Everything You Need To Know About Jiu-Jitsu Gym Insurance

A detailed rundown of the 12 insurance policies a Jiu-Jitsu gym can choose from, what your gym actually needs (vs. what’s just nice to have), and how much it’ll all cost.

Responsible gym owners know that they need “insurance”. But while most of us know we need a separate auto and home policy in our personal lives, when it comes to our Jiu-Jitsu gyms, we have no idea what we need, what the policies offered to gyms actually cover, or how much they cost.

Summary

Must Have Insurance Policies:

  1. Martial Arts Policy:
    For Injuries to students.

    Which includes both:

    • General Liability Coverage
    • Accident Medical Coverage

  2. Professional Liability Policy:
    For errors in instruction.

Optional, But Recommended Policies:

  1. Commercial Property Policy:
    If you own your property or landlord requires it.

  2. Worker’s Compensation Policy:
    If you have employees, not just contract instructors.

  3. Commercial Umbrella Policy:
    If your personal net-worth exceeds about $1,000,000.

How Much Will It Cost:

  • Small Gym with Basic Coverage:
    $600 – $1,000 /yr.
  • Large Gym with Comprehensive:
    $3,000 – $6,000 /yr.

Fear not, we’ll get you all squared away.

In this article we’ll dive into each of the 12 types of insurance policies a Jiu-Jitsu gym owner can buy and tell you what each policy covers. Then we’ll break it all down via expert advice from two top insurance agents, who’ll tell you what to look for in the fine print, what you actually need (vs. what’s just nice to have), and how much it’ll all cost.

Types of Insurance for Jiu-Jitsu Gyms:

Insurance for a Jiu-Jitsu gym is really confusing because there are so many options (there are literally 12 different types of gym insurance coverages you can buy).

It’s so confusing, in fact, that insurance companies have tried to make it simpler by coming up with “all-in-one” packages for gyms. 

So our first of the 12 insurance policies gyms are offered is an “all-in-one” package, commonly referred to as “Martial Arts Insurance”.

1. Martial Arts Insurance (AKA Jiu-Jitsu Insurance)

In their package deals for gyms, most insurance companies bundle the two most popular policies: Liability Insurance, and Medical Accident and call the bundle Martial Arts Insurance (alternatively, it’s also sometimes called ‘Jiu-Jitsu Insurance’, ‘MMA Insurance’, ‘Business Owners Policy’ or BOP). Here’s what you need to know about the two policies that traditionally make up the the bundle that is Martial Arts Insurance coverage:

General Liability

General Liability Insurance covers your gym, owners, and employees for most incidents where bodily injury or property damage occurs in the normal course of business operations, including where your gym’s supposed negligence caused the injury. And this coverage typically pays for the costs of an attorney to defend your gym in a lawsuit related to the injury. Typically, these policies carry a $1,000,000 coverage limit.

For example, did a gym member slip and fall on a wet floor and get injured? If so, that’s where a General Liability policy comes in.

Questions To Ask:

  • What Types of Liabilities Are Covered?
    A General Liability policy almost always includes protection against slip and fall lawsuits (aka premises liability) and liability for breaking contracts. But some also include advertising coverage (e.g. lawsuits for slander, libel, misappropriation or copyright infringement), or other add on protections.

  • What Gym Space Is Actually Covered?
    If a member injures themselves in the parking lot, is that covered? What about temporary areas where you instruct (like at a competition)? Policies differ here significantly.

  • What Does My Lease Require?
    A General Liability policy is often required in your gym’s lease. Read your lease for policy limit minimums, and make sure you have enough coverage to meet your lease requirements.

Accidental Medical Coverage

The second part of most “martial arts insurance” bundles, Accidental Medical Coverage, (also sometimes called ‘Medical Expense Benefit’) pays the medical bills if one of your members is hurt at the gym, regardless of who is at fault.

What’s nice about this policy is that no finding of fault is required in order to pay out. The downside, is that the limits are typically very low, $50,000 to $100,000 per incident. Despite that, Accidental Medical Coverage can be a nice perk for an injured member, and good PR for your gym to help someone recover, and have the gym be a positive part of their recovery.

