In this day and age, it is very important for club owners to be proactive and take measures that will help prevent insurance claims and limit the club’s liability if a claim should be filed. Taking action before an incident occurs will mean that you – and your club – are ready when and if something happens.
It’s a scenario every small business owner fears: losing everything you’ve worked so hard to build because of circumstances that are beyond your control. This is why club owners and insurance companies work so hard to anticipate risks and prevent injuries from happening to members and guests. While it may be impossible to think of everything that could go wrong, there are some things you can do to minimize your liability and your risk.
First, take an inventory of your club’s insurance policy and the coverage you already have. Start by reading over the policy and jotting down any questions that come to mind. Highlight any sections of the policy that you don’t understand. Then, take a look around the club. Since nobody knows it like you and your staff, you are the best ones to determine high-risk areas. Make a list of anything you notice that could possibly increase the risk of injury, and also include any observations or recommendations made by staff members.
Once you’ve taken a close look at where you stand, schedule a time to meet with your insurance provider to go over each of these items. Don’t be afraid to ask questions – that’s what this meeting is for! If you don’t understand something, keep asking questions until you do, and once you have an answer that makes sense, write it down and keep it in your insurance file. This simple trick can be an invaluable tool, helping you to more clearly understand your club’s insurance coverage and giving you peace of mind. However, just because you’ve met with your insurance provider doesn’t mean you’re off the hook! Dwight Conder, Director of Business Relations for Urban Active, does an annual loss prevention review that includes a meeting with the company’s insurance provider, and site visits to several locations. He also recommends keeping the lines of communication open all year long so you have a good working relationship with your provider.
WHAT YOU CAN DO NOW TO MINIMIZE RISK
Your insurance provider should give you some ideas on how to prevent injury and minimize risk that are tailor made for your club, but here are some things you can do now on your own:
1. Use technology to help you keep track of who is in the facility. By having every member and guest sign in at the front desk, you can avoid getting into a situation where someone is using your facility without having signed a fitness waiver (which should be built into the sign-in sheet used by guests). Urban Active uses a key tag with a barcode, which is scanned at the front desk and is linked to a photo that is taken of members when they sign up and used only for identification purposes.
2. Limit your exposure to child-sensitive issues. Don’t allow anyone but a parent or guardian to drop off a minor in your kids area, and set up a system to prevent parents and guardians from leaving the building without the child. In addition, Glynne Simpson, President of Sports & Fitness Insurance, advises club owners to maintain a one to four ration of adults to kids in the children’s area at all times.
3. Fluorescent striping can help make steps more visible, which can prevent injuries related to tripping and falling.
4. Invest in security cameras and an alarm system that is tied to a third party for supervision. This can prevent theft and also gives you the ability to protect yourself from enterprising individuals who might pretend to be injured just to collect an insurance payout.
5. According to Lisa LaGanke, Area Director for Healthtrax Fitness and Wellness, they develop an annual business plan for safety initiatives, and you can do the same in your facility. Use this as a chance to address any liability issues that come up during meetings with your insurance provider, and get staff involved by making them aware of your concerns and asking them to come up with addtional suggestions for ways to make your club safer.
6. Every club should have an incident reporting system, and all staff members should understand the importance of following the system. Any time something happens that could in any way put you at risk for a claim, it should be written down immediately by the staff member(s) who witnessed the incident or received the complaint. Next, this information should be rapidly forwarded to the person in charge of deciding what to do next (have a back-up plan in place in case that person is not available). Conder calls Urban Active’s insurance provider to discuss any incident that involves serious injury. When it comes to deciding what to report, the old saying ‘better safe than sorry’ is a good rule of thumb. Some insurance coverage is voided by a club’s failure to report an incident, so taking the time to really understand your policy can help you avoid costly situations.
7. Set up a maintenance program for equipment. Having a person on staff who is dedicated to club maintenance is ideal, but if that’s not realistic, develop a plan to perform routine maintenance and to address the many surprises that can come up. Hiring a part-time or on-call maintenance person, or having someone on staff who is cross trained to do routine maintenance are two options for clubs with smaller budgets. If you bring in contractors, make sure they are certified and insured, and consider assigning someone to observe them while they work. Not only does keeping the equipment well maintained minimize the risk of liability, but it also keeps your club looking good and your members happy.
8. Evaluate your new member orientation program. This is a great opportunity for questions to be answered and proper usage to be taught, so make sure your staff is getting the most mileage out of this one-on-one time with members.
9. Assign a staff member on each shift to be responsible for keeping aisles clear, pathways unobstructed, and free weights on the racks where they belong. Ken Reinig, Senior Vice President of Association Insurance Group, lists maintaining a clean, clutter-free workout environment as one of the most important things club owners can do to prevent injury.
