Why Your Business Needs Wellness and Fitness Insurance: A Comprehensive Guide

Do you work in or operate a business in the health and wellness industry? Do you own a gym, a martial arts studio, a yoga center, or a massage therapy clinic? How about expert advice—do you offer it in-person or online? Do people come to you for your opinion?

If you answered yes to any of these questions, you should consider wellness and fitness insurance to protect yourself against litigation. 

Are All Wellness and Fitness Insurance the Same?

When choosing between fitness and wellness insurance plans, you need to choose the coverage that fits within your bespoke business model. Fitness center and gym insurance will be slightly different than that of a general wellness center. Consider for a moment, a personal nutritionist versus a boxing gym owner. 

The Nutritionist: Example 1 of Wellness and Fitness Insurance

The nutritionist is working closely with individuals, building a relationship, and testing many different health and dietary strategies to optimize for the person. When it comes to food, nutritional health science has found that diets must be individualized to the person to be optimal. There is no one size fits all, as nutritionists used to believe. Biomarkers and DNA have to be considered now for sustained benefits to result. 

What does that entail for the personal nutritionist?

He or she must offer advice and meal plans until one is found to benefit the person. The person seeking advice might not know that they’re allergic to gluten or even allergic to strawberries. Slowly but surely the nutritionist designs a diet that cuts out these foods that cause inflammation—but during the process, they are liable for the possible adverse health effects from the trial and error.

For this reason, a personal nutritionist would need:

• Extensive professional liability coverage to protect against unhealthy advice
• Professional  liability to cover basic health problems that arise while working with individuals
• General Liability to cover accidents happening on the business property
• Cyber liability if they operate part of their business online or hold onto client information

The Boxing Gym Owner: Example 2 of Wellness and Fitness Insurance

Kickboxing, boxing, mixed martial arts—these are all contact, combat sports. Aggression is part of the game and injuries are likely. For the gym owner, this should immediately spell lawsuits, medical bills, ambulance costs, and the more they have to cover should anything arise on their property.

Additionally, the gym owner will be hiring personal trainers who will instruct and advise the gym members on how best to fight. If this advice backfires and results in an injury, the member could sue the owner of the gym.

For this reason, a boxing gym owner would need:

• Extensive general liability coverage to protect against injuries such as slip and falls and equipment malfunctions.
• Professional liability to ensure that the personal trainers in the gym can offer advice without the threat of a lawsuit.
• Property coverage to protect against building damage, theft, vandalism, and any unforeseen natural disasters.

What Are The Types of Coverages?

Most of the different coverages were mentioned above with the nutritionist and the boxing gym owner. However, let’s do a deep dive into each type of liability coverage and why your business might need it.

First things first, the types of coverages that will be discussed are:

• General Liability 
• Professional Liability
• Property Coverage
• Cyber Liability

General Liability Coverage

The most common form of fitness and wellness insurance for businesses is a basic general liability plan. General liability will often cover you in the event of an injury, property damage, or instances in which you were at fault (or at least you were legally responsible at the time) and the aggrieved party is requesting monetary compensation. It’s these broad, blanket terms that businesses enjoy for general liability because it’s difficult to say what will go wrong and when. 

Health, wellness, and fitness industries are specifically dealing with people exerting themselves by participating in physical activity and testing their limits. Even mental health therapists can find themselves ensconced in legal cases where patients experienced bodily harm and sued the therapist. (While this would most likely need to be covered under professional liability coverage—detailed below—there are instances in which general liability would be needed to protect themselves financially).

Why Your Business Needs General Liability

If your business operates with other people, like most of the health and wellness sector do, you need to protect yourself against third-party injury or damages. This is especially important for gyms, and though you may be wondering what the cost of gym insurance is, it is less than the cost of you being held liable for an accident. 

If you are, own, or operate any of the following, you should consider general liability coverage:

• Fitness studio
• Gym (regular, boxing, yoga, etc.)
• Massage therapy center
• Day spa
• Medical spa
• Nutritionist
• Mental health therapist

Remember that this is only a small list of the extensive professions that need general fitness and wellness insurance.

Professional Liability

Professional liability coverage is often mistaken for general liability. The difference, laid side by side, is easy to decipher. As just mentioned, general liability accounts for third-party injury or damage; professional liability covers damages, injuries, and liabilities that are a result of negligence on the professional’s part.

To return to the two examples above—the nutritionist and the gym owner—the nutritionist relies heavily on clients taking their advice. Because the nutritionist is the expert in the field, they need to cover both what they say AND what they don’t say.

How does that work? Here are some examples of when professional liability would come in handy.

