What is the difference between Studio Insurance and Professional Liability Insurance?
Studio Insurance (BOP) Overview
A Business Owner's Policy (BOP) generally provides three types of coverage for your business:
- Property insurance - covers buildings and contents owned or leased by your business. This can include the exercise equipment used in your studio.
Claim Example - Your studio sustains damage as a result of fire or from damage caused by tornado.
- General Liability protection - covers your business in the event it's found responsible for causing harm to a person and/or property, and helps to cover the cost of your defense.
Claim Example - Prior to a Pilates class beginning, a client slips and falls on a wet area by the entrance. The person sustains a back injury and requires medical attention. As a result of the fall, the person sues for reimbursement of their medical bills and other damages.
- Business Interruption insurance - covers the loss of income when your business is not operational due to unexpected damage or events so you can continue to meet your financial obligations such as rent and payroll.
Claim Example - Due to fire at your studio, you are unable to continue having classes for an extended period of time while repairs are made to the studio. You lose the revenue that would have been generated from classes.
Professional Liability Policy Overview
Professional Liability insurance can protect you from students who may move too quickly or push themselves too hard and slip and fall during instruction. It also may protect you if they make a claim and ask for financial reimbursement for injuries or loss of income they suffered as a result of your instruction.
Claim Example - You suggest a method or position to the student, which leads to an injury. The student claims you were negligent in providing the appropriate advice or guidance during class and that led to the injury.
Regardless of who is negligent, it can take years for litigation to be dismissed. While you may be exonerated from liability, your attorney's fees can be staggering. Professional Liability insurance helps relieve you from the financial burden of defending yourself in a lawsuit.
Portable coverage that protects you wherever you provide your instruction.
Most Professional Liability policies cover both the defense costs (e.g. attorney fees, court costs) and settlements or judgments. Intentional wrongdoing is typically not covered.
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