Insurance Considerations for Fitness Professionals

When was the last time you took a hard look at the risks your business faces and the systems that you have—or don’t have—in place to safeguard yourself when disaster strikes? Investing time now to ensure you are taking adequate risk management precautions can bring you major savings, in both time and money, if an unexpected event occurs, such as a client lawsuit, an injury or an equipment breakdown.

Not sure what kinds of risk your training business exposes you to? In this article you’ll learn how to manage the most costly risks to your business and how to stay ahead of the risk management curve as your business grows.

Common (and Costly) Risks That Plague Fitness Professionals

While operating your business with reasonable care goes a long way toward ensuring the safety of your clients and assets, remember that accidents can happen to even the most diligent trainers. Plus, the longer you’re in business and the more clients you serve, the greater the chances of an accident.

Read on to understand some of the most prominent risks that personal trainers face.

Client Injuries
Despite your best efforts to encourage proper form and get your clients to use reasonable weight, eventually someone will veer away from your guidance and get hurt. The odds of that happening increase as the number and independence of clients increase. Even if you serve clients strictly one-on-one, an injury can happen. New clients run the risk of overextending themselves and ending up hurt. Older exercisers are especially susceptible to such injuries. And don’t forget that clients who are inexperienced in gym settings can do more than just strain a muscle: dropping weights, knocking over equipment and falling off machines are all potential sources of injury.

Here are the most basic ways to minimize client injury risk:

• Invest time in safety training for every new client.
• Post signs throughout the facility about proper handling and use of equipment.
• Establish a rapid response system for when injuries occur.

In addition, a general liability insurance policy will cover the costs of an injury-related lawsuit (including damages and attorney’s fees) if a hurt client initiates one.

Equipment Damage
Whether you have a gym full of machines or a select few pieces of gear in an office, you rely on your equipment to serve your clients. Repair and replacement can be costly, and the more clients you serve, the greater the chances that something will malfunction. Even worse: Unexpected equipment breakdowns can lead to downtime, forcing you to lose income from clients you’re unable to serve.

In addition to normal equipment wear and tear, consider the potential for theft or storm damage, which exists for everyone (though the latter may vary considerably by geographic location). Equipment damage and theft are fairly straightforward risks to protect against. Investing in adequate property insurance can ensure that you have access to the funds you need to quickly repair or replace gear when something goes wrong.

Personal or Employee Injury
The risk of on-the-job injury is real. Injuries can happen when employees help a struggling client, rearrange equipment and load or unload machines—or if they simply trip over loose carpet. If you or your employees teach classes, those risks increase. Sure, you understand how to maintain proper form, but even the most experienced trainers get tired and have “off days.”

The costs of treating a work-related injury—including doctor’s bills and prescriptions—can be significant. And if the injury forces you or one of your team members to miss work, the expenses mount fast. In addition to covering an employee’s lost wages, you’ll likely have to hire a replacement to avoid losing revenue from a canceled session or class.

Manage these costs by purchasing workers’ compensation insurance, a type of coverage required in many states for any business that has employees. In the event of a work-related illness or injury, workers’ compensation insurance can cover the medical expenses related to treating the injured party and can pay the wages that the employee is unable to earn while injured or sick.

Advice-Related Injury
Whether your training practice includes strictly fitness-related work or a combination of fitness and nutrition advice, the suggestions you provide your clients expose you to liability if what you advise leads to an injury or a financial loss. For example, if you recommend a certain nutritional supplement, and consuming it lands a client in the ER with an allergic reaction, that person could sue your business for the medical costs. Or if you suggest exercises for a client to perform between sessions, and one of the moves (perhaps executed improperly) leads to a pulled muscle or a joint injury, you could face a lawsuit related to treatment expenses and even associated damages.

While such lawsuits are relatively rare for fitness trainers, they can be wildly expensive; there’s no telling, for example, how a court might value someone’s losing the ability to perform favorite activities. Protect yourself with errors and omissions insurance, which funds the costs of lawsuits related to a trainer’s professional advice.

Make Sure You’re Really Covered

The good news is that many fitness trainers are savvy about the risks their business faces. The bad news is that a few myths about risk management offer a false sense of security about liability. Make sure you’re aware of the truth behind these three widespread myths:

• Myth #1: Liability waivers have me covered. While most fitness facilities and trainers now require clients to sign waivers, case law has been inconsistent about how these waivers are enforced in the event of a lawsuit. Work with an attorney to understand what makes a waiver work and how insurance can reinforce the waiver’s effectiveness.
• Myth #2: My personal assets are safe. Many fitness pros mistakenly believe that their personal assets can’t be targeted in lawsuits against their business. But depending on the tax classification of the business, that’s not always the case. If your business is structured as a sole proprietorship or a partnership, your personal assets (home, car, savings, etc.) could be seized to cover damages assigned in a lawsuit against your business. Having business insurance is one way to safeguard your personal assets against business lawsuits. The insurance policy pays the costs associated with legal action, removing the need for you to dip into your personal funds.
• Myth #3: My clients wouldn’t sue me. Many trainers think that if they’re careful enough, they don’t need insurance. In reality, lawsuits are more a reflection of the personality or financial circumstances of the client who brings suit than of the trainer who’s targeted. Think about it: If clients get injured after overdoing a workout and have to pay for months of physical therapy or rehab, there’s a good chance they’ll be grumpy about the expenses. Factor in the loss of endorphins from being sidelined from workouts, and conditions are perfect to trigger lawsuits from otherwise perfectly happy customers.

Protect Your Revenue and Business Assets by Managing Your Risks

You know that a healthy body is better able to handle stresses than a sick body. A business is the same way. By implementing savvy risk management measures, you strengthen your business’s defenses against the risk factors that threaten it on a daily basis. You maximize its ability to survive and thrive in the long term.