While many gym owners focus on General Liability Gym Insurance, the most overlooked, and often most useful, policy is Property Insurance, commonly called Business Personal Property (BPP) insurance.
“Property claims are the number one most common claim for gyms,” Brian Aung, Head of Insurance at GymInsurance.com, told us over Zoom last week. “Most gyms, especially well-run ones, won’t have a liability claim from an accident or bad coaching,” he said. “But they have less control over the construction quality of the space they’re renting, their neighbors, and even less over major weather events.”
Brian explained that gym owners often rent easy access, high traffic locations, but they’ll make trade offs on the building quality itself. Commercial rentals in strip malls or warehouse areas are often older buildings, built to older safety codes, which can lead to a higher risk of fire. Gyms often also have close neighbors, sharing walls, which increases the fire risk if a blaze starts on the neighbor’s property and spreads. Claims for wind damage from storms are also common, especially for the lower-lying style of buildings that gyms often rent.
What does a BPP policy cover if you have to make a claim for a covered event? For starters, “we’ll cover the cost to replace any damaged gym equipment, including your mats, mirrors, computers, and anything else you bought for the space,” said Brian. “We’ll also cover your lost business income if you have to close temporarily while repairs are being done.”
“We’re not trying to deny your claim,” Brian clarified. “We’re an insurance company that actually wants to pay you for your loss.” But he said that they still have to honor the insurance contract. “If we ignored our contracts and paid out on events we don’t cover, then we wouldn’t be able to continue helping other gym owners with their insurance.”
Naturally, this creates a necessary tension between an insurance provider and a gym owner. “We try to be really clear on what your policy will cover and what it won’t,” he said. “But if you ever have any questions, we welcome your phone call or email. We want you to feel super comfortable knowing how your gym is protected by your insurance with us.”
We chatted with Brian for over an hour about gym insurance. Below is an edited version of our conversation.
Tara: What are some examples of property claims that GymInsurance.com has paid out to gym owners?
Brian: One example that sticks with me is a property claim we got in September last year. The gym had literally just opened, the weekend before. They had all these fun photos and videos of their gym opening event on their Facebook page - a food truck, it was family event. The father and son who owned the gym were so excited and proud. And then one of their neighbors had a fire overnight that spread to the back wall of their gym. One week after opening, and now they were dealing with this. Most of the damage actually came from their sprinkler system. The sprinklers stop the fire, but the water causes significant damage. The cost to replace everything was $30,000. We had an adjuster out at their gym within a day (on a Saturday, no less) and they had the check in their hand a few days later. Unfortunately, processing the payout is often the easiest part of a claim like this. They ended up having to find a new gym space and rebuild everything. They were finally able to reopen, but it took five months. They documented everything on their Facebook page. Even though they were upset, they were an incredibly positive family and they kept the community feeling going strong. And of course, most importantly, no one was hurt. Now they’re a really great small gym in their community. But if they hadn’t had property insurance, I doubt they would have been able to reopen and start over.
Tara: As you were describing this customer’s story, I was wondering how lucky they were to have had their insurance already active, having just opened! When is the right time for a gym owner to activate their property policy?
Brian: We recommend you buy your gym’s insurance the same day that you sign your lease and start moving property - your equipment, flooring, computers, etc - into the space. Because you never know. Their fire could have happened the week before they opened, when everything was ready, but not yet in use. If they had waited to activate the policy for their opening day, they wouldn’t have been covered if the fire had broken out sooner.
Tara: A lot of gym owners know they need to have general liability insurance, but what if they want to limit their insurance costs as they’re getting started and are thinking about skipping on a BPP policy?
Brian: One of the cool things about Property Insurance is that you have flexibility over the value you decide to cover. I definitely recommend going through our application at least twice and checking your quote for two different property values. (Pro Tip: You can either start a second application or use the back arrows to go back after you’ve seen your first quote. We recommend the second option.) Enter the total value the first time around, and then enter 50% or 75% of the value the second time and see what you think. You can decide if you want to save a little money now on your older equipment if you think it’s not worth insuring everything in the gym. It’s a little bit of a gamble, but in most cases, you’ll never use your insurance. It’s just there as a safety net if something happens.
Tara: What’s special about our property insurance vs. others?
Brian: There are two main points here that I want to make sure every gym owner knows.
First, check for coverage gaps. Many gym owners we work with came from insurance companies like AGuard or CrossFit RRG and were surprised to learn they didn’t have a property policy at all! For example, CrossFit RRG, as a Risk Retention Group, cannot legally sell property insurance. They have to refer you to a partner insurer, like Nexo. This means you might be running your gym for years without coverage you thought you had.
Second, is the coinsurance clause. For most property policies out there - including those from our competitors Nexo and AGuard - it’s common practice to include a coinsurance clause. This can cause massive frustration during a claim. It essentially means that the insurance company requires you to insure your property for a minimum percentage of its total replacement value. If you don’t meet this requirement, you get penalized when you file a claim and your payout is reduced.
Here’s an example showing the difference:
With a coinsurance clause, if you underinsure your gym’s equipment, other insurers will make you share the loss. In this example, the gym owner lost $10,000 of their claim simply because they didn’t insure enough to meet the 80% rule.
The insurers who use this clause claim they do it to keep costs lower, but get a quote from us and compare. Our prices are lower most of the time, and with GymInsurance.com, you get 100% of your insured value back. We cut out the complexity and ensure you receive the full protection you paid for.
Tara: You mentioned before that one of the most common complaints about insurance is when a claim is denied. What can a gym owner do to prevent their claim being denied?
Brian: That’s a really important question. We want to pay your claims because if we deny them, you might not be able to stay open, and we’d lose a customer. We want to keep you happy for the long term. But we have to honor the insurance contract, which means we can’t cover everything for the same price.
It’s a good idea to know the exclusions on your policy. Don’t be afraid to ask for more information, if you’re struggling to find or understand the exclusions on your property policy. Common ones are floods and earthquakes. These events are excluded because some natural disasters are too expensive for independent insurers like us, CrossFit RRG, AGuard, Next, Philly, etc to cover under a standard BPP policy. Otherwise our policy prices would be prohibitive for every gym owner. If you’re in a high-risk area for floods or earthquakes, you’ll have to purchase those coverages separately through state or other government funds.
We also can’t cover intentional or negligent losses. A property policy covers accidental, sudden, or unforeseen events. A perfect example is maintenance: If your gym’s roof springs a leak because your landlord hasn’t cleaned the leaves from your gutter in ten years, that is not a claim for your policy with us. That’s a claim you need to make against your landlord’s building policy, as it resulted from their long-term neglect.
Tara: If you had to give a new gym owner one final piece of advice about protecting their gym, what would it be?
Brian: Check your policy’s expiration date and set a calendar reminder for yourself for 2-4 weeks before that date. While you can cancel and switch your policy mid-year, we know gym owners have better things to focus on. When it’s time to renew, never accept the existing premium (especially if it’s gone up). Do yourself a favor and get at least 1-2 quotes before you buy your old policy again. And never assume your old policy will auto-renew. Some don’t, and if you miss the reminder email, the date might pass you by entirely.
Oh, and get an AED for your gym. Order it today. Having one at your gym, with staff trained in how to use it, is the number one thing you can do to ensure your gym members’ safety.
Thanks, Brian! We really appreciate your time. This is all great advice.
Gym owners - If you’re ready to check out our insurance and see how much we could save you for your gym liability + property bundle, you can get a quote for your gym in a few minutes here: https://go.gyminsurance.com/apply
Don't let high costs or inadequate coverage hold your gym back. Protect your business and your students with insurance built for you.