Questions To Ask:

  • Are There Any Requirements For Payout?
    Look for any requirements to meet this policy. Even though it’s a ‘no fault’ policy, that doesn’t mean that the insurance company is going to write a check with no documentation. Often you’ll need to document the incident, and fulfill other requirements for the member to get reimbursed. Make sure to train your staff accordingly.

  • When Does The Policy Pay Out?
    Will this policy pay out to cover an injured member’s deductibles, or only after the member’s personal medical insurance is exhausted (called “Excess Coverage”)? That’s a significant difference.

While almost “Martial Arts Insurance” or BOP packages include the two coverages above, two other popular insurance policies are sometimes included: Commercial Property, and Business Interruption Insurance.

2. Commercial Property Insurance

This policy covers against losses to your business’ physical property (e.g. broken windows, water damage, etc.) that occur because of certain covered events. For example, if your gym catches fire, or is vandalized, your commercial property will pay to fix the damage.

This coverage is obviously really important to have if you own your property, and completely irrelevant if you don’t (unless your landlord requires it).

Questions to Ask:

  • Is This An Open Peril Or Named Peril Policy? 
    Commercial property insurance is offered in two types: open peril, which covers all types of harm to your property, or named peril, which covers only those risks specifically listed in your policy (typically fire, wind damage, vandalism, smoke damage, etc.). You’ll pay extra for open peril, but if important types of harm aren’t covered under the named risk policy (flooding or black mold are commonly excluded), it’s worth considering.

  • Do The Policy Limits Meet My Lease Requirements?
    If you lease rather than own your gym space, in the lease your landlord may require you to carry commercial property insurance or Tenant Insurance with a certain policy limit, and then name the landlord as a beneficiary on the Commercial Property policy. Make sure your policy meets those limits.

3. Business Interruption Insurance

Business Interruption insurance is sometimes included in “martial arts insurance” packages, but if not, it is usually offered as a separate policy or optional add-on. If your gym suffers a serious fire or a water line busts, you may be out of business for weeks or even months on end. That means the gym is generating no income to pay the rent, employee salaries, or your own salary. Business interruption insurance covers the loss of income that your business suffers, and may also cover added expenses such as the cost of renting out a temporary location while your gym is renovated.

Questions to Ask:

  • What Documentation Is Required To Get Paid On A Claim?
    Insurance companies don’t write checks based on your word alone. Rather, these Business Interruption policies usually pay out based on documented past expenses of the business. So you need to have quality bookkeeping in place that documents all your expenses to take advantage of this policy, otherwise you’re just wasting your money.
  • What Related Costs Are Covered?
    Some Business Interruption policies also cover temporary added costs like having to hire security to protect your damaged building, or the cost of moving to a new temporary location. Know what’s covered and what isn’t because these related costs can add up.

4. Professional Liability Insurance

Professional Liability (also called Errors & Omissions insurance) protects you from claims related to you or your staff’s instruction (or lack thereof). For example, a staff member teaching improper form that leads to a serious injury would be covered, or if someone was hurt or suffered a financial loss because you or your staff made mistakes, omissions or were otherwise negligent in their training or business administration.

Questions To Ask:

  • Who Is Covered?
    Policies differ in who they cover, ranging from just owners, to owners and employees, to owners, employees and independent contractor instructors. If your instructors are paid as independent contractors, as opposed to as employees, you need to make sure their instruction is covered under the policy. Because if someone gets hurt due to their instruction, ultimately, the gym is going to be the target of a lawsuit, so you want to know that your insurance policy is going to kick in.
  • What Are The Policy Limits?
    These policies have per incident limits (meaning the maximum that the insurance company will pay out in a case), which are typically between $500,000 to $4,000,000. Make sure you have enough coverage that you feel protected in the event of a serious injury.
  • Who Has Control In The Event Of A Lawsuit?
    In a professional liability lawsuit, typically, the insurance company pays for your attorney and legal expenses. That can create a weird conflict of interest wherein your attorney seems to care more about what the insurance company wants vs. you, the gym owner. That’s important when it comes to the decision of whether or not to settle. Some policies give the insurance company the right to settle without your consent (called “The Hammer Clause”), so if not settling (or not settling) matters to you, watch out for that.

