Did you know that the gym, health, and fitness club market is about $4 billion in Canada? This includes the number of new equipment and interesting ways to work.
From spin class to aerobics, the gym and health centers offer a multitude of ways to get fit. Unfortunately, these innovative ideas also have a multitude of ways for customers to get hurt.
If you’re a gym owner or even a golf course, you have to start thinking about sports and fitness insurance to protect your business from third-party claims. You can add all the disclaimers you want in your sports contract, but if there’s a malfunction, then you and your business will be on the hook for medical costs and legal fees.
If you’re thinking about getting sports and fitness insurance, you’ve come to the right place. Keep on reading for everything you want to know why sports and fitness insurance is so important.
Who Is Sports and Fitness Insurance For?
Let’s dig a little deeper into who sports and fitness insurance is for. Sports and fitness insurance is for any business that has customers who are working out. A traditional gym has the same risk as a new gym that focuses on Aerial Yoga.
Anytime you have customers that are dealing with specialized equipment including basic dumbbells, you should start considering sports and finance insurance.
Recreational and Private Sports Leagues
Canadians love playing sports. One in four Canadians participates in sports, with hockey at the top of the list. Some Canadians play regularly, while others play sporadically. The different sports each have a different set of risks.
Not only do you have to worry about sports equipment getting lost or damaged, but you can have third parties suing the league for injuries. If you have spectators coming to watch the competitions, then you can be dealing with a much broader set of claims like “slip and fall claims”. Luckily, sports and fitness insurance cover both recreational and private sports leagues.
Fitness Facilities (Soccer Fields, Tennis Courts, Gyms)
Any type of fitness facility can be covered under sports and fitness insurance. Gyms fall within the definition of fitness facilities. Whether it’s a small gym or a large gym, they face the same types of risks.
Gym equipment can cost a lot of money, so any theft or damage of that equipment can affect the bottom line of the business. You can also deal with a higher level of third-party liability than other businesses because of the complexity and setup of your gym.
Many health centers also have a spa as part of their business to appeal to more customers. After a hard workout, a spa treatment can feel heavenly. Specialized spa insurance can help protect you from liabilities and claims from third parties.
Instructors (Coaches, Trainers, Managers)
Anyone who spends time instructing and training has an additional level of responsibility and liability. They can get sued for malpractice or negligence. This is why instructors including coaches, trainers, and managers are all covered under sports and fitness insurance centers.
Golf Courses
Golf courses also qualify for sports and fitness insurance. Golf is said to have a higher risk of injury than rugby. With such a large expanse of grounds to maintain, you could even increase the chances of third-party claims of slips and falls.
Dance Instructors and Studios
Many customers are looking to find new and innovative ways to work out to keep themselves interested and stay fit at the same time. New studios are coming up regularly with incorporating new types of dances into a workout schedule. This includes twerk aerobics, Zumba, Dance revolution and several other options.
Dance instructors can also be dealing with professional liability for not providing proper instructions. For example, you could be in a situation where a customer complains about pain while performing a move and you don’t take any steps to help them. In this case, you could be held liable for any injuries that they sustain.
Pilates Studios, Pilates Instructors
Pilates studios and instructors are also covered under sports and fitness insurance. Pilates uses a system of exercises to improve physical strength, flexibility and posture. You may think there’s less chance of injury in Pilates, but you can end up with customers straining muscles or suing the instructors.
Martial Arts
Martial arts include many different fighting sports or skills. This includes kung fu, judo, karate and kendo. Martial arts can be armed or unarmed arts. Archery and fencing would fall into armed arts. Unarmed arts can include:
- Judo
- Sumo
- Karate
- Tae kwon do
- Aikido
- Tai chi
Many studios and instructors focus on separate martial arts. As with any instruction, they can deal with professional liability issues for failure to deliver a proper service. There can be an increased chance of injuries, especially with one-on-one combat. You can protect your martial arts studio with sports and fitness insurance.
Yoga Studios and Yoga Instructors
Yoga has a similar risk to Pilates including third-party claims for failure to perform. This is why yoga studios and yoga instructors are all covered under sports and fitness insurance.
What Does Sports and Fitness Insurance Cover?
Before you go any further, you need to know exactly what is covered under sports and fitness insurance. A sports and fitness insurance generally includes commercial general liability insurance. Commercial general liability protects you from third-party claims for bodily injury or property damage.
For example, a customer running on a treadmill that malfunctions can be injured. This injury can vary from a simple sprain to a fracture. The medical costs and legal fees will be covered under a commercial general liability.
Directors and Officers (D&O) Insurance
Sports and fitness insurance also include directors and officers (D&O) insurance. D&O insurance provides financial protection for directors and officers of your sports or fitness centre.
