What Is the Cost of Gym Insurance? Blog | What Is the Cost of Gym Insurance?
Insurance Basics 03/09/20

What Is the Cost of Gym Insurance?

When operating any business, you need to be sure you’re protected against all possible legal injunctions. In tech, you have to be diligent about data security and IP theft. Restaurants need general liabilities and liquor licensing. In the fitness industry, you need excellent general liability insurance, professional liability, worker’s compensation, and property coverage.

How much does this all cost? And why do gyms need such comprehensive insurance coverage? To learn why your business needs wellness and fitness insurance, read ahead.

What Gym Insurance Protects Against

The nature of being the owner of a gym or fitness center is that you have a high-risk business. Within your four walls, people are exerting themselves in high-intensity workouts and operating fitness equipment that can weigh up to 500 pounds, all while pushing themselves to exhaustion. This clearly constitutes high-risk

So what does gym insurance protect against, and where exactly does the cost of gym insurance accumulate?

  • Accidents – Basic protection needs to cover mishaps. Tripping downstairs, slipping in the shower, and other accidents are commonplace. Since it happens on your property, you’re responsible for any damage or injury that takes place.
  • Injuries – The injury rates are high in the fitness industry (when compared to other businesses); be sure to protect yourself against the array of injuries that can occur.
  • Worker’s Compensation – Injuries are not limited to the gym members. Personal trainers, class instructors, and other fitness professionals or employees are liable for injury and must be paid worker’s comp when unable to work.
  • Health Emergencies – Overdoing it on cardio equipment can induce cardiac arrhythmia or worse. Too much weight put on machines can lead to serious bodily harm. These health emergencies can include the cost of ambulances as well as the proceeding litigation and medical costs.
  • Litigation Costs – Court settlements, lawsuits, and defense teams can bankrupt businesses unless they have an insurance plan to cover the legal fees.
  • Medical Bills – Because the rate of injury is high for gyms, expect to pay medical bills in court settlements. Having an insurance plan prior to this can avoid seriously harming your business.

Ultimately, gym insurance protects against bankruptcy. With more businesses being taken down by lawsuits than by debt, you need to ensure you pay the proper amount to be adequately covered. This begs the question: what factors affect the cost of fitness center and gym insurance coverage?

Factors Affecting Gym Insurance Costs

The amount you pay for your insurance policy directly corresponds to the basic factors of what your gym entails. That includes:

  • Size of the gym – A Planet Fitness operating for a community of 10,000 local members is going to operate differently than your local pop-up gym that has 500 recurring members. The amount of liability coverage needed grows exponentially with size.
  • Location – Similarly to the size of the gym, the location will also affect your policy costs. Operating in Manhattan, New York will cost more than Barberton, Ohio.
  • Number of employees – The more employees means more people that need to be covered under worker’s compensation insurance. However, this cost is offset by the sheer fact that the more employees you have around your gym, the fewer injuries are likely to happen. A balancing act this one is.
  • Services offered – What services your gym offers will significantly affect the type of insurance policy needed, thus the cost of gym insurance. Consider if you have any of these offered in your gym:
    • Boxing, martial arts, or combat sports
    • Massage therapy
    • Supplements, food, or drinks for sale
    • Personal trainers

Wherever your gym falls along these categories will decide how much you pay for your policy. To understand some specifics, let’s look at small gyms and medium-sized gyms.

The Average Cost of Protection for a Small to Medium-Sized Gym

Taking these factors into account, your gym is extremely vulnerable when it comes to the high cost of medical bills and litigation expenses. These are no small fees to contend with. That’s why the average cost of protection is in the thousands.

FitSmallBusiness found that the starting annual rates for insurance for gyms that are roughly 2,000 square feet have a single front desk operator, and at least $100,000 worth of gym equipment includes:

  • General Liabilities – Starting minimum: $1,500 – General liabilities cover basic accidents, injuries, and health emergencies for the gym. 
  • Property Coverage – Starting minimum: $1,000 – Covers damage, theft, and vandalism to the building. It also covers renovations, construction, and natural disasters when they occur.
  • Worker’s Compensation – Starting minimum: $950 – Covers employee’s loss of wages due to injury or death at the workplace.
  • Professional Liability – Starting minimum: ~$1000 (varies on size of business)  – Covers mistakes and wrongful acts made by your business that potentially could cause harm to a client or customer.

This brings the total minimum cost for small to medium-sized gyms to about $3,450. This is a good baseline to start to understand your specific business needs and your own risk aversion. Consider the factors listed above when considering how much you want to pay to stay covered.

Cost of Protection: Cost-Benefit Analysis

An important tool to understand gym insurance is a cost-benefit analysis. Remember that a single lawsuit with extensive medical bills can cost gyms enormous fees that they may not be able to cover without accruing debt. While paying annual fees in the thousands of dollars can seem like a large out-of-pocket expense to cover, the costs of not having insurance coverage when you need it can be detrimental.

Protect yourself, before someone in your gym wrecks themselves.

 

Sources:

CBS News. Study: Most bankruptcy due to lawsuits, not debt level. https://www.cbsnews.com/news/study-most-bankruptcy-due-to-lawsuits-not-debt-level/

FitSmallBusiness. Gym Insurance: Cost, Coverage & Providers. https://fitsmallbusiness.com/gym-insurance/

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