Here's the dilemma every gym owner faces: you need insurance, but should you bundle it or buy it piecemeal? If you're running a fitness center, you've probably heard about Business Owner's Policies—those convenient insurance packages that combine multiple coverages. But are they actually the right choice for your gym, or would you be better off with separate policies?
The answer isn't one-size-fits-all. A boutique yoga studio has different needs than a 10,000-square-foot CrossFit facility with climbing walls and a pool. Let's break down when a BOP makes financial sense and when you should consider going the standalone route.
What's Actually in a BOP?
A Business Owner's Policy bundles two essential coverages into one package: general liability insurance and commercial property insurance. Think of it as the insurance industry's version of a combo meal—you get the core items you need at a better price than ordering them separately.
The general liability portion covers you when someone gets hurt on your premises—like a member who slips on a wet floor or drops a weight on their foot. It also protects you if you accidentally damage someone else's property. The property coverage protects your building (if you own it), your equipment, and your inventory against events like fire, theft, or vandalism. Most BOPs also include business interruption coverage, which replaces lost income if you have to temporarily close due to a covered event.
For fitness centers, typical BOP limits run around $1 million per occurrence and $2 million aggregate. The average cost? Between $1,000 and $3,000 annually, depending on your facility size, location, and what equipment you have. Compare that to buying general liability separately (averaging $825 per year for gyms) plus property coverage (which varies widely but can easily run $1,500-$4,000), and you can see the potential savings.
When a BOP Makes Perfect Sense
BOPs are designed for small to midsize businesses, and they work beautifully for many fitness operations. If you're running a boutique studio, a personal training facility, or a small gym, a BOP is probably your best bet. The eligibility sweet spot? Under 100 employees, less than $10 million in annual revenue, and property values below $15 million.
For specialized health club insurance programs, many carriers cap eligibility at $2 million in annual revenue per location—excluding initiation and sign-up fees. If you're within these parameters, a BOP offers the most bang for your buck. You get comprehensive coverage without juggling multiple policies, multiple renewal dates, or multiple insurance agents.
The administrative simplicity alone is worth something. One policy means one premium payment, one renewal date, one deductible structure to remember. When you file a claim that involves both liability and property damage—say, a fire that injures a member and destroys equipment—you're dealing with one insurer, not coordinating between two different companies.
The Hidden Limitations of BOPs
Here's what catches gym owners off guard: BOPs don't include everything you need. They specifically exclude workers' compensation, professional liability (important if you offer training or nutritional advice), commercial auto insurance, and cyber liability coverage. If you need any of these—and most gyms do need workers' comp at minimum—you're buying additional policies anyway.
The exclusions can also bite you in unexpected ways. Many BOP policies for fitness centers exclude incidents during unstaffed hours at 24-hour facilities, injuries involving children under 12, direct contact activities like boxing or martial arts, pool-related incidents, climbing wall accidents, and issues related to supplement sales. If these exclusions affect core parts of your business model, a BOP might leave you exposed where you least expect it.
Coverage limits pose another problem. Standard BOPs cap out around $1-2 million in property coverage and $2 million aggregate liability. If you own your building and it's worth $3 million, or if you have $500,000 worth of specialized equipment, you'll need to either add endorsements (which increase your premium) or buy standalone property coverage for the excess amount.
When to Switch to Standalone Policies
The transition from BOP to standalone policies usually happens organically as your business grows. Here are the telltale signs it's time to make the switch:
You've outgrown size eligibility. Once you cross 100 employees or approach $10 million in revenue, most BOP carriers will decline to renew your policy. You're expanding to multiple locations. BOPs typically cover single locations, so multi-site operations need separate commercial policies for each facility or a master policy with location schedules. Your property values exceed BOP limits. When your building, equipment, and inventory are worth more than $2-3 million combined, standalone property coverage offers higher limits and more customization.
You're adding high-risk amenities. Installing a pool, climbing wall, sauna, or childcare area often pushes you beyond what BOP carriers will underwrite. You need specialized coverage. If you're expanding into physical therapy, nutritional counseling, or selling equipment and supplements as a significant revenue stream, you'll need professional liability and product liability coverage that BOPs don't provide.
The cost advantage flips. Once you start adding multiple endorsements to your BOP to cover exclusions and increase limits, you might actually pay less by unbundling and buying standalone policies that are precisely tailored to your needs. Get quotes both ways and compare.
The Cost Comparison That Matters
Let's put real numbers on this. A small gym with basic equipment and 2,000 square feet of leased space might pay $1,200 annually for a BOP with $1 million/$2 million liability limits and $300,000 in property coverage. If you bought these separately, you'd pay roughly $825 for general liability and $800-$1,200 for property insurance—about $1,625-$2,025 total. The BOP saves you around $425-$825 per year.
But scale that up. A larger facility with owned property worth $2 million, $750,000 in equipment, and 75 employees might need $3 million in liability coverage and full property replacement value. A BOP with sufficient endorsements could run $4,500-$6,000. Standalone policies—a comprehensive commercial general liability policy at $2,500, commercial property at $3,000, and an umbrella policy for excess liability at $1,000—might total $6,500. At this scale, the BOP savings shrink or disappear entirely, especially when you factor in the flexibility and customization of standalone coverage.
How to Make the Right Choice
Start by honestly assessing where you are today and where you'll be in two years. If you're a startup studio or small gym that fits comfortably within BOP eligibility, go with the BOP. You'll save money and simplify your insurance management. Review the policy exclusions carefully against your actual operations—if key activities are excluded, that's a red flag.
Get quotes for both scenarios. Ask your insurance agent to price out a BOP and also price out standalone general liability and property policies with equivalent coverage. Look at the total annual cost, but also examine what's covered and what's excluded in each scenario. If you're anywhere near the BOP eligibility thresholds, get standalone quotes too—you'll need them soon anyway.
Don't forget about the coverage you'll need regardless. Whether you choose a BOP or standalone policies, you still need workers' compensation if you have employees. Many gyms also need professional liability coverage, especially if trainers provide personalized programming or nutritional guidance. Cyber liability is increasingly important if you store member credit card information or personal data. Budget for these additional policies when comparing your total insurance costs.
The bottom line? BOPs are fantastic for small gyms and studios that meet eligibility requirements and don't need extensive customization. They save you money and paperwork. But as you grow, adding high-risk features, or need coverage beyond what BOPs offer, standalone policies give you the flexibility and higher limits you need. This isn't a permanent decision—you can start with a BOP and transition to standalone coverage as your business evolves. The key is reviewing your coverage annually and making sure it still matches your actual operations and risk profile.
