Dance Studio Insurance

As the owner of a dance studio you have invested much time and effort to mak your studio the best possible option for aspiring dancers to immerse themselves in the culture of dance. Without the proper Dance Studio Insurance in place, you risk losing it all. The Dance Studio Insurance package available through Lackner McLennan Insurance has been specifically designed to protect you and your sweat equity. Below is a list of the major coverages included in the Dance Studio Insurance Package. Please note this is not an exhaustive list of the coverages, but a highlighting of the most significant ones.

Coverage Highlights

Liability – Your policy provides $2,000,000 per occurrence of liability with an annual aggregate of $2,000,000. The term aggregate indicates that this is the maximum amount payable in any one (1) policy year inclusive of defense cost. The $2,000,000 limit of liability is shared between what is called Commercial General Liability and Professional Liability (also known as Errors and Omissions or E&O insurance).

Commercial General Liability – Covers the dance studio for bodily injury or property damage that you and/or your business cause to a third party. Example – one of the parents of a student slips on ice in the parking lot and shatters their wrist. You are served a statement of claim (you are named in a lawsuit) for $500,000 to compensate the parent for Pain, suffering, loss of enjoyment of Life, cost of care, cost of future care, Loss of income etcetera. The commercial general liability section of the Dance Studio Insurance policy would provide the dance studio with a defense for the lawsuit and pay up to $2,000,000 in settlement.

Professional Liability / Errors & Omissions Insurance – Covering the dance studio, employees, subcontracted instructors, helpers etcetera from lawsuit due to an error or an omission in their professional activities. Example – a student of the dance studio fractures her neck while being taught how to do a front flip in Acro class. The parents of the injured student bring a lawsuit against the dance studio. The student has permanent paralysis of her legs and will never walk let alone dance again. This would not be covered by the Commercial General Liability insurance, as the lawsuit was a result of an error or omission (professional Liability) of the dance instructor. The Professional Liability / Errors and Omissions section of the Dance Studio Insurance Policy would provide the dance studio with a defense for the lawsuit and pay up to $2,000,000 in settlement.

Business Interruption – Actual Loss Sustained – This coverage provides the dance studio with the profit the studio would have made, had the studio not been shut down due to a sever fire or flood or other insured loss. Business interruption also pays for the fixed costs (costs that do not go away when the dance studio is out of operation). Some examples of these kinds of expenses are: Rents, payroll for key personnel, insurance cost, Interest on mortgages, loans etc. This is the insurance coverage that is going to permit the studio to reopen after a sever loss. It often takes 6 to 12 months for a business to reopen after a fire loss, and the Business interruption coverage will provide the studio owner with the profits they would have made and all fixed costs that do not go away when the dance studio is closed. Actual Loss sustained means that you as the studio owner do not have to ‘calculate’ the limit to insure this coverage to. You will get paid what ever the loss of profits is determined to be plus the fixed cost during the time of shut down.

Business Contents – Furniture, office equipment, props, stereo equipment and basically anything that is owned by the Dance Studio and is kept at the location. This group of property adds up quite quickly. The coverage provided is all on a risk and replacement cost basis. The specific limit of insurance needs to be determined based on the individual studio contents. This is the coverage that will pay to re-purchase your contents should there be a loss.

Property Floater – The Dance Studio Program automatically provides the studio with up to $25,000 to cover the studio contents that go to the venues where year end shows, Christmas shows and competitions are held.

Studio owners often ask me, “Do I really need to buy liability insurance?”

The short answer is a resounding yes! Dance studios have the same risk to being sued just like any other service providing business (Commercial General Liability, Third Party Liability, Public Liability). However Dance Studios also have the additional exposure of professional liability as the studio owner(s) and instructors are considered “Experts in their field”. So, if a student suffers a sprained or broken ankle, this could POTENTIALLY lead to a lawsuit.

You may feel that bumps, bruises, sprains and even a broken bone are part of “being a dancer” and you most likely suffered one or two of these injuries yourself. However, these days, people in our society would rather blame someone else than take responsibility for a bodily injury. This shows how easily a potential lawsuit could happen.

Lackner McLennan has been insuring Canadian businesses for over 65 years. We have developed programs for many different professional groups, like yoga studios, CrossFit, Massage Therapists to name a few. We know and understand what liability exposures you have as a dance studio owner and or individual instructor.