Is Your Gym In Need of a Risk Retention Group?
If you own a gym, then you should have insurance. What sort of liabilities should concern you if you’re a gym owner? Obviously you’ll need a liability policy of some kind. Products liability generally isn’t a huge issue for gyms unless you’re also selling supplements. General liability, including slips and falls, is always a concern. But where you can really get hit by a plaintiff’s attorney is in the professional liability area. Creating a risk retention group can help.
Gyms have trainers. It’s part of the deal. If someone gets hurt while in session with a trainer, then you have a real liability on your hands. Not all liabilities are the same. Accidentally dropping a dumbbell on your foot isn’t the same as cracking your skull on a poorly executed clean and jerk, but even small claims can add up pretty fast.
The problem for large, national gyms is that their liability premiums generally subsidize bad gyms. While your personal gym may have an accident once every other year, there are bad gyms across the country that fail to serve their clients very well. Allowing gym members to try movements beyond their capabilities, do workouts without proper warm up, or simply schedule bad workouts creates injuries. In fact, these injuries are so regular that the largest insurance carriers are using predictive analytics to assess which gym injuries should be settled early before the defense costs begin to skyrocket against a skilled plaintiff’s attorney.
Choose a Risk Retention Group for Your Business
In short, the time has never been better for gyms to start considering a risk retention group as part of their risk management strategy. The reality is that most gyms are completely safe. The problem is that underwriters generally have a poor understanding of the actual risks involved in snatches and cleans and jerks. Rather, they simply see weight going over someone’s head and assume that’s a liability.
It’s not. Traditional insurance carriers rarely realize this. Gym owners do. That’s why gym owners should consider using a risk retention group in order to create their own liability policies crafted to their needs. RRGs save money in several ways. First, premiums will naturally go down as the RRG owners will only allow good gyms into the group. Second, the policies are narrowly tailored to cover the risks in your gyms without any unnecessary bells and whistles (why have products liability coverage if you don’t sell products?). Third, a well-run RRG will implement best practices into each of its members’ gyms in order to ensure adherence to competent risk management policies. Failure to adhere to risk management guidelines results in rescission of RRG membership.
An added bonus of creating an RRG is that they make money. Smart underwriting practices mean that the RRG should turn an annual profit on the insurance policies that it issues to members. These profits are returned to Class A shareholders as dividends. Also, a profitable company increases in value. As a result, each share increases in value as well. A risk retention group is a powerful financial and risk management vehicle which generates a considerable amount of wealth when managed appropriately.
If you think now is the right time to create a risk retention group for your business, please contact us today to get started!