5. Equipment Breakdown Insurance

This policy kicks in to pay for repairs or replacement when covered equipment breaks down. For example, if you own a factory, and your expensive equipment breaks down, you might need this policy to prevent a prolonged shutdown. Fortunately, most Jiu-Jitsu gyms aren’t in the position of owning expensive exercise equipment, so many forego this policy.

Questions To Ask:

  • Ask Yourself, Is Equipment Breakdown A Real Threat?
    If the most expensive equipment in your gym is the heat / air conditioning system (which the landlord is probably on the hook for anyway) consider skipping on this.

  • What Are The Deductibles And Maintenance Documentation Requirements?
    If you do want this coverage, ask about high deductibles, or equipment maintenance documentation requirements. Because if you’re going to pay for the policy, you want it to actually pay out without hassle should you need to file a claim.

6. Business Personal Property Insurance

Just like a personal renters insurance policy protects the contents of an apartment, this policy covers all of the personal property in the gym, whether that’s your personal laptop, your members’ locker contents, etc. in the event of a theft, fire, or other covered loss.

Questions To Ask:

  • Ask Yourself, What’s The Cost / Benefit?
    Think about the real value of personal property that will be in the gym on a given day. For most Jiu-Jitsu gyms, the answer is probably at or under $5,000. Then subtract out any deductible. That’s your total potential payout from the insurance company. Whatever your number, compare that to the monthly cost of the policy to make sure this is actually worthwhile for your gym.
  • What’s The Per Item Maximum?
    The coverage limits for these policies are typically structured with a maximum per-item payout that is pretty low. So again, look at the ROI for your business.
  • Do You Have This Coverage In Another Policy?
    This coverage is often bundled in with other business policies as a freebie add-on. So make sure you don’t have this coverage embedded into another policy before buying a separate one.

7. Abuse or Molestation Insurance

Given the very physical nature of Jiu-Jitsu, that there are often showers on location, that instruction often involves minors, and that often instructors are running gym classes without owner supervision, accusations of sexual misconduct, whether credible or not, are a real risk for gyms. This coverage protects your gym for sexual misconduct claims levied against you, or your employees.

Questions To Ask:

  • What Types of Claims Are Covered?
    Are both claims based on physical and verbal misconduct covered? And what are the limits of the policy (around $1,000,000 is pretty typical).
  • Do I Have This Coverage In Another Policy?
    This coverage is often bundled with other business liability policies as an add-on, so check to see whether your other policies cover it before buying a separate policy.

8. Employee Dishonesty, Money & Securities Insurance

This policy covers your gym in the event that an employee embezzles or steals money. Unfortunately, employee based theft is the most common form of theft that small businesses suffer, and jiu-jitsu gyms that accept cash or paper checks for payments or gyms which don’t use secure credit card payment platforms are particularly vulnerable.

Questions To Ask:

  • What Are The Claim Qualification Requirements?
    What sorts of requirements are you supposed to have fulfilled, if any, to prevent theft, before the insurance company is willing to pay out? If these are too onerous or vague, this policy is almost worthless.
  • How High Is The Deductible?
    The chances of your Jiu-Jitsu gym being victimized for hundreds of thousands of dollars are exceedingly remote. So if your deductible is $10,000 and the average gym theft is $1,000 – $2,000, consider whether paying for coverage makes sense for you.
  • What Other Coverages Are Included?
    There are often additional coverages included as free add-ons for these policies, such as if you or an employee is the victim of identity theft.

9. Cyber Insurance

A Jiu-Jitsu gym often has current and past client’s contact, financial and health information. Unfortunately, that’s a wealth of personal data that hackers might like to have access to. If a breach occurs, and customers data is compromised you may face expensive reporting requirements and/or legal and liability costs. That’s where cyber coverage comes in.

