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By Jennifer Urmston Lowe, National Account Manager, Sports & Fitness Insurance
It seems we're always seeing news headlines of child molestations, guest instructor negligence, and even murder in the martial arts. Though each incident carries potentially millions of dollars in liability, in many cases, the owner was not present when the incident happened yet he or she could lose everything personally and professionally without solid insurance coverage.
What Kind of Martial Arts School Insurance Coverage Do I Need?
What kind of insurance you'll need will depend on what you do. If you have a children's based school with little no contact, you requirements would significantly different than an MMA school with a cage and lots of sparring.
A good place to start is understanding the different claims you can be liable for. The first distinction is whether the claim is personal or property related. It is critical that Martial Arts School owners protect themselves with appropriate and sufficient insurance.
Liability claims can come from injuries to students or sexual assault and abuse claims made by minors and adult students alike.
Property claims can come from fire or lightning or a car driving through the glass front of a martial arts school. All of these claims and more can lead to lawsuits or repair bills that can destroy a business.
General Liability Insurance (Must Have!)
All Martial Arts Schools should carry General Liability insurance that includes Professional Liability coverage to protect themselves from claims including lawsuits.
Premises Liability Claims range from simple slip and fall injuries to minor or more severe injuries. All martial arts schools have premises exposures related to students and guests coming into their owned or leased space. This includes walking through the parking lot, over the sidewalk, across the threshold, into the dojo, as well as, participation in classes, belt testing, and competitions.
Professional Liability Coverage protects the owners and employees of the martial arts school from claims related to the instruction that they do or do not provide to their students or guests.
Products And Completed Operations coverage protects the school from claims related to items that they sell.
Personal and Advertising Injury coverage protects the school from claims related to use of trademarked or personal information or photos in verbal, print or electronic media.
Sexual Abuse and Molestation coverage protects a martial school from losses related to physical and verbal acts of abuse and can be claimed by minors and adults alike.
Hired and NonOwned Auto coverage provides coverage for the school when an employee uses a personal or hired vehicle in the course of the school’s operation.
Standard Liability Insurance Limits
Standard liability limits for martial arts schools in today’s world are one of the following: $1,000,000 per occurrence (single claim) and either $2,000,000 or $3,000,000 annual aggregate (total of all claims in a given year) or $2,000,000 per occurrence and $4,000,000 aggregate. Higher limits are available through purchasing an Umbrella or Excess Liability policy.
When a school leases their space, the landlord typically requires a certain liability limit per occurrence that the tenant must meet or negotiate. The lease generally determined the liability limit of coverage selected. The individual assets of the martial school and owner(s) should also be considered when selecting sufficient liability limits.
Martial Arts Schools Need Property Insurance
Nearly all martial arts schools have some equipment and other contents that need to be insured under a Commercial Property insurance policy.
When you are renting, any tenant’s improvements such as HVAC, mirrors, glass and sign coverage are typically insured by the tenant and should be included in the school’s Commercial Property policy’s limits as well.
Coverage for Loss of Income, also called Business Income replaces lost income when a school suffers a covered property loss and has to be fully or partially closed during the period of restoration.
It is common practice for a leased school to purchase three to four months of business income coverage.
Workers Compensation Insurance
Any martial arts school with regularly employed full-time or part-time staff will also be required to carry Worker’s Compensation Insurance in most states. Annual payroll is used to calculate Workers Comp premiums.
A business can be fined by the State for not carrying mandatory workers compensation insurance. Worker’s compensation pays medical bills and lost work time for employees and contractors injured on the job and is important protection for all martial arts schools with staff other than the owner(s). Owners and officers are not required to pay workers comp premiums on their own payroll in most states.
Individual Martial Arts and Self Defense Instructors
Martial Arts and Self Defense Instructors teaching seminars and classes can purchase individual Professional Liability policies that cover them if they work as independent contractors in other people’s schools or facilities.
Individual Instructors should request the same liability limits as the facility where they are working.
A Martial Arts school should require all of their independent contractors to show proof of this coverage before allowing the contractor to work inside their facility.
Direct employees are covered under the facility’s General Liability policy for their professional liability exposure but independent contractors are usually not covered.
What To Do Right Now
Review your insurance exposures and coverage each year and never let the school’s insurance lapse. It is also very important to work with an insurance provider who has an understanding of martial arts, as well as, the specific operation and needs of a school.
Sports and Fitness Insurance Corporation is the Official Insurance Provider for the Martial Arts Teachers’ Association.
SportsFitness.com or 888-844-0536