Insuring fitness centers against water damage and fire damage

1/18/2023 (Permalink)

Blog Summary: SERVPRO® of Carrollton explains insurance coverage options for sports and fitness center businesses.

SERVPRO of Carrollton provides the fire damage, smoke damage, and water damage restoration services that sports and fitness centers in Far North Dallas, TX, need to resume operations as quickly as possible after property damage. The insurance claims process can be challenging to maneuver. SERVPRO of Carrollton can handle the insurance claims process from beginning to end so the business owner can focus on serving customers and clients.

Commercial property insurance assures business owners that their financial future is secure in the event of fire damage, smoke damage, water damage, or other types of property damage. Insurance pays to clean up and restore the damage. Fitness equipment damaged by fire, smoke, water, or vandalism will be repaired or replaced. Also, the structural damage will be repaired if the facility is damaged or destroyed. Any unsalvageable inventory is covered. Retention of existing members and recruitment of new members are two critical components to success, and nonfunctional workout and exercise equipment can directly impact the revenue stream and the recruitment of new members. Disruption of services can short-circuit retention and the influx of new members, crippling the business. Commercial property insurance will not prevent a disaster but can facilitate a fast recovery and return to normal business operations. An understanding of the critical components of commercial property insurance is foundational. The tips and topics below will focus attention on the pillars of the commercial property insurance policy.

Coverage

The policy covers the following:

• buildings owned or leased by the operator and outdoor property not attached to the building
• items in the care, custody, or control of the entity
• furniture, office equipment, janitorial equipment, laundry equipment, and supplies
• artwork
• fitness equipment
• inventory, such as health foods and beverages, essential and aromatic oils, and merchandise
• personal property of customers while in the care of and on the premises of the facility

Bonus tip: Coverage of customers’ belongings is often low. Bailee’s customer insurance is a type of insurance designed to limit the business’s exposure. If the equipment attendant drops a dumbbell on a customer’s phone, then the damage is covered.

Exclusions

The business owner must be aware of any exclusions in the policy. Electronic data, such as software and customer records, are not covered. Consult an insurance agent about procuring a separate electronic data policy. A commercial policy will replace or repair a computer damaged during a fire, but it will not cover the cost of data recovery. Company vehicles are excluded, as well. An auto policy must be obtained for the fleet.

Risks coverage: Named perils and open perils policies

The owner/operator of a fitness center can choose an open perils policy or a named perils policy. An open perils policy covers all perils except those excluded from the policy. A named perils policy covers specific risks delineated in the contract.

Common named perils include:

• fire and smoke damage
• water damage (HVAC, plumbing, fire sprinklers)
• weather events (hail, windstorms, lightning)
• explosions
• the impact from vehicles or airplanes (The business’s vehicles and aircraft are excluded.)
• sinkholes
• falling objects
• riots, civil commotion, and vandalism

An open perils policy, usually more expensive because of the broader coverage, makes sense if the fitness center has a large amount of very expensive equipment.

Many exclusions are listed on both named and open perils policies. Examples of exclusions include, but are not limited to, the following:

• earthquakes, landslides, or volcanic activity
• water events (flooding, sewage or drain overflows, mudslides, tsunamis
• mold, bacteria, rot (both wet and dry)
• damage or loss incurred due to compliance with an ordinance or law
• war and military action
• nuclear hazards from a nuclear power plant

An endorsement can be added to the policy to cover any excluded peril.

Replacement cost vs. actual cash value policies

A business has two avenues for valuing its property. Replacement cost (RC) coverage pays for repairing or replacing damaged property. Be aware that depreciation is not applicable in this situation. The other option, actual cash value (ACV), covers the replacement cost of the damaged item at the time of the loss. Depreciation is factored into the valuation of the damaged property. The higher payout for replacement costs elevates premiums for replacement cost coverage.

Additional insurance coverage

Consult with a qualified and experienced insurance agent for information about additional coverage such as coinsurance, equipment breakdown insurance, virtual or remote fitness coverage, inland marine insurance, and business income insurance.

What to do in the event of a property damage disaster

The sports and fitness industry depends on the business's location, the facility's quality, and the equipment's functionality. Damage to the property and equipment or a forced relocation can ruin a business. A quick cleanup and restoration after a property damage disaster are vital if this type of business survives.

SERVPRO of Carrollton is available 24/7, 365 days a year, including holidays. Crews can be on-scene in about an hour. The rapid response and quick cleanup and restoration enable a fitness center to be up and running almost immediately. Customers may not notice any disruption, depending on the location and size of the damage.

The best time to secure the services of a property damage restoration service is before a disaster. By pre-qualifying with SERVPRO of Carrollton as the dedicated service provider, a property damage disaster only requires one phone call to begin the restoration process.

To learn more about Far North Dallas, TX, water damage restoration services, contact SERVPRO of Carrollton by phone at (972) 446-0383 or by email at office@SERVPRO10952.com.