A Look at the Health and Fitness Market: Trends, Emerging Risks and Coverage Considerations

The health and fitness industry encompasses a broad range of classes, including boutique fitness studios and racquet clubs, pickleball facilities, health clubs with spa services and specialized wellness amenities. As facilities diversify their offerings and consumer participation grows, it's critical to better understand the liability exposures these businesses face, the coverages they require and where the market has become more challenging.

"When we talk about health and fitness, we're really talking about the fitness side of the business," explains Brendan Kopec, Underwriting Manager at RPS. "This includes gyms, health clubs, fitness centers and facilities where people are actively participating in athletic activities."

While every operation is different, most share one common characteristic: significant General Liability exposure.

"Unlike many commercial businesses, these facilities invite customers to engage in physically demanding activities where injuries can occur even when equipment is functioning properly and employees follow established procedures," says Kopec.

Many operators also purchase Accident Medical coverage, which helps pay medical expenses that remain after a participant's health insurance responds. This coverage can help resolve smaller injury claims before they escalate into lawsuits against the facility.

New business models are creating new exposures

One of the biggest shifts in the industry is the rapid growth of 24-hour fitness facilities. Many gyms now allow members to access the facility overnight using electronic key cards while operating with limited — or no — staff during certain hours.

While consumers appreciate flexibility, insurers are approaching these operations cautiously.

"The marketplace hasn't fully caught up with 24-hour access," Kopec says. "If members are lifting heavy weights in the middle of the night without staff present, that's an exposure underwriters pay close attention to."

Rather than declining these accounts outright, underwriters often evaluate staffing levels during extended hours, access controls, member eligibility for after-hours access, emergency procedures and overall risk management practices.

Pickleball continues to drive growth and claims

Few recreational activities have grown as quickly as pickleball. Across the country, clubs are opening dedicated pickleball facilities, while existing fitness centers continue to add courts to attract members.

However, sport brings its own underwriting considerations. Many facilities also generate significant revenue from food and alcohol sales, creating an overlap between participant liability and liquor liability exposures.

"You're combining athletic activity with liquor liability," Kopec explains. "Those are stacking risk factors that underwriters have to evaluate together."

Excess liability is becoming more challenging

One of the biggest challenges in today's health and fitness market is securing Excess Liability coverage.

"It's becoming harder every year to build larger excess towers," Kopec says. "Not only are limits shrinking, but many excess policies no longer follow coverages like Liquor Liability or Abuse and Molestation."

Childcare and youth programs face added scrutiny

Facilities that offer childcare or youth programs face greater scrutiny, with carriers significantly reducing available Abuse and Molestation limits, according to Kopec.

"Carriers are asking far more questions about protocols and risk-mitigation practices, background checks, supervision, employee screening and incident reporting than they used to."

Waivers aren't a substitute for insurance

Many gym owners assume participant waivers can shield them from lawsuits. While waivers remain an important risk management tool, they're far from foolproof.

Claims continue to arise even when participants ignore safety instructions or contribute to their own injuries. Courts may still determine that a facility had a duty to supervise members, maintain equipment or provide a reasonably safe environment.

"We've seen plenty of claims where the business believed the waiver protected them," says Kopec. "But just because someone signs a waiver doesn't mean a claim won't be paid."

Risk management matters more than ever

Underwriters are increasingly focused on how businesses respond after a claim, not just on their loss history. For example, if a member tripped because of damaged flooring, did the facility repair it? If equipment contributed to an injury, were inspection procedures changed?

"Helping clients document corrective actions can significantly strengthen renewal submissions," says Kopec.

Helping clients stay fit for the future

Health and fitness remains a growing and attractive niche, but it's no longer a one-size-fits-all class of business. Emerging recreational trends, evolving business models, changing liability exposures and tightening excess markets all require agents to take a more consultative approach.

RPS's experienced team understands the risks the health and fitness industry faces and is available to help agents navigate market challenges, identify appropriate coverage solutions and better position their clients for long-term success.