels, paper products, wooden lockers, and flammable carpeting or rubber flooring, may contribute to a fast-spreading fire.

What Types of Insurance Should a Gym Consider?

Although several risks exist, fitness centers can protect from financial hardships following a loss with adequate insurance coverage. For example, some of the insurance policies that a gym should consider include the following:

• General liability insurance
• Professional liability insurance
• Workers’ compensation insurance
• Business interruption insurance
• Commercial Property insurance 

General Liability Insurance

General liability coverage protects gyms for claims of bodily injury or damaged property that occur on-site or due to the gym’s activities. Bodily injury claims include on-site customer injuries (but not employee injuries) from slips and falls. The general liability policy insures fitness centers for potential third-party lawsuits. 

A general liability insurance policy covers many possible on-site liabilities that can lead to third-party injury or property damage. In the event of a claim, the policy offers coverage for

• Medical expenses
• Repairs for damaged property
• Legal defense costs
• Settlements

Professional Liability Insurance

A professional liability policy (also referred to as error & omissions insurance E&O) insures gyms for lawsuits involving errors, mistakes, or negligence that results in a client suffering bodily harm. For instance, if a personal trainer recommends a yoga workout that a client cannot do safely, resulting in injuries, a professional liability policy covers the business for resulting lawsuits. A professional liability policy covers associated legal costs for the claim.

Since there is some overlap in coverage between a general liability policy and a professional liability policy, it is best to have one insurance company insure both. This way, the gym avoids coverage delays or disputes over which company is responsible for covering the claim. 

Workers’ Compensation Insurance

Workers’ compensation insurance is a helpful policy for gyms because it covers employee injury claims. Employees may accrue extensive bills from doctor visits, emergency room visits, and physical therapy appointments following an incident at work. Moreover, the employee may lose income if they cannot work during recovery. Fortunately, a workers’ compensation policy helps alleviate these expenses by offering coverage for the following:

• Medical bills
• Lost income
• Ongoing rehabilitation care
• Disability income
• Funeral expenses

Many states mandate that businesses with employees carry workers’ compensation insurance. The coverage helps injured employees, but it also protects the business from potential lawsuits from injured employees. So, whether or not the state requires workers’ compensation insurance, gyms with employees should consider this valuable coverage to protect both their employees and their own financial well-being. 

Business Interruption Insurance

A business interruption insurance policy offers financial assistance to gyms during times of an extended closure following a loss. For example, a closure for repairs following fire damage may cause the gym to lose income. However, business interruption insurance covers many of the gym’s claim-related expenses. Some of the coverages offered by a business interruption policy include

• Reimbursement for lost income
• Payment on regular loans and bills
• Coverage for a temporary relocation
• Coverage for employee wages

Commercial Property Insurance

A commercial property insurance policy covers structures and items lost or damaged due to covered perils. Most property insurance policies include coverage for the following perils:

• Fire 
• Wind or hail
• Falling objects
• Explosion
• Vandalism or theft
• Water damage from leaking pipes

A property insurance policy normally covers structures for their rebuilding cost, so in a total loss, the structure could be rebuilt for one of like kind and quality. Additionally, business items, such as inventory, supplies, and equipment, are covered on a replacement cost basis or an actual cash value basis (which accounts for depreciation, wear, and tear). 

How Much Does Gym Insurance Cost?

Insurance costs fluctuate from one gym to another because coverage is tailored to each gym’s individual needs. For instance, a gym with no pools or saunas doesn’t need coverage for this risk. Comparatively, a gym with pools and saunas has a higher injury risk and will likely have higher insurance costs to cover the risk. Different features affect the coverage amounts and risk exposures, which ultimately influence business insurance costs.

Some features that affect gym insurance costs include the following:

• The size and condition of the structure 
• The value and condition of gym equipment
• Employee training and certification
• Personal trainer certification
• Fire suppression systems
• Any past or current lawsuits or insurance claims

Generally, the best way to determine insurance costs is to contact an insurance company for a quote. Since different insurance providers offer varying packages and bundle discounts, it is ideal to get multiple quotes to compare coverages, discounts, and pricing. This way, you will get an overall idea of insurance costs and be able to pick a policy that best fits your gym’s needs.