No matter how big your gym or fitness centre is, the directors and officers of your organization are responsible for the decisions made by the company. As such, they can be held liable for certain actions such as:
- Breach of fiduciary duties
- Negligence
- Wrongful dismissal claims
With D&O insurance, your directors and officers can focus on the operations of the business without worrying about being held personally liable for any allegations of wrongful acts that the business is held responsible for.
D&O insurance can cover legal costs, damages, court orders, tax contributions if the company is insolvent, and any fees or penalties incurred.
Professional Liability Insurance
Professional liability insurance covers damages that the business or individual may incur because of negligence, errors, or failure to deliver a service. This coverage is essential for sports and fitness instructors.
Instructors provide advice and hands-on training. They can end up in situations where the customer suffers injuries and sue them for not providing adequate instructions or training.
You can also get sued for negligence. For example, you could be in a situation where a customer explains that they have a pre-existing condition and then subsequently gets injured. If you didn’t pay attention or follow through on their explanation, you could get sued for negligence.
This is where professional liability insurance comes into play. It can cover your legal fees and any settlements. It can be on an Occurrence basis or Claims-made basis.
An Occurrence basis protects you from any incident that occurs during the term of your policy. You’ll be covered for any claims that took place during your term policy even if you eventually cancel the policy. The claims-made policy requires that the incident and claim take place in the same period when the policy is in force.
Sports Equipment Insurance
As a sports or fitness centre, your equipment is your business. You want to make sure that your equipment is covered from theft, damage or vandalism. Whether you own the equipment or lease it, you want to make sure your equipment is protected.
Cyber Liability Insurance
Cyber liability is an increasingly growing concern for most businesses that have online customers. It can protect your company from data breaches and other cyber security issues like ransomware.
Cyber liability doesn’t just apply to intellectual property. It can include your sales or tax data, client credit card information, health records and social security numbers. Cyber liability insurance can protect your company from the costs of data breaches including any ransoms you have to pay to get your data.
What Is Not Covered?
You should know that any injuries that your employees incur while working on the premises will not be covered under sports and fitness insurance. That’s usually covered under separate workers' compensation insurance.
You will also need separate business interruption insurance if you want coverage for your business if it's interrupted because of natural disasters. This coverage will cover you for any financial losses you may incur if your business isn't operating for a certain period.
What to Look for in a Company that Offers Sports and Fitness Insurance
There are limited insurance companies that specialize in sports and fitness insurance. The first thing you need to do is compare all your options. Your insurance company should be aware of all the risks that the sports and fitness industry faces, and also risks that are particular to your business.
With the right experience, you can get customized premiums that are right for your business. You want to make sure the premiums take into account the size of your business. If you are a smaller business, your premiums should provide full coverage but be affordable for you.
The premium increases should also be stable. You don’t want your premiums increasing significantly year after year, even if you don’t make any claims. Ask your insurance companies if they offer better rates if you haven’t made a single claim in previous years.
You should consider an insurance company that offers a bundle of products at a discount. Rather than paying for separate policies, you should pay one premium that covers everything you need.
You should look for the best customer service experience. You have options available to you, so your insurance company should go the extra mile for you. They should also be available 24/7 for emergency claims.
Typical Costs of Sports and Fitness Insurance
The typical cost of your policy depends on the type of services that you offer and the type of coverage you’re looking for. Your policy can cost you around $280 to $350 per year with a coverage of $2 million.
The specific amount depends on several facts including the size of your business. The larger your business, you can end up with third-party claims with higher damages. This means the insurance company will have to settle at higher amounts which can increase the premiums you pay.
If you’re a seasonal sports league, then that too will play a role in the amount of premiums you pay. You may be able to a lower rate if you’re only open for part of the year.
Where your business is located can lead to lower or higher premiums. If the area your business is located has a higher crime rate, you may be charged a higher premium because you would be at higher risk of theft or vandalism. If your area has a higher risk of natural disasters that could cause property damage, that will play a role in determining your premiums.
How to Save Money on Sports and Fitness Insurance
You can save money on sports and fitness insurance by shopping around. By comparing the rates offered by different companies, you can pick the premium that’s best for you.
You can also consider how much coverage you would like. By choosing the amount of coverage and deductibles you can save money on sports and fitness insurance.
The Takeaway
Sports and fitness insurance can protect you from third-party claims, equipment damage and professional liability claims. All fitness facilities and instructors should consider getting sports and fitness insurance to protect their business. Affordable coverage is available for all types of sports and fitness companies that are specifically tailored to your business. Our partners at APOLLO Insurance will provide you with the most comprehensive and customizable product on the market. Speak to a pro today.
