Insurance. Nobody likes it but everyone has to have it.
Speaking with many dance studio owners over the years, there is always a pain when it comes to buying insurance. From the new studio owner who has never purchased before to the veteran studio owner how has had insurance for years, everyone has the same concerns and questions. What does it cover? What do all the terms mean? How do I know what I need? How much insurance should I have? Are my recitals covered? What happens if someone gets hurt? How much does it cost? Am I paying too much?
Today, we will start with the basics. By understanding what the coverage is, you will be more informed and make better choices when it comes to you studio’s insurance policy.
Liability insurance is what protects you as a business owner should you be sued. If anyone comes into you studio, slips and falls and sues you, the liability policy will provide protection against that claim. Or if you are sued because you damage somebody else’s property, the liability policy will help pay the cost of defense and settle any claims up to the limits you purchase (each insurance policy is different, check with yours to see how coverage applies).
To be covered for claims arising from your studio participants (i.e. dancers), you must be covered for Participant Liability. Participant Liability refers to claims made by athletic participants and is commonly excluded from most general liability policies. Check with your agent to make sure that your policy covers you if a dancer sues the studio.
As most studio owners are aware, they need a Certificate of Liability Insurance before leasing studio space, teaching within a school district, renting a theater for their recital, participating in an event, and the list goes on. Without Liability Insurance, most places won’t let you use their space. Landlords, Venues, and School Districts all want you to have your own insurance because they don’t want to be liable for any claims arising from your operations, while you are operating on their premise. So by having your insurance, you will be covered for any claims that arise as you operate your studio.
Accident Insurance helps pay for medical bills of an injured participant. If one of your dancers gets hurt during class and has to go to the doctor, your accident policy can help pay for the medical bills up to the policy’s limits. Not all policies include an accident policy, so check with your agent to see if you have this coverage.
The accident policy is designed to help avoid lawsuits. Most of the time when people sue, it is because they can’t pay for their medical bills. So if your studio can help cover the expenses, the chances of being sued significantly decreases. Keep in mind that most accident policies are excess or secondary meaning that they pay after the injured participant’s personal health insurance policy pays. In other words, if a participant’s health insurance policy pays 80% of the medical bills, the accident policy can help pay the remaining 20% up to the coverage limits. Accident policy limits can range from $10,000 per claim to $100,000 per claim.
Equipment & Contents Insurance
Equipment Coverage protects your Owned or Leased Business Personal Property, Inventory, Tenant Improvements, Signs, Equipment, Computers, Furniture, and Other Related Business Property against Theft or Damages resulting from Accidents, Fire, Smoke, Water, Earthquake, Flood, Wind, and Transit/Shipping.
A lot of studio owners think that there property is included in the liability policy, especially when they read or see, ‘Property Damage Liability’ in their liability policy. But as a reminder, property damage liability only provides coverage for the damage you do to someone else’s property. Property Damage Liability does not cover any of the studio’s business property in the event of loss.
In order to be covered for the studio’s contents & equipment, such as dance floors, mirrors, costumes, sound system, etc., you would need to either add this on to your liability policy or take out a separate property policy covering the contents and equipment. This coverage helps pay for damages to the equipment you own. If you aren’t sure if you are covered, contact your agent.
Also, check your lease agreement to see what the responsibilities are of the landlord if there was a fire in the building and your studio was damaged. Most leases require that the tenant (this would be the studio) be responsible for insuring all contents equipment, improvements, and betterments within the space they rent. This is because if the building were to burn down, the landlord is typically only responsible to fix the space as it was rented to you. Landlords usually don’t cover any of the studio’s contents. So if your dance floor was damaged in fire, would you be able to fix it yourself or do you have a policy in place to cover the damage? With an equipment & contents insurance policy, you would be able to submit a claim for the damaged floor, pay a small deductible, and then the policy would cover the rest (up to the covered limits)
Learn more at http://www.dancestudioinsurance.com/