Liability within the club can start on the front steps. Ed Trainor, the vice president of fitness services and product development for Town Sports International (TSI), said liability is everywhere within a club. “People are coming in to exercise and not all of them are fit,” he said. “Many have health issues that cause us to be open to liability.” People enter into the club and may have preexisting conditions that can be intensified by excessive exercise. The objective for the club owner is to prevent liability by being up-to-date on risk management.
What You Must Know
Anyone highly involved with a fitness club is taking on great risk each day — you need an understanding of everything to minimize your liability and protect your assets.
According to Josh Harwood, the senior vice president of Titan Fitness/Gold’s Gym Franchisee, clubs must understand that injuries can occur to members, non-members and staff. They have to know billing, physical damage and labor management. If club owners don’t understand these basic principles, they need to find someone that does.
Hardwood has broken his strategy for understanding risk management into four basic components. His first section begins with research. “At the time you are writing the checks for invoices surrounding your research, you may question the ROI on this out going money,” he said. “However, if you have ever had to face the consequences of not operating as you should, you know this money is well invested. You should research items such as what are the rules around selling memberships and services in your area, what constitutes a safe work environment, what are PCI requirements, what would be the replacement cost of my fixed assets and how should my employees be paid.” This research can provide you with an extremely high amount of useful information.
“Maintain your equipment and building to provide a safe customer experience and work environment for your staff,” Hardwood said. “Maintain your accountability on how you do business; ensure the strategies you came up with to address the issues uncovered in the research are actually being followed.”
Following the research and maintenance, clubs must keep up on education and changes within the legal system that can occur daily. “Educate your members on how to safely operate the equipment,” Hardwood explained. “Educate your staff on how to report incidents, how to act during incidents and how to manage other staff.”
Finally, don’t put off researching, educating and maintaining a quality insurance policy. “It is advisable to get quotes from several sources,” Hardwood said. “Before you do this, make sure the sources state ahead of time the insurance companies they will work with so you truly get competitive pricing and view point on what are your needs.”
Clubs need to look at other forms of “insurance” policies if they haven’t already. Hardwood said, “It would be good to have good legal counsel and human resources staff/consultant to help navigate issues when they arise or manage items like compensation plan design, hiring practices and ‘hot lines’ that can be used to limit risk with intra-staff issues.”
There Are Going to Be Injuries
How do you decide whether a club is liable if a woman who has worn high-heels all day comes into your club after work and injures her Achilles Tendon on the club’s treadmill? Trainor said that TSI and many other clubs are working hand in hand with the manufacturers to avoid those situations. “The manufacturers are doing a great job at making reliable machines,” he explained. “With technology, clubs are able to dispute incidents that happen on pieces of equipment.”
One idea that has given gyms an advantage in the courtroom has been the implementation of a “little black box” inside cardio equipment. Trainor said that the boxes are much like the ones used on airplanes. They allow the club owner to verify the time and possible situation the member was in when they claimed their injury. This is a way that manufacturers are working with clubs to minimize the clubs liability involving accident claims by members.
Shawn Stewart, the operations manager for Gainesville Health and Fitness Clubs (GHFC), said that the most common issue among clubs is safety issues concerning equipment, human error and injuries.
“Most clubs are susceptible to liability issues regarding safety of equipment,” Stewart explained. “The average member begins a workout program with little or no previous experience. People will see exercise on TV or being performed by a trainer and will try to emulate it. A faulty piece of equipment is another way for a user to get injured.”
Clubs must have a way to protect themselves from post injury-type situations. “Health clubs face many risks that other businesses don’t see,” said Roxie Denning, CISR, director of operations for Fitness Underwriters. “When it comes to health clubs, claims and injuries are not uncommon. Personal injury claims are the most frequent. Proper documentation of the claim and filing the claim immediately with the insurance carrier is the best form of protection.”
Furthermore, Trainor suggested that clubs pay close attention to the members following in-club injuries. By giving the injured member attention it can diffuse any possible legal ramifications in the future.
Maintaining the Equipment
If clubs can maintain equipment, they can prevent more issues that were discussed in the previous section. “We have a multi-step process to minimize our liability,” Stewart said. “Every area should have a ‘Safety and Risk Management’ check list. This should include regular preventative maintenance on equipment as well as a system to properly place all equipment in a safe manner.”
