Can You Get Liability Insurance Without a Business License

by NEXO Team
February 10, 2021

One of the most important things you can do to protect your business is purchase liability insurance as a gym owner. Liability insurance protects the property, owner, client, and employee level. However, most insurance companies will want to see a copy of your business license before purchasing liability insurance at the customer level.

What is a Business License?

Whether you have a gym in the city limits or the county, you must apply for and be approved for a business license through the local government. This license is a legal registration of your business and the services that you provide. This registration allows you to operate and provide your services in your community. Attempting to operate a business without a license subject you to local fines and reprimands for not properly licensing your business.

Most cities and county websites have the application available online with any fees that may be required. There are some jurisdictions in a few places that may require you to register at the federal or state level, as well. When your county or city inspector visits your business, they will determine if the license you have is sufficient or if additional ones are required.

Once your requested business license has been approved, you will be provided a business ID number and be compliant with your local government laws. With this business license, you are entitled to any protections offered by the local government in which you are registered. You are also eligible to move forward with business operations, including pursuing liability insurance for your facility.

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What do I Need a Business License For?

First and foremost, your business license gives you the ability to open up your gym and offer your services to your clientele. Without a business license, you are operating illegally and are subject to several violations, fines, and other consequences.

Obtaining Commercial Insurance

Your business license is critical to have and be approved when you purchase commercial insurance for your business. Before you can get the basics of general liability workers' compensation or any other protection, your insurance agent will need a copy of your business license. This tells them what type of business you have and helps identify which insurance coverages you need versus what you may want.

Identifying Tax Breaks

Being able to track revenue and manage local and income taxes is essential as a business owner. When you carry a business license, you can file your taxes properly and even take advantage of business tax breaks. Without a business license, you cannot access certain tax breaks and credits at the business level.

Local Accountability

When you obtain your business license, you become an accountable business owner in your area. Your gym agrees to local ordinances based on the jurisdiction where you are operating. You also have access to protections by local ordinances. Your business is not protected without a business license and could leave you liable for damages for property or bodily injury.

Learn more about gym insurance and how to start a gym business »

What is Commercial Liability Insurance?

Before you open your gym, no matter what type of theme you have, one of the best things you can do is protect your business with liability insurance. There are several types of liability insurance options at the commercial level that you can take advantage of and protect everyone using your facility.

General Liability Coverage

This liability coverage option protects your facility from cases where your property or even employees could be found liable in a case. With clients and public patrons visiting your facility regularly, you need to be prepared for any accident or incident.

Medical Expenses
Property Damage
Advertising Injury Claims

Without the right liability coverage for your facility, your business is liable to cover these costs associated with each case. For a small gym or even a new gym just getting started, this could be enough to force your doors to close.

Your liability coverage can also be broken down and supplemented based upon the location, equipment, and type of training that you offer.

Workers' Compensation Coverage

This liability insurance is directed specifically to your employees, giving them financial assistance when they are hurt on the job. With workers' compensation, their medical expenses are covered, and they may even receive a small stipend if they are out of work. Because they accept the case under workers' compensation, they cannot sue your facility, and you do not have to pay out of pocket for their expenses.

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Make Sure to Renew Your Business License

Once you obtain your business license and purchase the liability insurance needed for your gym, you need to make sure that your business license is renewed annually or bi-annually, depending on what the requirements are for renewal in your area. Your insurance agent will request these documents periodically.

Update Your Business License as Necessary

As you add new employees or services to your gym, it is essential to make sure that your business license is updated. Since this determines what type of insurance and ordinances you need, it is important to keep it current, especially if these changes are big as far as multiple employees and the number of members inside the facility at once. Small changes can be amended when you do the renewal, but these changes must be made and recorded for your business.

NEXOFit is Ready to Help!

Once you have obtained your legal business license for your gym, you will require liability insurance coverage right away. As industry leaders for gyms and fitness centers across the country, our team is ready to get your facility insured property to have the protection you need and open your doors.

for a consultation or give us a call at

323-391-7803

for a quote on the liability insurance you need for your gym. We look forward to serving you and your members.