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 ZUMBA STUDIO
Example 1: During a class, one of your instructors turns right when they should have turned left. This mistake leads to two class members accidentally crashing into one another. General liability insurance will likely cover any medical injuries that resulted from the collision.
Example 2: You want your Zumba studio to be a part of a national franchise so you can enjoy better name recognition. You will likely need a strong level of general liability coverage to qualify for franchise status.
Example 3: Your Zumba studio has a logo similar to another fitness business in an adjacent town. General liability insurance will typically cover any legal costs should the other company sue for trademark infringement.
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, Zumba studios in America spend between $400 - $1,100 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:
Several factors will determine the price of your policy. These include your:
- 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.
How much will the right insurance cost you?
See offers from our recommended professional liability insurance providerGet a Free Quote
Other Types Of Coverage Zumba 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 Zumba studios should obtain:
Commercial Property Insurance
If you own the space used for your Zumba studio, you’ll need commercial property insurance to protect it in case of damage from events such as major storms, vandalism, or criminal activity. If a fire burns the studio down, commercial property insurance will provide the means to rebuild it.
Business Interruption Insurance
This insurance provides you with an income in case you cannot operate your studio space for an extended period of time. If your building is under reconstruction due to a natural disaster, you’ll still have cash flow if you have this insurance.
Professional Liability Insurance
This insurance covers you in case an instructor provides misleading or incorrect information to your clients. Because Zumba studio instructors will give advice to people about how to move and position their bodies, your business may be held liable for injuries if this professional advice is found to be negligent or otherwise misleading.
Workers’ Compensation Insurance
If you have any part-time or full-time workers, this insurance is typically required to cover accidents and injuries sustained on the job. Workers are allowed to take advantage of this insurance for sudden events, such as a pulled muscle during class or chronic problems, such as severe shoulder pain from repetitive exercises.
Types Of Coverage Some Zumba Studios May Need
In addition to the policies outlined above, there are a few other types of coverage your Zumba 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.
Commercial Umbrella Liability Insurance
Umbrella insurance is an extension of general liability insurance that will cover the cost of claims the exceed your general liability limits. For example, if a client believes your Zumba studio caused their chronic back pain and wants full compensation for ongoing treatments, umbrella insurance will cover the costs past the limits of a general liability policy.
Product Liability Insurance
If you sell any products at your studio, product liability insurance protects you if one of the products is found to be defective. If the defect causes injury to the user, your product liability insurance will typically pay for the resulting legal expenses or medical costs.
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.