Clubs must be at the forefront to stay out of litigation. “In our current legal environment, clubs need to have regular and routine inspections and maintenance procedures; this includes both housekeeping and equipment,” said Lance Breen, the claims litigation analyst for K & K Insurance. “It should be systematic, daily and intricately embedded in daily operations. The club should have written procedures and policies. Inspection and maintenance logs should be used and retained.” Bobbie Simpson, the chief legal counsel for Sports & Fitness Insurance Company, suggested that clubs focus primarily on keeping bathroom areas clean and dry, as well as keeping equipment in great working order.
“Clubs need to train their staff to effectively monitor club areas and equipment; and use a written logging system when cleaning or maintaining the facility or equipment,” said Cheryl Meyers, the underwriting manager for K & K Insurance. “Making every employee accountable to these evaluations and discussions is an important component in controlling and managing risk.”
Managing Computer Data
Things have changed in recent years and we must now protect, guard and manage member credit card and identification information and many other member, staff and non-member information, digitally. All this information has different levels of security and laws that are imperative for a club owner or operator to know.
“The first thing to be aware of is exactly what data you have and where it is stored,” said Andy Irish, the director of security for Twin Oaks. “You can’t protect data that you don’t know about. Take an inventory of every place you keep sensitive information. Use that list as the starting point for planning your security initiatives. Don’t forget your paper records.”
“From day one, it is much easier to implement data systems,” said Mark Plewa, the vice president of sales and marketing for Affiliated Acceptance. “They don’t have to rebuild a mold. Just because the tools and resources are obtained doesn’t mean the club is compliant. This isn’t a one-time shot. You have to have someone keep up on the constant changes with laws.”
Irish said that the biggest place for a club to start is the PCI-DSS (Payment Card Industry Data Security Standard). “If you can demonstrate PCI compliance, then you have taken an important step towards securing your data,” he explained. “Make sure that your vendors are also keeping up with the current security standards.
“Any club that takes credit cards is subject to the PCI-DSS. Also, many states now have laws regarding personal and private information. Laws vary by state so each club should check with the consumer protection office or an attorney knowledgeable in this area to determine what the club’s responsibilities are toward sensitive data.”
Clubs must protect member data to make sure their clubs are protected from prosecution. “The process to get PA-DSS (Payment Applications Data Security Standard) validated can take companies months to be compliant,” Plewa said. However, clubs have the ability to offload this tedious task of compliancy to companies that specialize in data security. The sooner a club gets validated, the sooner it will boost its bottom-line and clear itself from possible prosecution.
New Laws on AED
This is relatively new, but an important aspect of Risk Management. In fact, this particular law that has been implemented in many states could be life or death, both for the member and the club.
“AEDs are becoming the new minimum of standard care, and many clubs outside of these states are also keeping AEDs on hand,” explained Paul LeBlanc, the founder and owner of Zogics a distributer of Philips AEDs. “The risk of a cardiac event is as much as 15 to 20 times higher during, or immediately following, vigorous exercise. Each year, about 350,000 Americans die of sudden cardiac arrest outside of a hospital, and it’s been estimated that if AEDs were widely available, as many as 50 percent of those stricken might have survived.”
AEDs can often be overlooked by club owners, especially since a lot of owners may have never seen the need for one. “It is essential to make safety and risk management a part of your club’s internal operations,” Denning said. “Club owners and managers should discuss risk management issues during regular staff meetings.”
LeBlanc added, “Any health club that does not have an AED, even in states in which doing so is not a statutory obligation, runs the risk of being seen as acting with indifference to the welfare and safety of its patrons and either negligent or grossly negligent for any deaths that may result from a cardiac event. That was a message handed down in 2008 by the Cook County Circuit Court in Fowler v. Bally Total Fitness.”
Risk management may be the life and death of the club. There isn’t a need to put off learning about ways to avoid litigation and liability lawsuits. Take the time and research about insurance companies, member data protection and AED providers to make sure your club isn’t shut down and discussed negatively for years to come. -CS