• A nutritionist sits down with a client to set weight management goals. When the nutritionist assures that the client will be able to lose 15 pounds, and the client does not, they can sue for failure to deliver promises.
• When a nutritionist doesn’t explain the concepts behind their meal plan choices and it results in an adverse misinterpretation—the client could sue for omitting necessary information.

Why Your Business Needs Professional Liability

If your business involves offering advice or expert opinions, you need to protect yourself against client claims. Errors and Omissions coverage (E&O), as is often the name for professional liability, refers to both the errors in advice and the omission of advice. 

Who needs this professional liability? In the health and wellness industry, most of the professions listed for general liability also require E&O. However, the following professions should consider investing heavily in this type of insurance:

• Nutritionists
• Mental health therapists
• Instructional services (yoga, gyms, boxing, martial arts, etc.)

It should also be noted that many industries outside of the health and wellness sector also require adequate professional liability coverage, including:

• Doctors
• Lawyers
• Financial advisors
• Wedding planners

The list goes on, but this should provide a rough idea of who needs professional liability coverage. If customers or clientele come to you for advice or your expert opinion, make sure you only give it when you have coverage.

Property Coverage

Sometimes covered in general liability coverage, property coverage is extended protection for your building and operations. In its most simple form, it covers any and all reasonable damage to your building. However, there are some intricacies that you might not be aware of that will convince you to add this coverage.

Why Your Business Needs Property Coverage

Consider the following situations to determine whether property coverage is right for you and your business.

• Natural disasters – First and foremost, natural disasters are as preventable as they are predictable. Forest fires can start from a tossed cigarette on a windy day or during a thunderous storm. Seismologists can detect earthquakes seconds before they happen, and can warn of tsunamis from oceanic earthquakes, maybe, up to an hour in advance (if they’re lucky). Who knows what disaster your building will be subject to. The only thing you can be confident about is having the insurance to protect your business just in case.  
• Vandalism – While it’s an annoying part about owning and operating a building, chances are you will encounter some form of vandalism (light or heavy) in your time. When smashed windows and theft are a result, there’s property coverage to help out.
• New legislation on building codes – Consider when new legislation is passed that requires your ceilings to be six inches higher than they currently are. Without any type of property insurance, you could be left paying for these repairs and construction costs out of pocket. Required construction can be covered under specific property insurances.
• Theft – As mentioned prior, vandalism and theft are two unfortunate instances that property owners face. It’s better to be prepared and insured than to try and predict when this might occur. Plus, having coverage will lessen the anxiety of when something does.
• Equipment replacement – Gyms and other fitness centers have heavy machinery that needs repairs, updates, and replacements constantly. This either has to come out of pocket or through insurance.

Cyber Liability

The fourth and perhaps one of the most undervalued insurance coverages is that of cyber liability. What used to be specifically catered toward large companies that had extensive private data that needed protection—think healthcare organizations, banks, credit card companies—is now desperately needed among small and mid-sized businesses.

CNBC reported that, on average, cyberattacks are costing SMBs upwards of $200,000. This fee comes from data extortion, security investigations, legal costs, cyber compliance fines, and other intangible monetarily losses—loss of customer trust, reduced membership, etc.

This fine for most gyms is enough to put them deep in debt. And for some, it’s enough to cause bankruptcy.

Why Your Business Needs Cyber Liability

If you have credit card data, phone numbers, addresses, or an online presence for your business, you need to stay protected. Cyber liability insurance will cover:

• First-party incidents – When a cyber threat appears, this will cover everything from extortion costs to determining and analyzing the security system that was infiltrated.
• Third-party incidents – When an associated business experiences a data breach that negatively impacts your business, this will help cover these losses and expenses.
• Miscellaneous incidents – Theft of hard drives or computers with sensitive information can result in heavy data breaches.

Why Your Business Needs Fitness and Wellness Insurance?

If there was one reason why your business needs fitness and wellness insurance, above all else, it’s the peace of mind. Disaster can strike at any time. Humans are prone to make mistakes. Hackers are increasingly tricky. And culture has turned particularly litigious-happy. 

Combining these factors, you could stand to lose everything if you ignore the proper insurance coverage.

If you’re still unsure what your business is liable for, talk to the experts at NOW Insurance today and receive assistance to all your insurance questions.

Sources:

Nature. Longitudinal analysis of biomarker data from a personalized nutrition platform in healthy subjects. https://www.nature.com/articles/s41598-018-33008-7

Investopedia. Errors and Omissions Insurance (E&O). https://www.investopedia.com/terms/e/errors-omissions-insurance.asp

CNBC. Cyberattacks now cost companies $200,000 on average, putting many out of business. https://www.cnbc.com/2019/10/13/cyberattacks-cost-small-companies-200k-putting-many-out-of-business.html