STUDIO NOIR · Insurance

Phase 1: focused coverage package via one RDU broker. Roughly $550/month all-in.

Phase 2 flagship: full 8-coverage stack via Marsh McLennan Raleigh or Aon.

1. Phase 1 insurance strategy

Small business, small footprint, single location, no W-2 employees. But real risks: pole is high-injury, members can hurt themselves, property damage possible.

Approach: one broker, focused coverage, adequate limits for Phase 1 scale.

Broker of record Phase 1: local RDU commercial insurance broker with fitness/hospitality experience. Interview 3 brokers, retain 1.

Carriers: A-rated (AM Best A or better) only.

2. Phase 1 coverage stack

Coverage 1: Commercial General Liability (CGL) + Participant Liability

Purpose: covers third-party bodily injury and property damage on the premises. Slip in the lobby. Member injured on a pole. Guest injured in the studio.

Limits Phase 1: - $2M per occurrence - $4M aggregate

Participant liability rider (critical for pole studio): - Covers claims arising from members participating in classes - Standard fitness industry rider - Included in CGL premium

Estimated Phase 1 premium: $250-$400/month

Coverage 2: Property Insurance (renter’s, since we lease)

Purpose: covers our buildout, equipment, small merch inventory against fire, theft, water damage.

Limits Phase 1: - $60,000-$80,000 replacement cost (matches Phase 1 buildout value) - Deductible: $1,000-$2,500

Estimated Phase 1 premium: $50-$100/month

Coverage 3: Business Interruption Insurance

Purpose: covers lost revenue if we have to close due to fire, water damage, or other covered event. Important because a 3-month closure at Phase 1 would break us.

Limits Phase 1: - Coverage for 6 months of gross revenue and fixed costs - Roughly $60K-$100K coverage limit

Estimated Phase 1 premium: $50-$100/month

Coverage 4: Cyber Insurance

Purpose: covers data breach of member information (names, medical disclosures, payment info). Small business version.

Limits Phase 1: - $250K-$500K coverage - Deductible: $2,500

Estimated Phase 1 premium: $30-$50/month

Coverage 5: Business Umbrella (optional Phase 1)

Purpose: provides an additional layer of coverage over CGL and property in case a single incident exceeds primary limits.

Limits: $1M umbrella (recommended even for Phase 1)

Estimated Phase 1 premium: $100-$150/month

Coverage 6: Workers’ Compensation

Not needed Phase 1. No W-2 employees. Contract instructors carry their own liability insurance (verified at contract signing).

Note: if we ever hire a W-2 employee (even one), NC requires workers’ comp coverage. That would add $50-$150/month depending on wages.

Coverage 7: Directors & Officers (D&O)

Optional Phase 1. Protects Taj and Trill (as Managers) from personal liability for management decisions.

Limits: $1M

Estimated Phase 1 premium: $75-$125/month

Recommendation: hold off Phase 1. Add if we ever bring on outside investors (Phase 2) or if a specific risk emerges.

Coverage 8: Employment Practices Liability (EPLI)

Not needed Phase 1. No W-2 employees, no meaningful employment practices exposure. Add Phase 2 when we hire.

3. Phase 1 total insurance cost

Roughly $7,400/year. Budgeted at $550/month in 05_FINANCE (slightly conservative). Adjust as needed after broker quotes.

Optional additions if needed: - D&O: +$100/month - Workers’ Comp (if hiring): +$75-150/month - EPLI (Phase 2): TBD

4. Phase 1 broker retainer

Interview 3 RDU commercial insurance brokers with fitness/hospitality experience: - Marsh McLennan Raleigh office (large firm, may deprioritize small Phase 1 policy) - HUB International Raleigh (mid-market, good fit) - Local Triangle boutique broker (recommended for Phase 1 attention)

Broker earns commission from carriers (typically 10-15% of premium). No direct cost to us Phase 1.

5. Phase 1 certificate of insurance (COI) management

When landlord, vendor, or a corporate wellness prospect asks for a COI, broker issues one within 24 hours. Standard Phase 1 requests: - Landlord’s COI (adds landlord as additional insured) - Cleaning service COI (typically bidirectional) - Any event or partner requiring COI

6. Phase 1 claims process

If an incident happens: 1. Trill notifies broker immediately (within 24 hours) 2. Broker files claim with carrier 3. Carrier assigns adjuster; STUDIO NOIR cooperates fully 4. If lawsuit filed, Smith Anderson defends (covered by CGL) 5. Trill and Taj do NOT comment publicly on the claim

Full claims protocol in 07_OPERATIONS/02_SAFETY_LIABILITY Section 8.

7. Annual insurance review

Every year at renewal: - Broker walkthrough of the studio - Review of prior year claims and incidents - Rebenchmarking premiums against carrier options - Adjust coverage limits based on business growth - Renew for another year

Timing: 60 days before renewal date.

8. Phase 2 insurance stack (preserved for reference)

Phase 2 flagship gets a fundamentally larger insurance package. Preview:

Phase 2 coverage stack

1. Commercial General Liability (CGL) + Participant Liability
   • Limits: $5M per occurrence, $10M aggregate
2. Professional Liability (Errors & Omissions)
   • Covers claims from PT/coaching guidance
   • Limits: $2M per occurrence
3. Property Insurance
   • Covers full Phase 2 buildout, equipment, retail inventory
   • Limits: $3M-$5M
4. Business Interruption
   • Covers 12 months of revenue and fixed costs
5. Cyber
   • Increased limits for Phase 2 CRM + member data volume: $2M-$5M
6. Business Umbrella
   • $5M-$10M excess
7. Workers’ Compensation
   • Required for all W-2 employees (Phase 2 adds GM + Director MX + all leadership + full-time staff)
8. Employment Practices Liability (EPLI)
   • For W-2 employment claims
9. Cardiac/Recovery Specific Riders
   • For sauna and cold plunge specific risks
   • Required because Phase 2 amenities have distinct high-risk profiles
10. D&O
    • Protects Managers + any board members from outside capital
11. Cyber-privacy rider
    • For biometric intake (if any) and expanded member data
12. Special Event Insurance
    • For THE NOIR INVITATIONAL (broadcast events)
    • Renewed per event

Phase 2 broker

Marsh McLennan Raleigh office (primary) or Aon Raleigh (backup). Fitness and hospitality practice depth required.

Phase 2 estimated annual premium

Rough estimate: $120,000-$200,000/year total for the full stack at Phase 2 flagship scale.

Full Phase 2 insurance stack rebuilt in 2028 alongside Phase 2 buildout, hiring, and capital raise.