As a Personal Trainer, Should I Be a Sole Proprietor or LLC?

As a Personal Trainer Should I be a sole proprietor or LLC?

As a personal trainer, should you form a limited liability company (LLC) or operate as a sole proprietor? The choice could have important implications for the success of your business.

Sole proprietorship: The Simplest, But…

FITCO Personal Trainer InsuranceOne of the benefits of being a sole proprietor is that you are in full control of your destiny.

As a sole proprietorship, you are simply operating your business as a single individual who has not registered with your state as a type of business entity, such as a corporation, partnership, or LLC.

In other words, if you are operating your business as yourself.

As a sole proprietor, you should keep track of business expenses and income separately from your personal expenditures and at the end of the year, you will report your business gain or loss on your personal tax return.

What could be easier?

Risks of Sole Proprietorship

While it costs nothing to form, and is the simplest and most popular form of business start up, a sole proprietorship does not provide you with the same legal and tax advantages that forming an LLC provides.

A sole proprietorship is not considered a separate legal entity.

Operating as a sole proprietor exposes your personal assets to business creditors, as your business is simply an alter ego of yourself, rather than a separate legal entity.

For instance, if your business fails you can be personally liable for any debts or liabilities incurred by the business. If you are sued by a client or by a gym or have a legal disagreement, you could be personally liable for any claims that occur.

Business and Insurance Benefits of an LLC

A limited liability company, or LLC, is a common legal structure for small businesses in America.

By forming an LLC, you gain the same flexibility benefits, independence and control as a sole proprietorship, while gaining the protection of being treated as a separate legal entity.

If you are operating your business as an individual, you may form what is called a “single member LLC”. In a single member LLC you will most likely declare yourself as the “Managing Member” of the LLC. As the Managing Member of the LLC you are in charge of maintaining the LLC.

When you conduct business, any clients you work with or companies you do work for will use the name of the LLC (i.e. “XYZ Fitness LLC”), rather than your individual name.

The LLC structure provides you with personal asset protection, since creditors can only go after business assets held in the name of the LLC. An LLC protects the owners from the debts of and any judgments against the business.

As mentioned above, a single member LLC is similar to a sole proprietorship from a tax standpoint. An LLC is considered a “pass through entity”. As the Managing Member of the LLC, you are compensated in the form of distributions of profit, which are taxed at your own marginal tax bracket (the tax rate applicable to the next dollar of taxable income that you earn).

Conversely, if your business declares a loss, you claim the losses on your personal tax return.

Insurance for Personal Trainers and LLCs

Another benefit is insurance.

Personal trainers are often required to provide proof of insurance coverage and name the gym as an “additional insured”. No problem! With FITCO, you can get $2,000,000 of general liability coverage, and up to $5,000,000 aggregate, in minutes.

But what if you need more than $2,000,000 of insurance on a per incident basis?

Personal trainers and other health and wellness professionals can sometimes find it difficult to obtain higher levels of insurance coverage (i.e. $5,000,000 of per incident general liability coverage) when operating as a sole proprietor.

However, by forming and operating as an LLC you have indicated a certain level of sophistication and thoughtfulness in your business approach. And higher levels of coverage are often no problem for an LLC.

Fitness instructor sole proprietor or LLC?

How do I form an LLC?

Forming an LLC is simple.

You can literally create an LLC from home with your laptop by using companies such as, or Legal Zoom. The process usually only takes a few weeks to complete and may cost as little as $300-$1,000. While there is a small investment, the upfront cost is well worth it when compared to the thousands, or tens or even hundreds of thousands of dollars you could be liable for as a sole proprietor.

If you are a single individual, and are serious about your personal trainer business, you may want to strongly consider selecting the LLC form of business organization.

FITCO can help with any business insurance you need as a personal trainer, martial arts instructor, yoga instructor, dance instructor, swim instructor, CrossFit instructor, music instructorPilates instructor and more. Have questions? Give us a call or send us an email.



FITCO is not providing legal advice, and we are not CPAs or attorneys. As such, you should not consider anything in this article to be tax or legal advice. You should consult your personal attorney or CPA before you make any decisions on the structure of your business or changing that structure.

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Insurance for Tai Chi and Qigong Instructors?

An Insurance Program Designed for Tai Chi and Qigong Instructors

Tai chi, also known as T'ai Chi Chuan, is an ancient Chinese form of exercise that is practiced by people all over the world.

