Business owners in the fitness industry have unique risks that could result in financial loss if not adequately protected. This blog outlines three unique coverages for gym and studio owners, which can be included on a small business insurance policy.
1. Professional Liability
As a gym or studio owner, you or your staff probably consult, coach, teach, or offer personal training services to your clients. Even if it is as simple as how to properly use a machine, execute a particular exercise, or if you teach a group class, these actions can present a unique exposure that we in the insurance industry term ‘professional liability exposure’. What this means is that you could be faced with a lawsuit if a client is injured and alleges that the injury was caused as a result of you or your staff’s guidance.
A quick scenario: One of your staff is onboarding a new client and is showing them how to properly use each piece of equipment. A couple of weeks later, the client seriously injures her back on one of the machines. Two months later, you are presented with a lawsuit seeking financial damages due to lost wages, medical expenses, and pain and suffering.
What is important to know about this risk is that professional liability is specifically excluded in a traditional general liability or small business policy. Fortunately, this coverage can be added by endorsing the coverage on to your policy. You can make sure it is present by checking the General Liability declarations page of your policy.
Can a liability waiver protect you? It depends and may be used as a tool in your defense. What is important to know is that if you have professional liability coverage on your policy, your insurance carrier can step in and defend you against such claims, paying for attorney fees. If you do not have this coverage, they may not.
2. Sexual Abuse or Molestation Liability
First, I can understand that you may think a claim alleging sexual abuse or molestation could never happen at your business. While you may believe that this could never happen at your business, the fact is, this exposure does exist, regardless of your intent. Not only does this risk present a significant financial exposure, but the ensuing reputational damage in the community can be severe.
When is it particularly important to include this coverage? When your business works with children or minors, such as offering classes, or if your business offers daycare services. If you own or operate a dance, martial arts, or gymnastics studio, it is crucial to have this coverage in place.
It is also important to note that there are several things you can do as a business owner to help mitigate this risk, particularly when it comes to working with children. In fact, insurance carriers will expect protocols like these to be in place when underwriting your account:
- Always have, at minimum, two staff members present when working with minors or children.
- Have clear documentation on employee assignments and schedules.
- Perform criminal background checks on all employees.
- Have video cameras set up to monitor and record common areas in accordance with applicable law.
3. Coverage for Guests’ Personal Property
If you offer locker rooms or cubbies for your clients to store their personal belongings, then you may be implicitly assuming responsibility for the care of their property. In the insurance industry, coverage for this exposure is called ‘Personal Property of Others’, and may or may not be included in a small business policy. In addition, depending on the size of your business, your policy may not offer adequate limits if there is a significant event like a fire or water damage to your premises. Therefore, it is important to work with your insurance agent to evaluate how much coverage you should carry to properly protect the property of your guests.
Some policies enhance this coverage by extending it to guests’ vehicles in the parking lot, which can be beneficial. No one likes returning to their car to find a big dent or scratch. A guest could allege that your business is at fault for the damage. Having this additional coverage can be helpful in quickly resolving a potential dispute and extending goodwill to your clients.
These are three common coverages that businesses in the fitness industry should consider having on their policy. These are not the only three, however. To ensure your business is properly protected, it is important to have your insurance needs evaluated by an independent insurance agent who can help you craft a program that is designed for your business. To find an agent near you, use our agent locator.
Acadia Insurance is a regional insurance carrier that offers business insurance solutions to businesses located in the Northeast. Our AcadiaFit insurance program is crafted specifically for gym and fitness studio owners. To learn more about AcadiaFit, visit http://acadiafit.acadiainsurance.com.
Acadia Insurance is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness.