As any health club owner will tell you, gym insurance costs can vary widely depending on which company is issuing the insurance and which fitness center is being insured. The goal of this article is to help you learn how to manage health club insurance costs while still getting the coverage you need to protect the business.
When beginning the process of checking gym insurance rates and comparing prices, it’s important to keep in mind that it’s not just about getting low gym insurance quotes. The lowest price in the world still isn’t a good deal it you’re not covered adequately.
Rule #1 When Dealing With Health Club Insurance Companies:
The first rule when buying from health club insurance companies is to be honest with your agent. The importance of being completely honest with your insurance agent cannot be over-emphasized. Don’t fall into the trap of keeping secrets from your agent, thinking it will save you a few dollars. In reality, it could cost you your business!
Consider the example of Joe, who opened a gym in Anywhere, USA. When buying business insurance he decided to try to lower his premiums, so Joe told his agent that his equipment was only worth $15,000. Joe then ‘forgot’ to tell his agent about his tanning bed, because Joe’s friend had told him that tanning insurance was expensive.
Unfortunately for Joe, his gym burned down last week. He called his insurance agent, expecting enough money to buy new equipment and a new tanning bed. Guess what? Because he wasn’t honest with his agent about his insurance needs, Joe has a big problem. It’s called insurance fraud or dishonesty, and it will backfire every time.
So the first rule when getting health club insurance quotes is to be honest with your agent. They are part of your professional team, and they’re on your side.
Rule #2 When Dealing With Health Club Insurance Companies:
In the process of opening your own gym, you will find that you must assemble a quality team. You will need friends, a supportive spouse, and many others, as you become a small business owner. Some of the most important people on your team will be your professional advisors, which should include your attorney, accountant and insurance agent. Choose them carefully, because their advice can save you thousands of headaches and thousands of dollars!
That being said, the second rule when buying commercial insurance is to deal only with insurance companies you can trust. Check the insurance company ratings online or by telephone. All insurance brokers are not alike. As a matter of fact, some insurance brokers are crooks! Take the time to find one you trust.
Also, find an agent that will physically come to your gym. Why is this so important? Two reasons. First, an agent that will come to your gym for a tour is telling you that they care about customer service. They’re actually interested in your risk factors.
The second reason why you want an agent that will come to your gym is that they’ll actually find out about the concept. Many insurance agents, when you call for a quote, will ask you a few questions and then give you a quote. Some are even proud of this fast turnaround, calling it a ‘quickquote’. That’s the last thing you need. If the agent doesn’t come out to your gym, then they probably have the wrong impression of your facility and that will result in a bad policy.
As an example, your insurance agent needs to know that gym insurance average costs vary widely based upon the types of weights you have in the facility. If you’re strictly a hydraulic circuit-training health club, then your rate will be lower than if you had free weights available. Any fitness center insurance policy will also climb quickly if you add tanning to the list of amenities you offer your members. By getting an insurance agent to personally tour your facility, you’ll make sure that they’re writing for your own personalized risks. That will only make your insurance quote comparison more accurate.
So How Much Coverage Do You Need, Anyway?
It is not uncommon for a landlord to require you to hold $1 million to $2 million in liability insurance. If the lease agreement is well written, it will also require you to list the landlord as the co-insured. Failure to meet the insurance requirements set forth in the lease could mean disaster for your business should a claim occur. At the very least, the landlord will consider it a breach of the lease agreement and could terminate the lease without notice.
When soliciting bids for your insurance quote comparison, it is recommended that you discuss in-depth coverage in the following areas: General Aggregate, Products/Completed Operations Aggregate, Personal and Advertising Injury, Occurrence coverage or Claims Made Coverage, Fire Damage, Medical Expense (any one person), Tanning, Childcare, Property building and business personal property, Special Form coverage or Named Peril coverage, Discuss the coinsurance clause as respects property coverage, Business Income, Discuss deductibles as respects each loss and how deductibles effect overall premiums, Sign, Owned, non-owned and hired auto liability coverage.
Although many of these categories are considered ‘boilerplate’ and are included in all commercial insurance policies, some do require explanation.
Property insurance will pay for the contents of your building. It’s best to prepare a comprehensive list of everything the business owns and give it to your agent. If you have transferred ownership of some personal property to your corporation (examples: car, camera, television, stereo) then you need to be sure to include those on your list. During the incorporation phase of your organization you will also need to provide this list to your attorney and accountant, so it’s best to spend a little time and make sure you are 100% accurate.
Whether you provide a staffed child-care room at your location, or simply a play area, you need to communicate that to your agent as well.
Insurance to cover your tanning operation can be a lot less expensive than you think. Be sure to ask your agent about different ways to minimize the tanning premium. Some ideas include: Providing sanitary eye protection, providing a commercial tanning bed, making sure only staff can set the timer, hanging drug interaction posters in the tanning room, hanging liability disclaimers in the tanning room and having each member who chooses to tan sign a liability/release form.
Business income insurance is critical. If, for any reason, you are unable to open your gym then you are unable to make money. Even dedicated gym members will put a stop on their monthly draft if they can’t work out. You need business income insurance because there are any number of things that could force you to close your doors. Be sure to discuss this very important coverage.
Depending on how much you spend for your sign(s), you should consider additional sign insurance. The sign is typically not covered under the property umbrella, so you will need this extra coverage. For the gym that spends $6,000 on a sign, sign insurance is well worth the money…..especially when you consider that the sign is outside where neighborhood kids can use it for rock-throwing practice.
There really is no gym insurance average cost because personal preferences and lease requirements will be different for each fitness center location. Your individual health club insurance costs will be dependent upon several factors. Some of those are the specific rate of the building you are occupying, the geographical area that you are located in, and the specific insurance filings in place with your Department/Bureau of Insurance that has regulative authority in your geographical location. The more you become aware of your specific insurance needs the more you will be able to enter a contract of insurance that meets your needs and help you control your costs. So, as with all business decisions, do your homework.