While practiced as an individual exercise, tai chi was originally created as a form of self-defense and is also a form of Chinese martial arts. Tai chi has its roots in Chinese healing, as do other Chinese martial arts practices, including pushing hands (aka “push hands”), and qigong.

As a martial artist practicing tai chi, he or she learns to redirect internal energy, or chi (pronounced “chee”), by carefully repeating physical movements that appear to flow effortlessly, in slow motion.

Tai chi instructor insurance

Tai chi can not only be excellent exercise, it also has mental benefits. Some consider tai chi to be a form of meditation, and even medication. Indeed, in both Eastern and Western medicine, a prescription of tai chi can be used in conjunction with primary medical treatments to improve a patient's functioning and quality of life.

The mind-body connection in tai chi may be why its adherents are so loyal to it.

According to Peter M. Wayne, assistant professor of medicine at Harvard Medical School and Director of the Tai Chi and Mind-Body Research Program at Harvard Medical School’s Osher Research Center, "A growing body of carefully conducted research is building a compelling case for tai chi as an adjunct to standard medical treatment for the prevention and rehabilitation of many conditions commonly associated with age."

Fulfill Local Gym General Liability Insurance Requirements

As a tai chi instructor, you may conduct outdoor clinics or work indoors at a gym, or a local recreation center. For private or 3rd party locations they will often require that you have your own general liability or professional liability insurance. They may also require you to name them as additional insured on your policy.

For instance, you may be required to sign an agreement with the gym or rec center that requires you to produce a certificate evidencing current liability insurance from a carrier that is “admitted” in your state and by a company with an AM Best rating of A or better. The required insurance may include commercial liability insurance inclusive of professional liability with a minimum of $1,000,000-2,000,000 liability coverage per occurrence. The actual requirements you encounter will vary, of course.

FITCO offers this type of insurance for Tai Chi, Qi Gong, Push Hands and more. If you are a tai chi and other Chinese martial arts instructor, you can get the peace of mind by knowing that you have broad insurance coverage, and are protected at an affordable premium. If you need additional insured added to your policy? No problem. The first 10 are FREE. Any additional insureds thereafter are $25.00.

Unlike other insurance programs for martial arts instructors, FITCO’s martial arts insurance includes general liability, professional liability, sexual abuse/molestation coverage, personal & advertising injury, damage to rented premises, products and completed operations, meical payments coverage and more.

Tai chi practitioner

Professional liability coverage provides you with protection from claims of negligence while delivering professional advice or performing professional services. For martial arts instructors trainers and athletic trainers, professional liability can also be referred to as malpractice insurance.

If a client follows your professional advice in the course of your duties as a martial arts instructor, and they hurt themselves, they could make a claim against you for negligence.

What do you get with Tai Chi and Qigong Insurance from FITCO?

Affordable: Insure yourself for as little as $ 0.63 cents per day. Get general liability coverage including:

  • $1,000,000 per occurrence/$3,000,000 aggregate $
  • 100,000 sexual abuse/molestation coverage
  • $1,000,000 personal & advertising injury coverage
  • $3,000,000 products and completed operations coverage
  • $100,000 damage to rented premises coverage
  • $2,500 medical payments coverage

Need higher limits? No problem! Additional per occurrence and general aggregate policy limits are available up to $2,000,000 per occurrence and $5,000,000 aggregate for only pennies a day.

Credibility: Establish credibility and professionalism with your clients and partners by having insurance for your business. Your customers will appreciate when you tell them that you have insurance. Provide partners with additional insured coverage at their request.

Broad protection: Unlike certain other martial arts instructor insurance policies that exclude important coverages such as sexual abuse and molestation, FITCO includes sexual abuse and molestation coverage automatically.

Zero deductible: General liability policies have zero deductible. Certified trainer professional liability insurance may also have zero deductible.

Getting covered takes only a few minutes and you'll have the protection you need from an A-Rated A.M. Best carrier. Signing up for FITCO insurance is easy. Get covered in just a few seconds. Have questions? Contact us or call us at 800-991-3080.

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3 Things Every Personal Trainer Needs in Their Toolkit

Becoming a personal trainer offers you the freedom to be your own boss, to control your schedule and help others achieve their personal dreams of losing weight and improved health.