Questions To Ask:

  • Is This First-Party or Third-Party Coverage?
    Cyber coverage is offered in two forms, first-party, which covers losses directly suffered by your business due to a data breach, and third-party, which covers you for losses by others such as your gym members. For most gyms, third-party liability is the big financial threat, so while you’ll pay more, explore that option.
  • What Are The Due Diligence Requirements?
    Often, for cyber coverage to actually kick in, you need to demonstrate that your gym took reasonable cyber security precautions. If those are too onerous or vague, you can bet you’ll be in for a fight if there’s ever a claim to file. So ask for the due diligence requirements and make sure they’re actually something your gym will follow, otherwise the coverage is useless.

10. Tournament Insurance

Typically, the insurance coverages provided by your Martial Arts Insurance package, that is, General Liability and Medical Accident coverage, don’t extend to tournaments or specialty events like clinics or summer camps. So if you want to be covered for those one-time events, you’ll need Tournament Insurance, also called Single Event Insurance.  Basically this just extends Medical Accident coverage, and General Liability coverage to these one-time events.

Questions To Ask:

  • What Are The Coverage Limits?
    Often the coverage limits for single events are significantly lower than your day-to-day coverage. You can typically raise it via an optional add-on, but at least be aware of the differences.

11. Workers' Compensation Insurance

Workers’ Compensation differs from almost every other form of insurance for your gym, in that it is required by law, and in that simply owning the policy offers you legal protections. Buying Worker’s Compensation insurance means the gym now carries insurance that covers employees medical expenses and lost wages in case they are injured in the course of their work. The employee, in turn, gives up their right to sue the gym for negligence for any injuries (called Part 1).

By law, if you’re going to have employees (not contractors) you must have a Worker’s Compensation policy. If you don’t have employees, however, you wouldn’t want or need this policy.

Questions To Ask:

  • Am I Required By Law To Have Workers Compensation Insurance?
    In most states, carrying Part 1 Worker’s Compensation insurance is required by law (Texas is the big exception).
  • Does My Policy Include Part 2 Coverage?
    In most states, only Part 1 (which protects the gym from lawsuits based on “negligence”) is required. Part 2, which protects you from claims of “gross negligence” is optional, and is often not included in policies. Talk to your insurance carrier about whether Part 2 coverage is needed in your specific state.

12. Commercial Umbrella Insurance

An umbrella policy is a sort of catch-all (thus the name “umbrella”) that will provide excess coverage for many of your gym’s existing policies, effectively raising the limits of all of those policies to the umbrella policies’ higher limit. That’s particularly important if you or your gym’s net-worth is in excess of the limits of your insurance policies (typically around $1,000,000). That’s because, if there’s a judgement or settlement against you that exceeds your insurance limits, you’d be required to pay for them from the gym’s (or potentially even your own) assets.

Additionally, in some cases an umbrella policy offers broader coverage than the underlying policies, effectively covering claims that are not covered by your existing insurance policies.

Questions To Ask:

  • What Underlying Policies Do I Need To Make The Umbrella Effective?
    An umbrella policy won’t provide coverage if you don’t have the underlying policy. For example, if you don’t have business liability insurance, the fact that you have an umbrella policy when you get sued is useless. So make sure you have all of the underlying policies you need, in order to make the umbrella effective.
  • What Does This Policy Exclude?
    Umbrella policies don’t stack onto all existing policies. For example, they commonly won’t provide excess coverage for commercial property or professional liability claims. You need to know what it does and doesn’t add to, in order to make sure you have sufficient coverage limits across the board.

Expert Recommendations: What Do You Actually Need

Now that you’re familiar with the major types of insurance policies that a Jiu-Jitsu gym might need, let’s get some expert opinions about what types of policies are considered “essential” and which are just “nice to have”, and give you an idea for how much these insurance policies will cost your gym.

