Risky Business – Limiting Liability At Your Club

Everything in a club is designed to help improve members’ health but, in undesirable conditions, the equipment, staff and areas inside a gym can also potentially bring them harm through improper use, injury or mismanagement. As a club owner or manager, you are ultimately responsible for what happens at your club, even if the club is not to blame for the occurrence. Preventing unnecessary risk will save you time, money and headaches in the long run, says David Carney, vice president of Operations for Lifestyle Fitness. “We focus our efforts on understanding the ‘riskier’ areas of our facility operations and ensure that the likelihood of an accident is minimized as much as possible. Providing a safe workout and working environment is top of mind.”

RISKS ON THE FLOOR
The potential for injury and accidents exists at any business, but those risks are higher in a health club environment, where at any given moment several people are engaging in physically strenuous behavior, using heavy equipment and interacting with machines. If a club has wet areas-such as a pool or sauna and locker rooms-the chances of accidents due to slipping and falling are even greater. “In a retail business, the odds of someone dropping a 100-pound dumbbell on their foot or their head are slim to none,” says Eric Casaburi, CEO and founder of Retro Fitness.

There are several things you and your staff can do to regularly prevent accidents at your club. Routine checks of all areas and systems are crucial, suggests Tom Ademite, executive director of Enterprise Insurance Advisors, which coordinates coverage at Anytime Fitness locations. Pay special attention to weight equipment areas, cardio machines, sprinkler systems, Automated External Defibrillators (AEDs) and fire extinguishers. Managers and staff should also make sure all floors are free of clutter from misplaced weights, equipment and accessories. “Address risks in a timely manner,” Ademite adds. “The key to risk prevention is early identification.”

No matter how much you work to prevent accidents, injuries and scenarios that could result in lawsuits, unforeseeable problems can still occur for which your club may be held liable. Limiting your liability through the proper insurance coverage is the best way to make sure your business remains solid, regardless of circumstances.

COVERAGE AND PROTECTION
To meet basic coverage needs, health clubs need to have general liability insurance that includes professional liability coverage for wrongful termination and harassment claims from employees, property insurance to cover the facility and its contents, loss of business income protection and worker’s compensation insurance, according to Ken Reinig, senior vice president of Association Insurance Group, which works exclusively in the health and fitness industry. “This is a basic package of coverage that is necessary to protect the club owner from losses to their business property, financial loss of revenue if they are shut down and to protect them if they are sued,” Reinig adds.

Other kinds of coverage to consider or ask an agent about include abuse and molestation insurance to cover daycare areas, umbrella insurance for excessive liability coverage and a surety bond, required in some states in order for clubs to collect up-front fees. You should also look into special coverage that may be needed for tanning bed areas, Ademite advises. There are a lot of insurance agencies in the marketplace looking to add health clubs to their list of clients. It’s up to you to read in between the lines to see if what it’s offering can and will meet your needs.

Casaburi advises all clubs to seek coverage from an agency with experience working specifically in the fitness industry. These companies or agents are most familiar with the unique exposures of a health club to risk and liability. Once you have found an agency you trust, communicating any questions or concerns to them will help you understand your coverage, legal commitments and limit your overall liability.

If and when an incident does occur, it is important to notify your insurance provider immediately, says Jennifer Urmstrom, national account manager at Sports & Fitness Insurance Corp. “Complaints should be handled professionally and courteously and addressed or corrected promptly,” she added. “It is important to report claims immediately so that the carrier can address the demands before a law suit is filed if possible.”

STAYING COMPLIANT
Finding insurance that protects all areas of your club, as well as the actions of employees and members, is a good first step toward successful risk management. To keep your business safe and in compliance with safety laws requires continuous hard work by managers and staff who are mindful of reporting incidents and responding to emergency situations. All employees should be trained on best practices and how to respond if a member comes to them with a complaint or reports an injury. They should know your club’s emergency response procedures and should be regularly tested to ensure compliance. Anyone working in a special area, like tanning or daycare, should receive instructions expressly designed for risks associated with that area.

At Lifestyle Fitness, staff members get both face-to-face and Web training on how to handle emergencies and complaints, Carney says. All staff members are trained in CPR and know how to use an AED if a member experiences cardiac arrest. Having AEDs in your facility is required by law in as many as 13 states, says Tom Kuelbs, marketing director for manufacturer HeartSine Technologies. Laws are in place requiring the units to be fully operational at all times and releasing others from liability should they use an AED on someone experiencing cardiac arrest. Some clubs report that these potentially life-saving devices can be especially critical at 24-hour gyms, where management may not be present during a medical emergency, according to Glen Jasper of ThinkSafe, Inc., a HeartSine dealer that works directly with health clubs.

Keeping members mindful of safety through education and monitoring is another way to reduce the risk of injury. A perfect time to touch on the subject is during the orientation process, Carney suggests. Members should be offered proper orientation, fitness screenings and training on all the equipment in the club from a personal trainer.

Another way to limit liability is by providing antibacterial wipes and solutions to prevent the spread of disease and posting clear signage regarding any particular health risks. At Retro Fitness locations, management is meticulous on providing this type of information to reduce risks and keep members educated about safe usage of the club’s services, according to Casaburi. Keeping members informed is one of the best ways to be proactive about risk management at your club and avoid accidents before they happen.