By applying your expertise to help your clients become happier and healthier, you’ll see first hand results of your fitness and training expertise.

To ensure the success and growth of your business, the following are 3 boxes you should check for your future success and the success of your clients.

Personal Trainer Insurance

1. Professional Certification for Personal Trainers

If you are just starting out as a personal trainer, or are preparing to start your practice, you will want to earn a professional certification through an industry organization for your specific area of expertise.

According to the U.S. Bureau of Labor Statistics, employers and clients prefer to hire personal trainers and instructors who are certified by an accredited organization. Specialty certifications are available for CrossFit, yoga, pilates, martial arts, personal training and weight training.

The National Commission for Certifying Agencies (NCCA) offers a list of organizations that are accredited. To find a fitness instruction program that is accredited by NCCA, do the following:

  1. Visit:
  2. Choose “Fitness and Wellness” from the industry menu
  3. Leave the other boxes blank
  4. Click “search”

The following are accredited or accepted industry organizations you should consider to earn your certification in the areas of your expertise:

Personal Trainer Liability Insurance

2. Personal Trainer Insurance

Your clients see you as the expert on personal fitness… And they are relying on your expertise and knowledge to help them achieve their goals. However, if one of your clients injures himself or herself while being trained, you open yourself up to a potential lawsuit.

Whether you train your clients in a gym, provide training out of your home, or go to clients’ homes, you will want to have a personal trainer liability insurance policy as a critical safety net.

Here are just a few of the situations where you could find yourself in need of insurance or being blamed (falsely or otherwise) for problems in the course of your personal training:

  1. Client using poorly maintained equipment is injured by the equipment while in a workout session.
  2. Client has a high propensity to injure himself, but doesn’t disclose it, and hurts himself during a workout session with you.
  3. Client falsely accuses you of inappropriate or sexual misconduct.
  4. A facility or client requires you to hold a certain amount of insurance coverage.

It's standard practice for your gym to require you to hold a personal trainer general liability (GL) policy.

General liability insurance is considered third party insurance because it protects the you and the gym from claims by your clients (who are third parties) in the event that they are injured at the location where you are training them.

Your personal trainer insurance should include professional liability coverage as well. Personal trainer professional liability, also called errors and omissions, or malpractice insurance, is first party insurance meaning that it protects YOU from liability in the event that your client is injured because of an exercise or advice that you provide to them while guiding their training.

Should I Forgo Insurance and Self-Insure?

Self insuring means that you are holding enough financial reserves on your own balance sheet to pay for medical, health or other damages to an injured party or to defend yourself in the event of a lawsuit. Most personal trainers do not have this type of cash.

As an independent fitness professional, you don’t have time to worry about defending yourself from potential lawsuits. The cost of a lawsuit can run in the hundreds of thousands of dollars. And the peace of mind that insurance brings can be had for a relatively small cost, often only pennies per day.

Your insurance policy allows you to focus on what you do best, while not having to worry about being exposed to unnecessary liability.

Coverage for your personal trainer business can be had for only pennies per day, including professional liability insurance, as described above.

Personal Trainer Professional Liability Insurance

3. How to Save a Life - Know CPR and First Aid

By partnering with a local gym where you can meet your clients, you can gain referrals as well as increase your visibility for other potential new clients who work out there. Great personal trainers are often hired by their local gyms to help with exercise classes.

You can be a major asset to your local gym by having training in cardiopulmonary resuscitation (CPR) and/or First Aid. This can literally be a lifesaver for clients and for your reputation as a personal trainer.

Just ask local Maryland spinning instructor, Kevin Owens, who saved the life of Sergey Orekov, one of his class participants, by performing CPR on him.

In the middle of the spinning class a man who was participating, and probably overdoing it... suddenly collapsed, falling off of his spinning bike.

By knowing CPR and First Aid, Kevin was able to resuscitate the man, ultimately saving his life. The gym where he worked was lucky to have him and to have insurance in the case of such an occurrence.

Knowing CPR is not only an incredibly useful skill, but even if you never have to use it, it can look great on your resume, and knowing it may even be required by your gym.

You can learn CPR by visiting Red Cross website and finding a local class:


Each client success story creates personal happiness and opportunities for you in the form of referrals, and chances to grow your clientele.

The three recommendations above, can put your career as a personal trainer on the right track. Becoming a personal trainer is an excellent business opportunity for those who are truly committed to it.


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