INSURANCE – WHY BOTHER?
Prepared by Phil Webb
As an entrepreneur there are significant risks that you face. One such risk is that a participant in one of your classes may injur themselves and sue you. Should the courts decide that you were negligent in your “duty of care” as an instructor then you will be responsible for the damages incurred. Court awards have exceeded millions of dollars for people seriously injured.
The best way to protect yourself from this exposure is to purchase Commercial General Liability. This insurance policy is designed to defend and indemnify you for bodily injury or property damage sustained by third parties due to your negligence. So not only will the insurer pay for the damages in the example above, but they will also fund your legal defense.
For example: Let’s say someone is performing an inverted move in one of your classes. They fall and claim to be injured with a concussion. They miss work. They get fired. They have hospital bills. They get a lawyer. They say the injury is your fault (negligence) because they should not have been performing inverted moves at a novice level, and the padding and safety gear was inadequate. Next thing you know, wham-bam-thank-you-mam; you’re getting sued.
Firstly, your insurer will pay to defend you in court. If the judge rules against you, they pick up the tab, up to the policy limits. How much fun does that sound?
In truth a claim described above is an increadibly unpleasant and lengthy process. But it is much easier to deal with when you have a strong and reputable insurer on your side compared to dealing (and paying for it) all by yourself.
Q: Doesn’t a waiver protect us from getting sued? A: No, but they can help. Nothing can remove a person’s right to sue you. Waivers sometimes hold up in court, and sometimes they don’t. If both parties are deemed to fully understand the waiver then it will probably hold up. However, if the plaintiff reasonably claims they didn’t know what they were signing then the judge will happily toss your waiver in the garbage. So don’t just put a piece of paper in your clients face and say “sign here”. Use a clearly worded waiver and explain it to your clients when they sign it. Adopt this as your standard practice with ALL participants. Keep the waivers on file for 7 years. Also, waiver’s are an excellent tool for risk management and can prevent a lawsuit from taking place. Many nuisance claims are ended quickly when the potential plaintiff is presented with the waiver they signed. Q: What am I covered for? A: Lots. The Commercial General Liability policy covers you for bodily injury and property damage sustained by third parties as a result of your negligence arising during your commercial enterprise, including incidental operations. This includes instruction taking place in your premises or someone else’s. Most policies cover you across North America. Some have USA Exclusions so watch out for those if you are teaching down south. Q: What if someone hurts themselves while not participating in pole fitness? Like a ‘slip and fall’. Am I covered for this?
In such a claim the plaintiff will have to demonstrate that your negligence led to the injury. For example; wet floor, a banana peel in the performance area, un-safe performing area etc.
Usually such a claim would involve you (the instructor) and any landlord or host studio who may also share in the liability / negligence.
In such a case your insurance company will have to provide you with a legal defense regardless.
Q: Is there anything specific that I should I look for when buying General Liability?
A: Yes. Watch out for a “Participant Exclusion”.
The Commercial General Liability has a number of standard exclusions (Terrorism, Asbestos, Nuclear energy) many of which don’t apply to your business.
I frequently see underwriters sneak in a “Participant Exclusion”. This excludes coverage for people participating in athletic endeavours. Do not purchase any policy with such an exclusion. It will negate the coverage you need and turn your insurance policy into a worthless pile of paper.
“Waiver Warranties” are also something to look for. Basically these mean that your entire policy could be nullified if your participants aren’t signing waivers.
Q: What should I do if someone is injured in one of my classes?
A: Document, document, document
First; take care of the injured person and apply first aid treatment as nessacery.
Second: As soon as the injurerd person has been adequately treated, make immediate written documentation of what happened. Be as detailed and specific as possible; including times and dates. Save this documentation.
Third: Contact your insurance broker. They can help walk you through the next steps and determine if the incident is serious enough to inform your insurance company.
Given the operations of teaching pole fitness it is not impossible to imagine a scenario where someone is badly injured. I implore you all to use best practices for safety and risk management. Use waivers religiously, crash mats, sensible footwear, use a gradual progression in the difficulty of activities, etc., etc. Insurance is important and can provide tremendous value, but it is the only product that you purchase and never want to use. There are many things that you can do to prevent and mitigate potential claims by effectively managing your risk and I implore you all to do so.