Sports Facility Commercial Property Insurance
The investment needed for building a sports facility is monumental. To build a small sports facility with a capacity of 50-150 people, one needs $25,000-$200,000.
Just imagine the losses if something happens to your sports facility and you don’t have insurance. You have to be vigilant. Buy commercial property insurance for your sports facility.
So how does commercial property insurance work? You can use this insurance to recoup losses when:
Your sports facility’s roofing, siding, wall, pipes, glass panes, courts, or other structures sustain damage
Your sports facility is completely destroyed
Understand that commercial property insurance only helps if damage or destruction is caused by any of the following perils:
Sinkhole collapse
Fire
Vandalism
Theft
Malicious mischief
Volcanic action
Impact
Aircraft
Vehicles
Lightning
Winds
Hail
Other covered perils
In a way, commercial property insurance allows you to resume business operations even if a major disaster happens to your sports facility. That said, you’re increasing your business’s survival by having this insurance.
Commercial property insurance can be added with contents coverage. Contents coverage will reimburse losses if sporting equipment, installations, fixtures, documents, and other valuables in your sports facility are damaged or destroyed by the above perils.
You can also find insurance companies selling commercial property insurance offering replacement cost coverage and actual cash value coverage.
In a replacement cost coverage, commercial property insurance refunds the original market value of a covered property. And so, you also get $1 million from commercial property insurance if your sports facility is worth $1 million.
As for actual cash value coverage, this provides a reimbursement equal to the depreciated value of a covered property. So, if your sports facility is worth $1 million and it depreciated by 5% before a covered peril happened, you only get $50,000 from commercial property insurance.
Some insurance companies that cover sports facilities allow you to purchase commercial property insurance as an open peril or named perils policy.
Named perils commercial property insurance only provides coverage if damage or destruction of business property is caused by the exposures listed on its terms. For example, if named perils commercial property insurance only states that fire and theft are only covered, then you can’t use it if your sports facility is damaged or destroyed by lightning, hail, or theft.
In contrast, open perils commercial property insurance provides coverage for all exposures except for those excluded in its terms. For example, if the policy states that fire and theft are excluded, then coverage applies if your business property is damaged or destroyed by exposures other than these two.
Sports Facility Workers' Compensation Insurance
Accidents will happen in your sports facility and an employee can get injured. It’s also possible for an employee to sustain a disease because of his or her tasks. As mandated by law, your sports facility must provide compensation if an employee suffers from a work-related injury or disease.
Buying workers' compensation insurance is the best way for your sports facility to compensate an injured or sick employee without incurring losses. Particular costs this insurance covers are the following:
Medical expenses-Workers compensation insurance covers ambulance fees, emergency room fees, and other related expenses if your sports facility’s employee sustains an injury due to a work-related accident
Hospitalization-You can use workers' compensation insurance to reimburse the employee of your sports facility if he or she needs to stay in the hospital after sustaining a work-related injury or disease
Medication-Workers compensation insurance covers the cost of stimulants, relaxants, antibiotics, or other types of medicines prescribed by the doctor for your employee to fully heal from a work-related injury or disease
Rehabilitation-If your employee becomes impaired due to a work-related injury or disease, workers' compensation insurance provides the funds to cover rehab expenses. This includes psychiatrist fees, personal training fees, and rehab equipment costs
Lost wage-Your sports facility must cover lost wages if an employee can’t work for days, weeks, or months due to a work-related injury. Workers' compensation insurance takes care of this responsibility. While your employee can’t work, the policy provides a weekly allowance equal to two-thirds or 67% of the average weekly wage. So if your sports facility’s employee earns $800 per week, then the weekly allowance from workers comp insurance will be $536
Death benefits-Workers compensation insurance covers funeral expenses if your sports facility’s employee dies due to a work-related injury or disease. The policy also provides an allowance to dependents
Workers' compensation insurance doesn’t only provide coverage for work-related injuries or diseases sustained at the premises of your business. Coverage also applies if something happened to your employee while he or she is at another location to accomplish a task.