To that end, we’ve asked two insurance agents, from different areas of the country, who offer a broad range of insurance policies suited for Jiu-Jitsu gyms, to offer their expert opinions.

What Policies Are Essential vs. 'Nice to have'

Phuc 'Froggy' Dang
Agency Yu
Houston, Texas

For any gym, the must haves are:

Martial Arts Insurance: This should include General Liability and Medical Accident coverage. This will protect the studio from legal claims, property damage, and bodily injury.

Property Insurance:  If your gym owns, rather than leases it’s space, Property Insurance is essential. This is coverage for the studio itself and its business property (bags, mats, gear, etc.) that could be damaged from fire, lightening, theft, vandalism, or other causes of loss.

Professional Liability:   Also called Errors & Omissions, this is coverage for the studio if they are deemed responsible for a financial loss to a client after injury.  

Optional, but recommended coverages are: Sexual Abuse, Commercial Umbrella, and Cyber Coverage.

What Policies Are Essential vs. 'Nice to have'

Shahla McIver
Farmers Insurance
Suwanee, Georgia

I would consider the following policies, essential:

Martial Arts Insurance:  We call this a Business Owner Policy (BOP) for Martial Arts Gyms. It is a package tailored specifically for martial art studios and gyms. The package includes: General Liability, Property Coverage, Medical Payment coverage, Personal Injury, Advertising Injury, Products Liability, and Completed Operation Liability.

Professional Liability: This covers trainers when the make errors of judgment. Professionals are trusted by their customers to know what they are doing, so when they make a mistake or are negligent, professional liability covers costs of damages and litigation.

Optional, but recommended coverages are:

Tournament Coverage: If you’re offering a youth program (e.g. summer camp for under 18 years old) or hosting a tournament on or off your location, you should have Tournament Coverage with Participant Liability Coverage, which protects you from injury to a student or tournament contestant.

Umbrella Liability: Some gyms likes to carry additional liability protection that goes beyond the standard coverage limits. It is very affordable and further reduces your exposure.

Workers Compensation: If you have employees, this can be considered essential. It is usually is a part of any business insurance package, and it covers any medical expenses employees that are injured while engaged in the ordinary aspects of their job.

Martial Arts Insurance Options: To your Martial Arts Insurance package, you can add optional coverages that suit your business’ needs. For instance, you may add Abuse or Molestation Coverage, Business Interruption, Business Personal Property coverage, Additional Buildings coverage, Employee Dishonesty, Electronic Data Protection, among many others.

What Should A BJJ Gym Expect To Pay For Insurance

Shahla McIver
Farmers Insurance
Suwanee, Georgia

Insurance coverage costs depend how many students your gym has, its square footage, and how much income your gym generates. At the extreme end, you can get rates as low as $550 per year for an small gym with one trainer, but a more realistic estimate for a mid-sized gym with reasonably comprehensive coverage is $2,500 to $3,000 per year.

What Should A BJJ Gym Expect To Pay For Insurance

Phuc 'Froggy' Dang
Agency Yu
Houston, Texas

Pricing ranges significantly based on the size of your gym. But assuming for a moment that you have $250,000 in annual sales, and that you want very comprehensive insurance, assume the rate to be north of $6,000 annually for Liability, Property, and a Commercial Umbrella policy.  If sales are below that, obviously, then the cost will go down (roughly at a rate of $15 per $1K in sales for liability insurance, for example).

In the example above, the bulk of that $6,000 annual insurance cost is from your gym’s liability policy, which should include errors & omissions and sexual abuse coverage.

Conclusion

For most Jiu-Jitsu gym owners, your gym is your single most valuable asset and the source of your most liability exposure. For those two reasons alone, digging into the details to understand your gym’s insurance options and weighing the costs during the startup phase, and well before any claims might occur, is well worth your time as a gym owner.

Disclaimer

This article is intended for informational purposes only. Neither SimpleGym LLC, its author, nor the insurance agents interviewed for this article offer, nor intend to offer, professional or legal advice. Consult with your insurance agent or attorney for individualized professional advice suited to your unique business’ needs.