Frequently asked questions about insurance protection for your health club
What type of insurance do I need?
There are three basic types of insurance coverage that you will need as club owners. Liability insurance to protect you from litigation arising out of injuries sustained by members and guests while on your premises; property insurance to cover your building or tenant improvements, contents, and loss of income and workers' compensation insurance to cover injuries and lost wages sustained by your employees. The insurance application will help guide you through these various exposures and will allow us to offer a proposal outlining these coverage areas.
How much will insurance cost?
The price of your insurance will vary depending upon the types of exposures you have in your club (i.e. child care, tanning, pools, climbing walls, etc.). Property insurance rates also vary based on the type of construction that you club is located in and area of the country. The only way to determine the cost for your club is to go through the application process.
How long will it take to get a quote?
It can take up to 72 hours from the time we receive your application until we send the proposal. However, if the situation is a rush, please contact us at 800-985-2021 and we can prioritize your application and get your quote to you in the same day.
Is workers' compensation insurance included in the quote?
No, workers' compensation is its own separate insurance coverage issue. However, getting a quote is easy. There are only a handful of states where you will need to contact the State directly; they are Alaska, California, Hawaii, North Dakota, Ohio, Washington, West Virginia, and Wyoming. The premium is based on your annual payroll and workers' compensation policies are auditable. To receive a workers' compensation quote, please contact Nancy Primavera at 888-245-3509 or email firstname.lastname@example.org.
How do I know if I need a bond?
Most states do not require a bond. However, there are several states that do. The easiest and most effective way to find out if you need a bond is to contact your State Department of Consumer Affairs. They should be able to determine if a bond is needed based on your method of collection membership dues.
How do I determine how much liability coverage I need?
Markel's health club liability policy provides $1,000,000 per occurrence with a $3,000,000 policy aggregate. This meets or exceeds the industry standard for liability insurance protection. However, there are times when a client is required by a landlord or lending institution to purchase additional liability limits or a club owner may have a personal reason for choosing higher limits. We make no recommendations on how much is "enough" but can provide limits up to $10,000,000 if necessary.
How do I determine how much property coverage I need?
When determining the property insurance, it is important to look at what it would take to "replace" your building and/or tenant improvements, your equipment, furniture, inventory, stock, and computer systems in the event you had a total loss. Even though the possibility of losing everything is remote, the property insurance policy will have a coinsurance clause that requires you insure up to full replacement value. Many club owners who lease their premises are unaware that they may be responsible by lease contract with their landlord to replace all of the improvements and fixtures...regardless of who owns them.
What is business income coverage?
Business income coverage is an extremely important coverage you should consider as part of your overall property insurance protection. This coverage is designed to protect your loss of revenue and your ability to pay your ongoing expenses in the event of a major loss, resulting in your business being forced to close its doors for an extended period of time. It is important to ask the question, "how much money would I need each month to continue my normal operating expenses, and how much net income would I lose from new sales and suspended memberships?" Keep in mind that if you had a serious loss, it would take at least a month to clean up the mess, a month to pull your permits and line up contractors and then several months of rebuilding. It could conceivably take up to six months to get back in business. Calculating the proper amount of coverage can be very difficult. We recommend that you carry enough coverage for six months of your ongoing expenses and lost profits, but it is up to you to determine your own limit of protection. Your deductible will be 72 hours.
Are my trainers and instructors covered under this policy?
Yes, if they are employees; no if they are independent contractors.
- How do I get a certificate of insurance?
What is coinsurance?
Your property insurance will be written with a 90% coinsurance clause. The coinsurance clause is the insurance company's way of ensuring that you provide them with the correct replacement cost estimates for the property you are insuring. If you insure your property for less than the stated percentage of replacement value, you will likely be penalized in the event of a claim. For example: if you have a true replacement value of your property of $500,000 the insurance company will require that you insurance your property for a minimum of $450,000 ($500,000 X .90 = $450,000). The only time that this coinsurance clause is tested, is at the time of a claim. Let's say that you have $500,000 in equipment, furnishings, fixtures, etc. and you elect to save a little premium and only insure your "contents" for $225,000. Now let's say that you had a water pipe burst inside your facility over the weekend and when you open on Monday morning, you find that you have sustained $100,000 damage to your aerobics floor, treadmills, and juice bar. Since you have $225,000 in contents coverage, you may make the assumption that you have plenty of coverage to pay for this loss. Unfortunately, the claims adjuster determines, after a careful inventory of the total replacement value of all of your business property, that you have $500,000 worth of contents. Your coinsurance clause is triggered and the adjuster tells you that you should have been insured for $450,000 to comply with the 90% coinsurance and you only insured your contents for $225,000. Since you only insured for 1/2 of what you were "required" to insure for, the claim is also settled for 1/2 of what you normally would have received had you been in compliance with the coinsurance limit. In other words, instead of receiving a check for $100,000 you now will receive a settlement for $50,000.
The moral of the story: insure for your full replacement value and you will never have this problem.
- How do I file a claim?
Are there any membership age restrictions?
The insurance policy does not contain restrictions concerning the age of a member. If you plan to have minors (anyone under 18 years of age) working out at the club, let us know. Although we encourage today's youth to exercise, there are specific underwriting and safety issues that you need to consider.
When will I get my insurance policy?
You should receive your policy 30-45 days you have sent in your first payment. However, you can obtain a certificate of insurance at any time after you have sent in your first payment.