It’s easy to determine how much you pay for workers' comp insurance. Its cost is equal to $100 increments of any covered employee’s annual payroll multiplied by the rate of the insurance company (in most cases, workers comp for sports facilities cost $1 per covered payroll).
What Will Happen If Your Sports Facility Doesn’t Have Workers' Compensation Insurance?
Workers' compensation insurance is required by law the moment you have one or more employees. In some states, this is required even if a business is run by family members. Each state in the US imposes its own penalties to sports facilities that don’t have workers comp. Here are some examples:
Montana-Sports facilities that don’t have workers comp must pay a fine amounting to $200 or an amount twice the premiums of workers comp insurance for the past three-year payroll of uncovered employees
Utah-Utah workers comp law states that businesses such as sports facilities that don’t have workers comp are punishable by a $1,000 fine, misdemeanor, legal injunction from operating in the state, and imprisonment
Oregon-Your sports facility will pay $1,000 in the first instance that it didn’t purchase workers' compensation insurance for employees. Any continued violation will result in a $250 fine multiplied by the days your sports facility doesn’t have workers' compensation insurance
Maine-Failure to get workers' compensation in Maine will result in a civil penalty amounting to $10,000 or an amount equal to 108% of the premiums for workers' compensation insurance
Maryland-If your sports facility can’t cover an employee using workers' compensation insurance, it will be fined $10,000.
Georgia-Operating a sports facility in Georgia without workers' compensation insurance is punishable by a $500-$5,000 fine, one-year imprisonment, and misdemeanor charges
Workers' compensation insurance is an expensive policy. Nonetheless, as you’ve seen above, it’s better to have it. The consequences of not having workers' compensation insurance are more problematic than the premiums you’ll have to pay.
Sports Facility Commercial Auto Insurance
Commercial auto insurance is available if your sports facility owns cargo vans, pickups, buses, or any other vehicles used for sporting activities. One thing you should know about commercial auto insurance is that it offers different types of coverages such as:
Auto liability coverage-Auto liability coverage provides help if your sports facility’s bus or commuter van causes an accident. It will pay for the ambulance fees, emergency room fees, and other medical expenses of injured victims. This coverage will also reimburse those who had their property damaged. Note that auto liability coverage is a legal requirement.
Physical damage coverage-It’s up to you whether or not to include physical damage coverage in commercial auto insurance. Physical damage coverage is available as a collision policy or comprehensive policy. Collision physical damage coverage will cover the replacement or repair of parts if your sports facility’s commuter van or bus crashed into something. On the other hand, comprehensive physical damage coverage will pay for parts repair or replacement if your sports facility’s bus or commuter van was damaged by fire, theft, vandalism, and other covered perils
Uninsured/underinsured motorist coverage-Uninsured/underinsured motorist coverage will take care of costs if your sports facility’s bus or commuter van got involved in an accident caused by a driver who isn’t insured or doesn’t have enough coverage
Medical payments coverage-Commercial auto insurance will offer this if your sports facility is in a fault state. Medical payments coverage will pay for the driver and passenger’s medical expenses if your sports facility’s bus or commuter van was accidentally hit by another vehicle
Personal injury protection-This is included in commercial auto insurance if your sports facility is in a “no-fault” state. Personal injury protection covers the medical expenses, lost wages, and rehabilitation of the driver and passengers if your bus or commuter van caused an accident or got involved in an accident
You must understand that the auto liability coverage in commercial auto insurance only covers the vehicles registered under your sports facility’s name.
It won’t cover expenses if the accident is caused by an employee's car or a hired vehicle. Also, know that the policy doesn’t help if your sports facility’s commuter van or bus caused an accident because of a criminal activity.
That said, you need to purchase non-owned auto/hired auto liability coverage to cover accidents caused by a vehicle your sports facility hired or borrowed. Hired/non-owned auto liability coverage is offered as an inclusion to the terms of general liability or commercial auto insurance.
Physical damage coverage doesn’t cover aftermarket parts. Also, it won’t cover repair or replacement expenses if your sports facility’s bus or van got damaged because of a rollover.
