The Dos and Don’ts of Buying Insurance

The Ultimate Guide for Gym Business Owners

What do you need to keep in mind when you’re shopping around for business insurance? How do you know what the right insurance is? What coverage limits do you need to protect your business from the specific risks it faces?

In this guide, we work to answer your small business insurance questions. We cover how to get business insurance, the common types of business insurance, how to buy small business insurance (including the information you need), and pitfalls you can avoid in the process. If you’re feeling overwhelmed—start here.

1. Evaluate Your Risks

Do some research. Evaluating the risks your business faces helps give you direction when it comes time to choose the type of commercial insurance you need (and what insurance company to get it through).

  • What are some risks common to your specific industry? If you own a brick-and-mortar business you’ll face different risks than an online business.
  • What types of natural disasters could impact your business? If you live in Tornado Alley, you’ll need different insurance than someone in California who is prone to earthquakes.
  • Do you have employees or contractors working for you? You’ll need insurance to protect your employees
  • What types of lawsuits could your business be prone to? A doctor faces different risks than a manufacturer.
  • What might change as your business grows? Will you need higher limits or multiple policies?

Whatever your industry, take the time to write down the risks you face. A thorough risk assessment will help you determine the insurance policies you’ll need.

2. Shop Around For an Insurance Broker/Agent

Do comparison shopping and interview multiple agents with multiple insurance companies.
Alternatively, you can choose to work with an experienced insurance broker. Ask them for their recommendations regarding your specific business. They should be willing to submit these to you for no charge. Take notes and get a feel for their personality. Are they a good fit for you? As noted above, are they eager and willing to submit recommendations?

You also want to find an agent or broker with experience and clients in your particular business. For example, if you’re a tow truck company, find an agent or broker who has tow truck operators as insurance clients already. Ask for referrals and get a feel from them. The benefits of working with an insurance expert in your industry can move beyond saving money. Don’t make this decision quickly.

3. Shop Around and Get Multiple Insurance Quotes

Instead of initially searching for a licensed agent or a broker, you can shop insurance marketplaces to get quotes. A marketplace works with numerous partners, so you can get quotes from multiple insurance companies simultaneously. You can compare the quotes for small business insurance and choose the best fit for your business.

4. Don’t Always Buy the Cheapest Policy—Get the Coverage You Need

It can be tempting to shop around for the cheapest business insurance policy that you can get. We understand that you want the best deal possible. But sometimes buying the cheapest policy means you’ll lose the essential coverage that you need. Or a lower premium can mean higher deductibles or a lower policy limit. You need to make sure you get ample business coverage for the risks you face.

Conversely, a lower deductible may mean a higher premium. As a business owner, you have to carefully consider what your business can afford to pay for a deductible when choosing coverage options for your small business. One insurance company can offer policies very different from the next, so do your due diligence.

5. Gather Information and Purchase Insurance Coverage

Want to simplify and maximize your time and efforts in determining the proper coverage needed for your business? Save time by being prepared. This is a list of information and documents you want to have available when you meet with your insurance broker.

  1. Addresses: Copies of all leases and landlords, construction and building types square footage, any additional business location where employees may be contracted
  2. Vehicles and Types of Equipment: Make, model, and color; mileage and title(s), VINs, titles, and registrations to any trailers and road equipment, as well as an approved drivers list with driver’s licenses.
  3. The Owners, Officers, and Employees: Names, spouses and children, addresses, date of birth, and social security numbers
  4. Financial information: This can include bank records, cash flow/Profit and Loss statements, loan documents, present insurance declaration pages, attorney and CPA contact information.

Having this information ready and available is going to save you time and help your agent quickly get you quotes from an insurance company.

Bonus Tip: Read Your Business Insurance Policies

Make sure you read the fine print of any policy you have or are considering. Why? Because you want to make sure you don’t miss any exclusions that could negate the effectiveness of the policy. You also need to be closely aware of what your deductibles and OOP costs are so you aren’t ever surprised.

Common Types of Small Business Insurance

There are multiple types of insurance any small business should consider, depending on your industry and size.