10. Provide members and staff with easy accessibility to towels and disinfectant that is designed to kill MRSA and other harmful bacteria. Implement a cleaning schedule and set up an accountability system for staff members so it’s easy to keep track of.
11. Strategically post signs regarding health and safety practices in prominent locations around the club so members know what is expected of them. All equipment should have use instructions posted on or near them.
12. Reinig also stresses the importance of making sure all staff members are up to date on ways to ensure safe practices in the club. He says that club owners with employees who are trained to recognize when a member is doing something unsafe and work with them to demonstrate better technique or get them to slow down, seem to have fewer incidents. Also, consider training someone on each shift how to administer CPR and use AEDs, which should be readily available. Implement testing procedures to gauge the readiness of staff, and give rewards for high performance.
13. Conduct an annual loss analysis, reviewing the number of incidents that were reported, their severity, and how you can reduce the number of similar incidents in the future. For example, Healthtrax noticed a high number of eye injuries on the racquetball court, which was drastically reduced when they implemented a policy requiring players to wear goggles.
14. Run criminal background checks on all employees before they are hired, especially if they are going to be around children. Also, require any employees who regularly engage in physical work to have a physical by a medical doctor. Finally, if an employee is fired or quits for any reason, they should be asked to surrender all keys and leave the club immediately. Ex-employees should no longer be allowed into restricted areas, and should be required to sign in just like every other member.
15. Take a close look at specialty areas. Simpson says pool and sauna floors should be free of standing water at all times, and that chemical testing should be done hourly. Safety equipment should always be on hand, and a life guard is ideal. Diving boards and water slides present additional exposure to risk, so think it through before adding these items. In addition, tanning beds should be equipped with timers that are controlled by attendants, and signs concerning proper usage should be prominently posted. Everyone who tans should be required to sign a special waiver, and no one should tan more than once a day.
WHAT YOU SHOULD KNOW ABOUT YOUR INSURANCE POLICY
When shopping for an insurance provider, make sure to choose a company that works well with you. Don’t be afraid to shop around and ask questions – the more you know, the better! Here are some important points to help you understand some of the things you should look for in an agent, and in a policy:
1. Since insurance can be confusing and complicated, Reinig recommends working with an agent who is experienced in the health club industry.
2. Every club owner should have at least these three types of insurance: general liability insurance that also includes professional liability coverage to protect against lawsuits, property insurance that covers your investment, and workers compensation insurance because it’s the law. After that, you should carefully consider other areas like employment practices liability to protect the owner of the company from being sued by an employee, and key person life insurance to protect your company’s solvency in the event of losing a key employee or founder.
3. Simpson cautions club owners to purchase insurance only from companies that are admitted carriers in the state where their business is located. Also, ask to see the company’s ratings and accreditation, then follow up on your own by doing an Internet search on the company. A.M. Best is one of the oldest ratings companies for insurance.
4. Simpson says property insurance should be written on a special form with replacement cost value, which states the amount that the insurance company would have to pay to replace your assets. Also, you can choose to attach business interruption or business income coverage, which provides income to you in the event that your business is interrupted by a situation that is covered under your policy. The key here is to have a clear understanding of how a “cause of loss” is defined in your policy.
5. According to Simpson, one of the biggest mistakes club owners make is not taking the time to fully understand the types of insurance that are available, and not filling out the application properly. Even if a question seems over the top, ask about it before deciding not to answer. In addition, be sure to give accurate figures when giving gross receipts and the percentage of income your club receives from each income stream (membership, tanning, pro shop, etc.). It’s also very important to make sure you understand how the policy asks you to value your personal property, like equipment. Making sure all of these things are filled out properly and accurately could wind up saving you money.
6. Ask if your policy has a built-in exclusion for athletes. This is a common exclusion on many general liability policies, so make sure you are covered.
7. Consider where your club is located, since different geographical areas pose different insurance needs. Clubs in coastal areas should ask about flood and wind coverage, for example.
8. If your club provides off-premises events or boot camps, Reinig cautions owners to ask if their policy covers this type of activity. Many policies are limited to the four walls of the club, which can put you at risk when it comes to club-sponsored outside activities.
While all of this may seem daunting at first, it’s a necessary evil in today’s world. By taking control and being proactive when it comes to your club’s insurance coverage, you can help make sure that an unfortunate accident or injury doesn’t hurt your bottom line. –
INSURANCE RESOURCES:
Association Insurance Group www.clubinsurance.com
Fitness & Wellness Insurance www.fwidirect.com
Sports & Fitness Insurance www.sportsfitness.com