Business Interruption Insurance for Sports Facilities
Business interruption insurance will help you cover expenses while your sports facility is closed due to a renovation, relocation, or economic crisis. You use this policy to cover mortgage, loans, taxes, payroll, electrical bills, water bills, and other operational costs while your sports facility isn’t generating income.
Employer’s Liability Insurance for Sports Facilities
Employer’s liability insurance covers expenses if an employee sues your sports facility for negligence after sustaining a work-related injury or disease. Sometimes offered as an optional coverage in workers' compensation insurance, this covers settlements, attorney fees, administrative costs, and other legal expenses.
Specialized Types of Sports Facility Insurance
Some insurance companies underwrite specialized insurance plans for indoor sports facilities, water sports facilities, climbing wall facilities, and soccer facilities. Let’s discuss each in the following sections.
Indoor Sports Facility Insurance
Indoor sports facility insurance is a tailored protection for facilities used for badminton, tennis, volleyball, basketball, and other indoor sports.
General liability insurance for indoor sports facilities covers property damage or personal injury claims resulting from spectators or vendors being hit by something, slip and fall accidents, etc. It has a $1 million-$2 million per occurrence limit. Participant accident coverage can be added to its terms.
Liquor liability insurance is offered as a stand-alone coverage. This has a $500,000-$2 million per occurrence limit
Professional liability insurance is included. This covers costs if a coach or any other employee of an indoor sports facility is accused of committing negligence or inaccurate advice.
Other inclusions in an indoor sports facility insurance plan are workers compensation, commercial property, and employer’s liability insurance.
Water Sports Centre Insurance
Water sports centre insurance is a protection carriers especially underwrite for sports facilities used for kayaking, fishing, swimming, waterskiing, and other water sports.
A public liability policy is available from water sports centre insurance plans. Similar to general liability insurance, this covers personal injury and property damage claims. In particular, this is useful if someone drowns in your water sports center. This has a $1 million-$2 million per occurrence limit.
You can also avail professional liability insurance. This covers attorney fees, administrative costs, and settlements if an accident happened in your water sports center because lifeguards and other staff were negligent. Policy limits start at $1 million per occurrence.
Of course, there’s abuse and molestation insurance. This will pay for legal expenses if your water sports center is sued because an employee molested or sexually harassed a person within the premises of your business.
Machinery and plant insurance is also included. This will cover repair costs if equipment you own or those that you’ve hired for a water sports activity is damaged or stolen.
Last but not least is engineer inspection coverage. Since you’re running a water sports center, regular inspections are needed to ensure that the premises are safe for use. The job of engineer inspection coverage is to pay for the services of an engineer.
Climbing Wall Insurance
Climbing wall insurance is a specialty coverage for sports facilities that host rock climbing training and sports activities. Inclusions are general liability, excess liability, commercial property insurance, and accident medical coverage.
The general liability policy included in a rock climbing wall insurance plan will have a $1 million-$2 million per occurrence limit. But note that, it’s also possible to find a carrier that underwrites a general liability for rock climbing facilities with a per occurrence limit of $3 million-$5 million.
Note that the general liability policy for climbing wall facilities offers abuse and molestation coverage, participant accident coverage, and non-owned/hired auto coverage as optional policies.
Accident medical coverage works in tandem with general liability insurance. This covers injuries and dismemberment. It provides $5,000-$25,000 coverage for medical expenses. In case of death, accident medical coverage gives a $5,000 cash as compensation for funeral costs.
Participant accident coverage kicks in when a participant sustains injuries during a rock climbing event hosted by the policyholder’s rock climbing facility.
Excess liability insurance for rock climbing facilities supplement the limits of general liability insurance. It provides $1 million-$10 million additional layer of coverage.
As for the final inclusion, commercial property insurance, this can be used to cover repair or reconstruction costs in case the rock climbing structure and the facility itself is damaged by theft, fire, lightning, and other covered perils.
Soccer Field Insurance
Soccer field insurance is a specialized protection for football facilities. Inclusions are general liability insurance, workers compensation insurance, commercial property insurance, professional liability insurance, and participant accident coverage. The general liability insurance for soccer fields has a $2 million-$5 million per occurrence limit. Limits can be customized to meet the requirements of soccer sports events.
