I converted my garage into a gym. A client dropped a kettlebell on his foot, crushing three toes. I called my Homeowners Insurance (State Farm). They denied the claim immediately, citing the “Business Pursuits” exclusion, and then threatened to cancel my home policy for running an “undeclared commercial operation.”
Key Takeaways
- The Business Pursuits Exclusion: Homeowners insurance covers personal liability. It excludes anything related to a business.
- In-Home Business Endorsement: You might be able to add this rider for a few hundred dollars, but it usually has low limits and restricts foot traffic.
- Commercial General Liability (CGL): You need a separate business policy.
- Slip and Fall: If the client trips on your driveway walking to the gym, is it Home or Business? The insurers will fight each other, leaving you in the middle.
The “Why”: The Risk Profile
The Trap:
Residential policies are priced for low traffic (friends/family).
A gym brings high traffic and heavy equipment.
Operating a gym without telling your home insurer is “Material Misrepresentation.” They can void your entire home policy (even for a fire) if they find out.
The Investigation: I Quoted 3 Major Carriers
1. State Farm / Allstate (Homeowners)
- My Analysis: They might offer a “Permitted Incidental Occupancies” endorsement. This covers an office or small studio. BUT, they often prohibit “Health & Fitness” due to the injury risk. You must ask specifically.
2. RLI (In-Home Business)
- My Analysis: A standalone policy that sits on top of your homeowners. It covers the business liability. Very affordable (~$250/year). Highly recommended.
3. USLI
- My Analysis: They write specific “Micro-Business” policies for home-based trainers. They cover the slip-and-fall in the driveway and the dropped weight.
[IMAGE: Diagram showing “Home Policy” vs “Business Policy” coverage zones on a property]
Comparison Table: Home Gym Coverage
| Carrier | Homeowners Endorsement? | Standalone Business Policy? | Covers Gym Traffic? |
| State Farm | Maybe (Ask Agent) | No | Limited |
| RLI | N/A | Yes | Yes |
| USLI | N/A | Yes | Yes |
Step-by-Step Action Plan
- Call Home Insurer: Ask “I want to do personal training in my garage. Do you cover this?” If they say no, ask if they will cancel you.
- Buy RLI or CGL: Get a separate business policy immediately.
- Premises Check: Ensure the walkway is safe. Fix cracks in the driveway.
- Waiver: Must state the address and acknowledge it is a home gym.
FAQ
Does my LLC protect my house?
Only if you treat it as a separate entity. Using your personal garage blurs the line (“Piercing the Corporate Veil”).
What if I don’t charge them?
If no money changes hands, your Homeowners might cover it as a guest injury. But if you barter or accept “donations,” it’s a business.
Do I need a Certificate of Occupancy?
Maybe. Check local zoning laws. Insurance might deny a claim if you are operating an illegal business in a residential zone.