About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.


Learn more about the risks covered by general liability insurance.

Example 1: While participating in an aerobics class, two participants fail to maintain proper spacing and accidentally hit each other in the face. One participant now has a suspected broken nose, and the other suffered an eye injury. Both required medical attention. Your general liability insurance policy may cover the medical expenses associated with these injuries.

Example 2:  While participating in a cycling class, a member’s stationary bike malfunctions, causing the pedal to come off the bike. As a result, the member’s leg is deeply cut by the pedal bar, requiring immediate first aid and professional medical attention. Your general liability insurance policy may cover the resulting medical expenses as well as costs associated with any lawsuit that may arise from the incident.

Example 3:  While participating in a step class, a member gets overly ambitious and makes the step higher than they can physically handle. As a result, they fall off the step and injure their ankle. Your general liability insurance policy may cover the costs of having the injury treated.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost Of General Liability Insurance

The average boutique gym in America spends between $350-$750 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Other Types Of Coverage Boutique Gyms Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all boutique gyms should obtain:

 Cyber Liability

If you store personal and payment information online, then you need cyber liability insurance, which helps financially protect you against any lawsuits that arise from data breaches.

 Commercial Umbrella Insurance

If you anticipate claims might cost more than your primary commercial insurance policies, you’ll want to purchase commercial umbrella insurance. This type of policy helps pay claims that exceed your primary policy’s coverage limits.

 Workers’ Compensation Insurance

Workers’ compensation insurance helps pay for injuries that your employees might suffer while on the job. Most states require businesses with employees to carry this coverage.

Types Of Coverage Some Boutique Gyms May Need

In addition to the policies outlined above, there are a few other types of coverage your boutique gym may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

 Product Liability Insurance

If your boutique gym serves smoothies or shakes or sells products like gym equipment, clothing, and vitamin supplements, you’ll want to consider purchasing product liability insurance. This helps pay for any lawsuits that arise due to one of the products you sell injuring someone.

 Business Interruption Insurance

If your business encounters damage from an unforeseen event that makes it impossible to conduct your day-to-day activities, a business insurance policy may help pay for your lost profits while you aren’t operating.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.