When we think of the health and fitness industry, we often picture traditional gyms with free weights, treadmills and workout classes.

"However, the industry extends beyond just standard fitness clubs," explains RPS Area Senior Vice President Peter Small.

The health and fitness segment includes full-service gyms and fitness centers, boutique fitness studios (e.g., yoga, Pilates, spin classes), indoor climbing gyms, sports and racquet clubs (e.g., tennis, squash, pickleball), country-club-style fitness centers, gyms with childcare facilities and multi-use athletic training facilities.

This wide range of facilities means a wide range of risks. Here's what to think about when advising your health and fitness clients.

Key Exposures in the Fitness Industry

Property Damage

Health and fitness businesses face multiple liability and property risks, many of which stem from high foot traffic, heavy equipment and physically demanding activities, according to Small.

"Gyms, like any other business, can suffer property damage due to pipe breaks, electrical fires or extreme weather events," says Small. "They have expensive machines costing thousands of dollars each, making replacement cost coverage for their equipment essential. Also, if a gym is forced to close due to property damage, it risks losing revenue as members pause or cancel their memberships. Business Income insurance can help cover lost revenue during repair periods."

Liability

Small explains that slips and falls are among the most common claims in the health and fitness industry.

"Members or visitors can slip on wet floors, especially in locker rooms and pool areas, trip over gym mats or fall while using equipment," he says.

Other hazards include injury claims from equipment use.

"Whether it's a misused treadmill or a dropped weight, members can suffer injuries that lead to lawsuits against the gym," he explains. "Also, clubs with pools or spas face additional risks, including drowning incidents, slip-and-fall accidents and waterborne illness claims."

Cyber and Crime

Almost every health and fitness facility stores personal data, including credit card payments, membership records and employee details. A data breach could expose this information, leading to claims that a Cyber policy will address.

"Also, some large gyms employ financial managers who handle significant membership dues, making Crime coverage critical to protect against embezzlement, internal theft or fraudulent transactions," says Small.

Employee Injuries

Workers' Compensation insurance for all employees, from the front-desk staff to maintenance employees, is required. And yes, that includes independent contractors.

"Although many personal trainers are independent contractors (classified as 1099) and carry their own insurance, trainers who function as full-time employees (e.g., wear gym uniforms, work set hours) can often be deemed as an employee of the gym, depending on the state in which the gym is located, meaning that they would need to be covered under the facility's Workers' Comp policy," says Small.

Less Common Health and Fitness Risks

Other exposures, while uncommon for health and fitness facilities, include abuse and molestation, professional liability and liquor liability.

"Many gyms, especially large franchises, offer childcare services for members. Abuse or molestation claims can arise in these settings and are covered under a General Liability policy with a separate limit," explains Small.

Fitness trainers and instructors could face professional liability claims if a client is injured due to their coaching. For example, a lawsuit could follow if a client lifts weights improperly and sustains an injury.

"However, these claims are infrequent, as most injuries fall under a General Liability policy rather than Professional Liability insurance," Small says.

Small also notes that while liquor and fitness don't typically mix, some high-end gyms and country-club-style fitness centers serve alcohol in lounges or dining areas.

"These facilities need Liquor Liability insurance in case an intoxicated patron causes harm to themselves or others."

A Specialized Market

The health and fitness segment requires expertise due to its high liability risks and unique exposures.

"This is not a one-size-fits-all market. Few insurance carriers specialize in health and fitness due to the unpredictability of liability claims," says Small. "Working with a specialized wholesaler helps agents and their clients understand their risks, secure proper coverage and avoid costly gaps in protection."

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