Public liability insurance is a foundational requirement for gyms, fitness studios, and training facilities. However, one of the most common—and least understood—decisions gym owners face is choosing the appropriate coverage limit.

In Australia, $10 million and $20 million public liability limits are the most commonly offered options. Many operators select a limit based primarily on price rather than exposure.



The difference between $10M and $20M is not simply a higher number on a policy schedule. It reflects the scale of potential financial exposure, the severity of injury claims, contractual requirements, and the evolving legal environment surrounding personal injury compensation.

This article explains how public liability limits work, why claim costs are rising, and how gym owners can assess whether $10M or $20M cover is appropriate for their business.

What Public Liability Limits Actually Represent

A public liability limit is the maximum amount an insurer will pay for a single claim (or a series of related claims), including legal defence costs, settlements, and damages.

For example:

• A $10M policy responds up to $10 million
• A $20M policy responds up to $20 million

Once that limit is exhausted, the business becomes responsible for any remaining costs, both personally and corporately.

Why Injury Claims Are Becoming More Expensive

Fitness-related injury claims have increased in cost due to several factors, including:

• Rising medical and rehabilitation expenses
• Increased legal costs
• Greater awareness of compensation rights
• Higher expectations around duty of care
• Long-term income loss claims

Even a single severe injury can generate costs well beyond what many gym owners anticipate.

When $10M Public Liability May Be Insufficient

While $10M cover may be adequate for some low-risk operations, it may fall short in scenarios such as:

• Serious spinal or head injuries
• Permanent impairment claims
• Claims involving minors
• Incidents with multiple injured parties
• Claims involving long-term loss of income

In these situations, costs can escalate rapidly—particularly once legal proceedings begin.

Factors That Increase Required Liability Limits

Gym owners should consider higher public liability limits when their business involves:

High-Intensity or Contact Training

Martial arts, boxing, sparring, functional training, and high-impact classes increase claim severity risk.

High Member Volume

Higher foot traffic and participation increase statistical exposure.

Youth and Junior Programs

Claims involving minors often result in higher settlements and longer-tail liabilities.

24/7 Access Models

Reduced supervision increases insurer scrutiny and claim complexity.

Events and Competitions

Demonstrations, gradings, tournaments, and public events elevate exposure beyond day-to-day operations.

Why Many Commercial Contracts Require $20M Cover

Landlords, councils, schools, and corporate partners increasingly mandate $20M public liability as a minimum requirement.

This reflects:

• Risk transfer expectations
• Higher legal claim thresholds
• Protection against catastrophic incidents

Failing to meet contractual insurance requirements can result in lost opportunities or breaches of agreement.

Cost Difference vs Risk Difference

One of the most misunderstood aspects of public liability limits is cost.

In many cases:

• The premium difference between $10M and $20M is relatively small
• The risk difference is substantial

From a risk management perspective, increasing liability limits often provides disproportionate value relative to the additional premium.

The “Single Incident” Problem

Many gym owners assume liability claims involve one injured person. In reality, a single incident can involve:

• Multiple participants
• Spectators or visitors
• Staff members

If several people are injured in one event, claims are aggregated against the same liability limit.

How Underinsurance Impacts Business Survival

Exceeding your public liability limit can result in:

• Personal exposure for directors or owners
• Business insolvency
• Asset liquidation
• Long-term legal and financial consequences

Public liability insurance exists to protect against worst-case scenarios, not average incidents.

Why Limit Selection Should Be Strategic, Not Habitual

Choosing a liability limit should be based on:

• Activity risk profile
• Member demographics
• Contractual obligations
• Business growth plans
• Asset and revenue exposure

Generic recommendations or “standard limits” rarely reflect real operational risk.

This is where specialist assessment becomes critical. Gym insurance brokers assess liability limits based on how gyms actually operate—not one-size-fits-all assumptions.

Final Thoughts

The decision between $10M and $20M public liability is not just a pricing exercise—it is a business survival decision.

As injury claim costs rise and contractual requirements tighten, gym owners must evaluate liability limits through the lens of exposure, not habit. Choosing appropriate limits provides confidence that a single serious incident will not define the future of the business.