General Liability Insurance

A general liability policy—sometimes referred to as business liability insurance—is a necessity for any business. A general liability policy protects you if you’re accused of:

  • Third-party bodily injury
  • Third-party property damage
  • Personal Injury/Advertising injury (libel, slander, copyright infringement)

If sued, your insurance company will provide you with an attorney, cover costs associated with lawsuits, and even pay settlements out to the impacted third party. This is the #1 insurance policy we recommend for everyone because the coverage is comprehensive and usually affordable. Plus, paying for bodily injuries can be costly without insurance coverage.

Product Liability Insurance

Product liability insurance protects small businesses from claims related to the sale of goods that may have caused physical injury or damage to someone’s property. Anyone who sells or manufactures food, medicine, and other products should consider this policy. Similar to general liability coverage, the insurance company can help cover legal fees, court costs, and settlements.

Professional Liability Insurance

Do you run a business where you coach or give professional advice? Are you a lawyer, doctor, or accountant? If you’re in an industry where your professional services or actions can be construed as negligence, you need to protect your assets with professional liability insurance. Also called errors and omissions insurance, professional liability offers protection for any professional mistakes you may make.

Commercial Property Insurance

If you own or lease a storefront, warehouse, or even house inventory in your home, you need commercial property insurance. Also referred to as business property insurance, this policy protects your building, business equipment, and inventory stored inside from common occurrences such as fires, storms, or theft.

Workers’ Compensation Insurance

Do you have employees? You’re legally required in most states to obtain workers’ compensation insurance to protect them. If an employee is injured at work, workers’ compensation pays a portion of their lost income until they’re able to return. Workers’ comp also covers their medical bills. It can also protect your business from being sued for the incident. In a competitive workforce workers’ compensation is absolutely necessary for you to hire and retain team members.

If you are the owner and operator and don’t have employees working for you, we recommend that you purchase health insurance and a life insurance policy. An insurance representative can help you determine your insurance needs.

Commercial Auto Insurance

Are you a trucker? Or perhaps you run a delivery service? Or just drive to business meetings with clients? In each of these instances, a personal auto policy won’t cut it. You need to protect your vehicle, yourself, and your passengers with commercial auto insurance.

commercial auto policy also protects you from being monetarily liable for property damage or injury to another person if you’re in a car accident. Your insurance company will help cover repair costs and medical bills for anyone impacted in an accident.

Business Owners’ Policy

Small business owners might be able to qualify for a business owners’ policy. A business owner’s policy is a bundle of common insurance coverages, often offered to small businesses at a lower price than purchasing each coverage separately. A BOP usually includes general liability, commercial property, and business interruption insurance.

Business interruption insurance offers financial protection if you’re unable to operate your business. It can temporarily cover lost revenue, employee payroll, taxes, and other operating expenses until you’re back up and running.

Business owners’ policies are a great way to help you save money on commercial insurance while still addressing your business needs.

Cyber Liability Insurance

Cyber liability insurance is recommended for any business that handles client information and stores it online. You’re automatically at risk of being hacked and their personal information being stolen. This policy can protect you from liability while offering your customers identity theft protection and credit monitoring.

Buying the right coverage is a lot more than just filling out and signing an application. Your business may need additional coverage not covered in this guide, but hopefully this guide can help you get started. Whatever you do, make sure you seek out expert advice.

Get a Free Quote for Business Insurance

If you need help walking through this process, we’ve got your back! Our goal is to help small and medium-sized businesses get quotes for insurance quickly and efficiently. Our industry experts can answer any questions you may have about how to get business insurance. We can connect you with different small business insurance companies to help you compare quotes. Simply give click here someone will help you get a customized quote for your business.

Click here for more details on financing options or call 214-629-7223 or email for more information. Or, apply now.

An Outsourced CEO and expert witness, Jim Thomas is the founder and president of Fitness Management USA Inc., a management consulting, turnaround, financing  and brokerage firm specializing in the gym and sports industry. With more than 25 years of experience owning, operating and managing clubs of all sizes, Thomas lectures and delivers seminars, webinars and workshops across the globe on the practical skills required to successfully overcome obscurity, improve sales, build teamwork and market fitness programs and products. Visit his Web site at: or

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