Now that your Pilates business is up and running, it is time to turn your attention to the strategies that can help protect your business from the cost of litigation. One of these strategies is purchasing liability insurance coversfor your business.
While these policies will not protect you from being sued, the can help offset the costs that come with a lawsuit – the cost of hiring an attorney, court fees, the cost to investigate the case and so on.
Typically, a Pilates liability policy will cost between $500 to $1,000 a year to cover one full-time instructor. As your business grows and you hire more instructors, your premium will increase. Why? The more instructors you have teaching, the higher the chance of an unhappy customer and a potential lawsuit.
There are a few factors which play a role in determining your premium. Wehave already mentioned one of these factorsabove, around the number of instructors. Others include:
- your industry
- business location,
- policy limits
Based on these factors, and which ones each particular insurance carrier takes more into account, your premium will be different with each one.
What couldMy Pilates Liability Policy Cost and Why?
Types of Liability Policies
There are two essential liability policies that you should consider purchasing to protect your business. A commercial General Liability insurance (CGL) policy and a Professional Liability insurance policy.
Professional Liability insurance is critical to protecting your business from the cost of a lawsuit that results from any professional instruction or advice that you give, which results in a client injury.
A General Liability policy is important as well to protect yourself from general claims for bodily injury or property damage that result from your Pilates business, this could be the result of an equipment malfunction or even a client tripping over in your studio.
|Policy Type||What Policy Covers|
|Commercial General Liability (CGL) Insurance||Medical payments and legal costs that arise due to bodily injury or property damage sustained due to your negligence.
E.g. Client slipping on wet floor, falling and sustaining an injury
|.Professional Liability Insurance (aka Errors & Omissions)||Medical payments and legal costs that arise from bodily injury or property damage incurred due to your alleged negligence, mistakes or errors that result from your professional advice or instruction.
E.g. Failure to correct a client’s form during exercise and as a result they suffer an injury
How Do Liability Limits Impact Rates?
Both General and Professional Liability policies have a maximum limit up to which they will cover your claims. The higher your limits – the higher the premium, although the increases are not directly proportional to each other (i.e., going from $1M limit to $2M will not double your premium).
Liability limits typically start from $1,000,000 per occurrence and can be increased to $2M, $3M and so on. “Per occurrence” simply means that this is the most the insurance company will pay for one single claim. If you see a “per aggregate” wording, it means this is the maximum amount the company will pay for all claims combined.
So how do you determine what liability limits you need to purchase?
- Consider your contractual requirements. Often if you lease a space for your studio or operate within a fitness center, the landlord/ fitness center will specify the minimum insurance limits they require. Many require a minimum amount of liability limits from all the providers that teach at their facilities
- Consider the common injuries in your industry. As we all know, healthcare costs consistently go up and never decrease. For example, a back-injury claim that leads to multiple surgeries and physical therapy can amount to over $500,000. If your liability limit was only $500,000, you would have to come up with the difference on your own.
- Reach out to an experienced insurance agency.-An agency will advise you on the latest happenings in the industry, provide multiple quotes and can answer all your questions.
Higher liability limits may be costlierupfront but can save you thousands of dollars in the long run.
How Does Your Industry Impact Your Cost?
Insurance claims happen no matter what industry you are in. However, some industries are inherently riskier than others. For example, if an IT professional makes a mistake, he may cause a few hundred thousand dollars in damages. However, if an architect makes a mistake and the building they designed collapses – it could result in millions of dollars’ in damages including people’s lives. Your insurance rate, and thus the final premium is directly impacted by the industry you are in.
The most significant risk for a Pilates business is the type injury a customer may sustain.
How Do I Save On Liability Insurance?
If your Pilates business hasn’t had any previous claims history or past litigation, you will most likely receive lower insurance rates right from the start of the coverage. Of course, you’re going to want to keep things that way!
Below are a few tips to help you save on your liability insurance premiums.
If you only get one quote, you may be leaving money and better terms on the table. Contact a few insurance carriers for quotes so you can compare premiums and coverages. Remember, every insurance company will offer slightly different policies. Or just get instant quotes from BizInsure.
Pay your entire premium upfront
Usually, you can pay your premiums monthly, quarterly or annually. If you can afford to pay the whole premium upfront, you will avoid paying processing fees and may receive a slight discount for paying in full.
Be proactive about managing your risks
Creating a risk management plan will not only get you the best rate the underwriter can give you, but most importantly, will save you thousands of dollars in the long run by potentially preventing a lawsuit.
The risk management plan should include such items as a training program for all employees, pre-screening checklist and waiver to sign for new clients, posted warning signs and instructions for all apparatuses such as wall units, reformers, stability chairs, etc.
Now that your Pilates dream is finally a reality, it’s imperative to protect your business.
Liability insurance is the best way to do so. An insurance policy will help you get back on your feet following a claim, so you can do what you do best – teaching your students and running your business.