I started as a solo trainer using my SSN. I bought a cheap “Personal Trainer” policy. Now I hired an assistant trainer and formed an LLC. I didn’t update my insurance. My assistant dropped a weight on a client. The insurer denied the claim because the policy was in my name (“John Doe”), not the LLC (“Doe Fitness LLC”), and didn’t cover employees.
Key Takeaways
- Named Insured: The policy must match the business entity. If you are an LLC, the policy must list the LLC.
- Employees vs. You: A “Solo” policy covers only you. A “Commercial” policy covers the business and its employees.
- Workers Comp: Once you hire an employee, you are legally required to buy Workers Comp in almost every state.
- The Gap: If you didn’t update the policy, the LLC has no coverage, and you personally might be shielded by the LLC, but the business assets are exposed.
The “Why”: The Entity Change
The Trap:
You incorporate to protect your assets.
You forget to move the insurance to the corporation.
Result: The LLC is sued. The LLC has no insurance. The plaintiff takes the LLC’s bank account.
Also, the “Solo” policy specifically excludes acts of “employees” because you didn’t pay the premium for them.
The Investigation: I Quoted 3 Major Carriers
1. NEXT Insurance
- My Analysis: easy to switch. You can log in and change “Sole Proprietor” to “LLC” and add “1 Employee.” The premium will jump (doubles usually), but you are covered.
2. The Hartford
- My Analysis: They write “Business Owners Policies” (BOP). This is what an LLC needs. It covers the entity, the staff, and the property.
3. Insure4Sport (Solo)
- My Analysis: They generally only write solo policies. If you hire staff, you might outgrow them and need to cancel/rewrite with a bigger carrier.
[IMAGE: Graphic showing “Solo Policy” vs “Commercial Policy” structure]
Comparison Table: Business Growth
| Stage | Policy Type | Cost | Covers Employees? |
| Solo | Professional Liability | $150/yr | No |
| LLC (Solo) | Comm. Gen. Liability | $300/yr | No |
| LLC (Staff) | BOP + Workers Comp | $1,500/yr | Yes |
Step-by-Step Action Plan
- Call Agent: “I formed an LLC.” Change the Named Insured.
- Add Employees: Do not hide them. If they hurt someone, you are naked.
- Buy Workers Comp: Mandatory.
- Update Contracts: Ensure client contracts are with the LLC, not you personally.
FAQ
Can I just add the LLC as “Additional Insured”?
No. The LLC should be the First Named Insured.
What if I treat them as 1099?
See “Independent Contractor” article. They need their own insurance.
Does the LLC protect me from negligence?
Not always. If you personally dropped the weight, you can still be sued personally. Insurance protects both.