What Types of Insurance Do You Need To Run a Gym?

If you own and operate a gym, you need to purchase multiple types of liability insurance to account for the various kinds of harm gym members risk encountering as they work out at your facility. In addition, you need coverage that will insure your equipment and other property against multiple perils.

Read below to learn about the coverage types you may want to add to your gym insurance policy and how you can get the right coverage to keep your business safe.

Key Takeaways General liability insurance is important for gym owners due to the high risk of injury associated with exercise. Many businesses are required by law to purchase workers’ compensation and commercial auto insurance. Other coverage types that fitness professionals should consider include commercial property, business interruption, professional liability and equipment breakdown insurance. Monthly gym insurance prices can range from $75 to $286 depending on factors like your location, your coverage details and the size and scope of your company.

What Is Gym Insurance?

Gym insurance is a collection of commercial insurance types that address the risks gym owners face. Some carriers may offer insurance packages specifically tailored to the needs of gym owners, while others may individually sell all of the coverage types you need to create your own gym business insurance policy.

Exercise is the most common cause of sports-related injury, with 409,224 people in the United States getting injured due to exercise or exercise equipment in 2021.^[1] Whenever an injury in the fitness industry escalates into a liability lawsuit, the average price is $5,500.^[2]

As a result, gym owners need to maintain ample insurance coverage to avoid paying entirely out of pocket whenever one of their patrons gets injured.

Is My Gym Required To Carry Insurance?

Depending on your circumstances, you may be required by law to carry commercial auto insurance and workers’ compensation insurance. You will need a commercial policy to insure a vehicle that you use for business purposes and most states require commercial policies to have the same minimum limits as personal policies.^[3]

Meanwhile, if one of your employees gets injured on the job, workers’ compensation coverage can cover their hospital bills and other associated expenses. In general, businesses with multiple employees are required by law to buy workers’ compensation insurance in every state except for Texas, where the requirement only applies to businesses that contract with the government.^[4]

Otherwise, there are no coverage types specific to the fitness industry that you are required to purchase. Nevertheless, it is recommended that you purchase more coverage than is required by law in order to sufficiently protect yourself from common risks associated with running a gym.

What Type of Insurance Does a Gym Need?

Along with commercial auto and workers’ compensation insurance, the following coverages are among the most important types of insurance for a gym.

General Liability

General liability insurance covers medical expenses and property repairs if a visitor gets injured or their belongings get damaged at your gym. It could kick in if a member trips over a misplaced barbell and breaks their arm or if one of your employees drops a dumbbell on a member’s bag and breaks their cell phone.

This coverage type also takes care of legal expenses that arise from claims of bodily injury, property damage or personal and advertising injury. For example, general liability insurance could cover your legal defense if another company sues you for stealing their copyrighted logo and putting it on your gym’s website.

Commercial Property

If you buy commercial property insurance, then your gym and all of the contents your business owns and keeps inside of the gym will be insured against perils such as fire and theft. Many small and midsize business owners buy a business owners policy (BOP) that combines general liability and commercial property insurance.

Your BOP could also come with business interruption insurance. With this coverage type, your insurance company will make up for lost revenue, relocation costs and other expenses that arise if a covered peril temporarily prevents you from operating your fitness business.

Professional Liability

Professional liability insurance covers legal expenses if you are sued for making errors and omissions in the performance of your professional duties. Specifically, it covers claims related to mistakes like misrepresentation, negligence and breach of contract.

For example, if you sign a contract allowing an independent yoga instructor to use part of your gym to lead their class during a certain time slot each week and then accidentally double book by giving an independent personal trainer the same location at the same time, your professional liability insurance might take effect if either person sues you for failing to fulfill your contractual obligations.

Equipment Breakdown Insurance

Equipment breakdown insurance can pay to repair or replace your exercise machines if they suddenly stop working due to something like a short circuit or mechanical breakdown. While commercial property coverage already insures your equipment against external perils, equipment breakdown coverage is necessary to insure your equipment against internal failures. Note that this coverage type doesn’t pay to fix machines that have broken down due to wear and tear or poor maintenance.

Additional Insurance Gyms Should Consider

Your ideal gym liability insurance policy could also include coverage types such as these:

• Product liability insurance: Product liability insurance covers liability claims related to a defective product. For example, it might cover a settlement if a gym member sues you after they are injured by a malfunctioning treadmill.
• Cyber liability insurance: If you store your members’ personal information digitally, you need cyber insurance to protect your business from liability claims that stem from a data breach. For example, it could pay for your legal defense if a member sues you because they have been inundated with spam calls since their contact information leaked from your database.
• EPLI: Employment practices liability insurance (EPLI) covers lawsuits related to alleged violations of your employees’ rights such as wrongful termination, discrimination and harassment.
• Sexual misconduct liability insurance: General liability policies may exclude coverage for claims related to sexual harassment or assault.^[5] As a result, you may need extra coverage to insure your business in case a gym member accuses one of your employees of sexual misconduct or accuses you of negligently failing to prevent another member from harassing them.
• Inland marine insurance: Inland marine coverage insures business property while it is in transit. If you own multiple gyms, you may want this coverage type in case you need to transfer equipment from one location to another.
• Commercial crime insurance: Commercial crime insurance can reimburse you for losses related to criminal actions like fraud, employee dishonesty or theft of money and securities.

How Much Does Gym Insurance Cost?

The cost of liability insurance for a gym will vary based on factors like your claims history, the coverage limits you select, how many additional coverage types your policy includes, the services your gym offers, how valuable your equipment is, where your gym is located and how many employees you have.

For example, most fitness studio owners covered by NEXT Insurance pay between $133 and $195 per month for general liability, commercial property and workers’ compensation insurance. However, some customers could pay less than $75 per month for the same coverage, while others may have to pay more than $286 per month.^[6]

How Much Coverage Does My Gym Need?

The size of your gym business will influence the amount of coverage you need, with larger companies naturally needing higher coverage limits than smaller ones. The below table goes over the typical coverage limit ranges for common gym owner policies from NEXT Insurance.^[6]

Coverage Type	Per Occurrence Limit	Aggregate Limit
General Liability	$500,000 to $2 million	$1.5 million to $4 million
Workers’ Compensation	$100,000 to $1 million	$500,000 to $1 million
Commercial Property	No set range	No set range

The scope of your business will also determine what coverage types you need. For example, a national franchise with fitness centers all over the country is likely to benefit from inland marine insurance more than a small business owner with only one gym. However, the small business owner would need business interruption insurance more since the temporary closure of one location wouldn’t impact the large corporation as severely as it would the small business owner.

How To Get Insurance for Your Gym

You should request quotes from three to five separate insurance providers before settling on a gym insurance policy. Be prepared to share information such as your location, how many employees you have and how much money you make each year. That said, it can be tedious to individually contact multiple companies to provide them with your information.

To simplify the process, consider using an insurance marketplace like SmartFinancial. Once you fill out our questionnaire about your coverage needs and budget, we can get you in contact with a local insurance agent who can offer you an insurance policy that matches your requirements. To begin, simply enter your zip code below and we will assist you in obtaining a free commercial insurance quote.