You have paid for your Pilates business with hours of sweat equity. Your dream of teaching the amazing benefits of Pilates movement is now a reality. The small Pilates business you’ve always wanted is up and running. Now is the time to protect your business with liability insurance. After investing so much already, buying liability insurance is really a minimal cost with a maximum benefit.
The pricing for liability insurance policies is influenced by various factors like industry, business size (in square footage and payroll), business location, policy limits and terms. So, the same policy for your Pilates business will have distinct pricing depending upon the insurance carriers who quote you.
In general terms, a typical Pilates liability insurance policy will cost between $500 and $1,000 per year. This is for one full-time instructor. The rule of thumb is to multiply the estimated premium amount by the number of full-time instructors. Your premium will certainly increase as your staff grows but that’s in relation to the increased exposure to litigation.
What Would My Pilates Liability Policy Cost and Why?
It’s normally recommended that a Pilates instructor purchase both general liability insurance, as well as professional liability insurance. The professional liability (E&O) insurance is important because you are a certified Pilates trainer offering professional instruction and advice to clients same as an accountant or real estate agent. Since you are visiting the homes of students, having them visit your home studio, and working on equipment in the gym, you will need a general liability policy too. It’s best to cover all your basis!
|Policy Type||What Policy Covers|
|Commercial General Liability (CGL) Insurance||Third party bodily injury, property damage, medical payments and legal costs from injuries sustained while working under your instruction or in your studio|
|Professional Liability Insurance (aka Errors & Omission)||First party bodily injury or property damage incurred while working under your supervision. Injuries or damages due to your mistakes, poor professional advice, or general negligence.|
How Does Your Industry Impact Your Cost?
Insurance premiums for a professional liability policy are usually calculated based on a number of factors including your business size (revenue and employees), location, amount of cover, claims history and your industry. When looking at your industry they will determine how high risk your industry is, as the riskier a business is the more likely it is to incur a civil lawsuit in the future. The insurance underwriter will take that into consideration when factoring your costs and they will also look at how costly a mistake in your profession can be.
For example, an IT consultant that makes a programming error during their client’s IT project may cost the customer $300,000 in damages. On the other hand, if an architect produces incorrect building blueprints, the building may be faulty causing millions of dollars in damages. This is why an architect may pay more for his/her liability policies than an IT consultant.
The highest risk for a Pilates business is typically the injury a student may sustain. Healthcare in the United State is not cheap, so the medical care required to treat a student’s injury can quickly add up.
How Do Liability Limits Impact Rates?
If you want a car or homeowner’s insurance that pays more for damages, you will usually have to pay more for the premium. This is the same concept for commercial insurance too. Higher coverage limits mean slightly higher premiums. In the long run, a bit more in premium can save your business millions of dollars down the road.
The most common general liability policy limits are $1 million occurrences / $2 million aggregate. This is how it breaks down:
- $1 million occurrence limit. The insurance company will pay up to $1 million to cover any single claim.
- $2 million aggregate limit. The combined total (aggregate) amount that the insurance company will pay for all claims during the policy term is $2 million.
Some small business owners like yourself choose liability limits based on the exposures within their respective industries. Other small business owners might select coverage amounts because a client contact specifies the amount needed to perform the work. In your case, perhaps a fitness center where you wish to teach Pilates mat class requires all independent instructors provide a Certificate of Insurance for $1,000,000. If you want to be able to work with that fitness facility, you will also need to buy a liability policy with a minimum $1,000,000 liability limit, and this may vary by facility.
You should also consider the dangers of being underinsured. You may select a $500,000 limit thinking that will more than cover any damages you can imagine. That may be true. However, you have to also consider that healthcare costs consistently go up and never decrease. For example, a back injury that leads to multiple back surgeries, physical therapy, medications, inpatient/outpatient medical care could creep past your $500,000 liability limit. If your liability policy doesn’t have enough coverage to pay for all the legal fees and damages, you will have to come up with the remaining funds on your own.
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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.
Be proactive about managing your risks
This is by far the most significant way to save yourself money and to avoid future lawsuits. Be sure to develop a risk management plan for your business. In fact, the insurance underwriter may ask for some information about the below items to determine if you are being proactive in avoiding litigation.
If you aren’t already doing these things, you may want to start!
- Design a training program for your employees. Keep the training program in writing for future reference. Be sure every new instructor receives the same exact training.
- Develop a pre-screening checklist and a waiver for your new clients. You want to review their health history and any medical concerns.
- Be sure your Pilates equipment is professionally installed, maintained, and routinely inspected.
- Put away portable equipment when not in use
- Keep Pilates equipment a good distance away from mirrors and windows
- Always post instructions and warning signs for all apparatuses like wall units, reformers, ladder barrels, and stability chairs
Check our Pilates instructor liability insurance page for more tips.
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Pay your entire premium up front
Usually, you can pay your premiums monthly, quarterly or annually. The best option is to pay the entire 12-month premium up-front. This way you may receive a discount for paying in full. Plus, you’ll avoid paying any finance fees that are applied when you pay for the insurance month-to-month.
Now that your Pilates dream is finally a reality, it’s very important to protect your business. Liability insurance is the best way to do so. Being a Pilates instructor means you may benefit from both a general liability policy and a professional (E&O) liability policy. As we discussed, the average annual cost of $500 to $1,000 for a liability insurance plan is minimal in comparison to the wide range of coverage and security it will provide. This basically means lots of financial resources will be available to you should a claim present itself. In addition to purchasing liability insurance, you can also minimize your exposure to risks without spending any cash. For example, store away unused Pilates equipment and post instructions on Pilates machines. Small, consistent steps such as these require no money and little time but can save your bottom line thousands of dollars in the long run. Any way you look at it, accidents can and do happen so planning for this possibility will only enhance your business model.