When it comes to public liability insurance, one of the most common questions I’m asked is straightforward:

“Is $10 million enough?”

It sounds like a large number. And in everyday terms, it is.

But liability limits are not selected based on what feels large. They are selected based on exposure.

The real question is not whether $10 million sounds sufficient.
It is whether it reflects the scale and risk profile of your operation.

Let’s approach this logically.



What Public Liability Actually Covers

Public liability insurance responds when a third party suffers injury or property damage and alleges your negligence.

It covers:

• Legal defence costs
• Settlement amounts
• Court-awarded damages

Importantly, defence costs can be substantial even when liability is disputed.

The policy limit represents the maximum amount the insurer will pay for a claim (or sometimes in aggregate, depending on wording).

If damages and legal costs exceed that limit, the balance may fall back on the business.

That is the reality many owners overlook.

Understanding Severity, Not Just Probability

In fitness environments, severe injuries are not frequent — but they are possible.

Consider:

• Spinal injuries
• Traumatic head injuries
• Permanent disability
• Complex fractures requiring surgery
• Long-term rehabilitation costs

When loss of income, medical costs, care requirements, and legal expenses are factored in, claims can escalate significantly.

Liability limits are not chosen based on the average claim.
They are chosen based on worst-case exposure.

Lease Requirements: The Baseline, Not the Benchmark

Many commercial leases specify a minimum public liability requirement — often $20 million.

Some smaller facilities may only require $10 million.

It’s important to understand that lease requirements are minimum compliance thresholds. They are not risk assessments.

Landlords protect themselves by imposing conditions.

As an operator, your consideration should go beyond satisfying a lease clause.

The question becomes:

If a serious claim occurred, would this limit genuinely protect the business?

The Cost Difference Is Often Marginal

In many cases, the premium difference between $10 million and $20 million is not proportionate to the increase in protection.

The incremental cost is often modest relative to the financial buffer it provides.

When owners reduce limits purely to lower premium, they are effectively self-insuring the gap between the chosen limit and potential exposure.

That gap can be significant.

Your Activities Influence Your Exposure

A small, supervised personal training studio with limited equipment carries a different exposure profile to a large 24/7 facility offering:

• Heavy free weights
• Olympic lifting
• Combat sports
• High-intensity functional training
• Youth programs
• Group classes with high participant density

As activities increase in intensity and complexity, exposure increases.

If you operate unstaffed hours, your risk profile shifts again.

Liability limits should reflect operational reality.

Membership Volume Matters

The larger your membership base, the greater the statistical likelihood of incidents occurring.

Even with excellent systems, increased participation increases exposure frequency.

A facility with 150 members differs from one with 2,000 active members.

Insurance is partly about scale.

More people through the doors means more potential interaction with equipment, flooring, staff instruction, and other members.

Limits should scale accordingly.

Defence Costs Alone Can Be Significant

Even when claims are defensible, legal proceedings are expensive.

Barristers, solicitors, expert witnesses, medical reports, and court processes accumulate cost quickly.

If your policy limit includes defence costs within the overall cap, those costs reduce the available amount for settlement.

Understanding whether defence costs are inclusive or additional to the limit is important.

These are details that influence real protection.

Catastrophic Claims: Rare but Transformational

Most claims in fitness environments are manageable.

But catastrophic injuries, while rare, can alter the financial stability of a business permanently.

Permanent disability claims can extend into multi-million-dollar territory.

If damages exceed your liability limit, your business assets may be exposed.

Insurance is designed to protect longevity.

Selecting limits based on optimistic assumptions undermines that objective.

Risk Appetite and Business Strategy

Insurance decisions also reflect your risk tolerance.

Some operators are comfortable carrying lower limits if they perceive exposure as minimal.

Others prefer broader financial security.

There is no universal answer — but there is a disciplined way to decide:

• Assess your activities
• Assess your membership scale
• Assess your operating hours
• Assess your financial resilience
• Review lease obligations
• Evaluate the premium difference

A structured decision is better than a reactive one.

The Question to Ask Yourself

If a serious injury occurred tomorrow resulting in a claim of $15 million:

Would your current policy limit fully respond?

If the answer is no, you are effectively accepting the financial exposure between your limit and that claim.

Insurance is not about expecting disaster.
It is about preparing for possibility.

Avoiding the “It Won’t Happen to Me” Mindset

Every serious claim I have seen was once considered unlikely.

Risk assessment requires objectivity.

It is easy to focus on your safety systems and responsible culture — and those absolutely matter.

But risk is not eliminated entirely by good intentions or even strong procedures.

Insurance exists because unpredictable events occur in environments involving physical activity.

Final Perspective

The difference between $10 million and $20 million is not about fear.

It is about buffer.

It is about protecting the years of effort you have invested in building your facility.

It is about ensuring that a single serious incident does not compromise long-term viability.

Public liability limits should reflect exposure, scale, and strategic foresight — not just premium cost.

When your limits align with your operational reality, insurance performs its role properly.

When limits are chosen without reflection, protection becomes conditional.

Strong businesses plan beyond the minimum.

Your liability limit should do the same.