Loss Prevention Checklist

Property Claims:

Worker’s Compensation Claims:

INDUSTRY RESOURCES:

Everything in a club is designed to help improve members’ health but, in undesirable conditions, the equipment, staff and areas inside a gym can also potentially bring them harm through improper use, injury or mismanagement. As a club owner or manager, you are ultimately responsible for what happens at your club, even if the club is not to blame for the occurrence. Preventing unnecessary risk will save you time, money and headaches in the long run, says David Carney, vice president of Operations for Lifestyle Fitness. “We focus our efforts on understanding the ‘riskier’ areas of our facility operations and ensure that the likelihood of an accident is minimized as much as possible. Providing a safe workout and working environment is top of mind.”

RISKS ON THE FLOOR
The potential for injury and accidents exists at any business, but those risks are higher in a health club environment, where at any given moment several people are engaging in physically strenuous behavior, using heavy equipment and interacting with machines. If a club has wet areas-such as a pool or sauna and locker rooms-the chances of accidents due to slipping and falling are even greater. “In a retail business, the odds of someone dropping a 100-pound dumbbell on their foot or their head are slim to none,” says Eric Casaburi, CEO and founder of Retro Fitness.

There are several things you and your staff can do to regularly prevent accidents at your club. Routine checks of all areas and systems are crucial, suggests Tom Ademite, executive director of Enterprise Insurance Advisors, which coordinates coverage at Anytime Fitness locations. Pay special attention to weight equipment areas, cardio machines, sprinkler systems, Automated External Defibrillators (AEDs) and fire extinguishers. Managers and staff should also make sure all floors are free of clutter from misplaced weights, equipment and accessories. “Address risks in a timely manner,” Ademite adds. “The key to risk prevention is early identification.”

No matter how much you work to prevent accidents, injuries and scenarios that could result in lawsuits, unforeseeable problems can still occur for which your club may be held liable. Limiting your liability through the proper insurance coverage is the best way to make sure your business remains solid, regardless of circumstances.

COVERAGE AND PROTECTION
To meet basic coverage needs, health clubs need to have general liability insurance that includes professional liability coverage for wrongful termination and harassment claims from employees, property insurance to cover the facility and its contents, loss of business income protection and worker’s compensation insurance, according to Ken Reinig, senior vice president of Association Insurance Group, which works exclusively in the health and fitness industry. “This is a basic package of coverage that is necessary to protect the club owner from losses to their business property, financial loss of revenue if they are shut down and to protect them if they are sued,” Reinig adds.

Other kinds of coverage to consider or ask an agent about include abuse and molestation insurance to cover daycare areas, umbrella insurance for excessive liability coverage and a surety bond, required in some states in order for clubs to collect up-front fees. You should also look into special coverage that may be needed for tanning bed areas, Ademite advises. There are a lot of insurance agencies in the marketplace looking to add health clubs to their list of clients. It’s up to you to read in between the lines to see if what it’s offering can and will meet your needs.

Casaburi advises all clubs to seek coverage from an agency with experience working specifically in the fitness industry. These companies or agents are most familiar with the unique exposures of a health club to risk and liability. Once you have found an agency you trust, communicating any questions or concerns to them will help you understand your coverage, legal commitments and limit your overall liability.

If and when an incident does occur, it is important to notify your insurance provider immediately, says Jennifer Urmstrom, national account manager at Sports & Fitness Insurance Corp. “Complaints should be handled professionally and courteously and addressed or corrected promptly,” she added. “It is important to report claims immediately so that the carrier can address the demands before a law suit is filed if possible.”

STAYING COMPLIANT
Finding insurance that protects all areas of your club, as well as the actions of employees and members, is a good first step toward successful risk management. To keep your business safe and in compliance with safety laws requires continuous hard work by managers and staff who are mindful of reporting incidents and responding to emergency situations. All employees should be trained on best practices and how to respond if a member comes to them with a complaint or reports an injury. They should know your club’s emergency response procedures and should be regularly tested to ensure compliance. Anyone working in a special area, like tanning or daycare, should receive instructions expressly designed for risks associated with that area.

At Lifestyle Fitness, staff members get both face-to-face and Web training on how to handle emergencies and complaints, Carney says. All staff members are trained in CPR and know how to use an AED if a member experiences cardiac arrest. Having AEDs in your facility is required by law in as many as 13 states, says Tom Kuelbs, marketing director for manufacturer HeartSine Technologies. Laws are in place requiring the units to be fully operational at all times and releasing others from liability should they use an AED on someone experiencing cardiac arrest. Some clubs report that these potentially life-saving devices can be especially critical at 24-hour gyms, where management may not be present during a medical emergency, according to Glen Jasper of ThinkSafe, Inc., a HeartSine dealer that works directly with health clubs.

Keeping members mindful of safety through education and monitoring is another way to reduce the risk of injury. A perfect time to touch on the subject is during the orientation process, Carney suggests. Members should be offered proper orientation, fitness screenings and training on all the equipment in the club from a personal trainer.

Another way to limit liability is by providing antibacterial wipes and solutions to prevent the spread of disease and posting clear signage regarding any particular health risks. At Retro Fitness locations, management is meticulous on providing this type of information to reduce risks and keep members educated about safe usage of the club’s services, according to Casaburi. Keeping members informed is one of the best ways to be proactive about risk management at your club and avoid accidents before they happen.

Loss Prevention Checklist

Property Claims:

Worker’s Compensation Claims:

INDUSTRY RESOURCES: