Business Insurance for Yoga Studios

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Business insurance is designed to protect a business owner's financial assets and is an essential investment for a yoga studio.

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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.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A YOGA STUDIO

Example 1: During a yoga class, a student is injured by a teacher looking to “enhance” the student’s range of motion. The student is seeking compensation for medical bills and lost wages for time out of work. Your general liability policy should cover all expenses and damages.

Example 2: In a teacher-assisted forearm stand, a student loses balance and breaks a mirror on the adjacent wall. Your general liability policy should provide coverage for the student’s injuries and any resulting legal costs

Example 3: A student complains of unlawful use of their picture when a class photo is posted online. A general liability policy can provide protection from the resulting lawsuit.

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

On average, yoga studios in America spend 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 yoga studios 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 yoga studios should obtain:

Professional Liability Insurance

Yoga studios have students of varying skill levels attending classes. Unfortunately, students are sometimes injured, citing poor instruction or posture correction. A professional liability policy, also known as errors and omissions insurance, covers negligence claims brought on by human error and/or a misunderstanding.

Workers’ Compensation Insurance

Workers’ compensation insurance is legally required by most states for any company that has full-time or part-time employees. It covers employees if they suffer an injury while on the job. In addition to medical bills, it also offers protection for lost wages, lawsuit costs, and any resulting settlements.

Workers’ compensation is purchased as a standalone policy.

Commercial Property Insurance

Yoga studio business owners who own the real estate they operate out of should consider purchasing commercial property insurance. In the event of a loss, the policy should cover the cost of repairing the building, as well as the replacement of all business property and products.

Commercial property insurance is generally purchased as part of a business owner’s policy (BOP).

Types of Coverage Some yoga studios May Need

In addition to the policies outlined above, there are a few other types of coverage your yoga studio 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.

Business Interruption Insurance

Most business owners count on their monthly revenue to pay both business and personal expenses. If the business is forced to shut down for an extended period of time, the financial impact could be devastating. Business interruption insurance helps lessen that burden, making up some of the lost revenue.

This type of insurance is typically available as part of a BOP.

Commercial Umbrella Liability Insurance

While a general liability policy offers significant coverage, some lawsuits could result in payouts that exceed primary policy limits. A commercial umbrella liability policy should be considered, as it adds an extra layer of protection.

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.

Frequently Asked Questions

What is included in a business owner’s policy?

A typical business owner's policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company's needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it's best to be proactive when it comes to protecting your assets. After all, you can't buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.