Fitness Center Insurance – What To Look For In Your Service Providers’ Coverage
So, you need to hire a service contractor to help with your fitness center equipment, why would you worry about the contractor’s insurance? One answer is Risk Transfer…
When a contractor enters your facility to perform work, they can be held liable for injuries or property damage but you can too! It’s prudent to ask your contractor to prove their general liability insurance, and check that you are properly named as an additional insured. Done correctly, the contractor’s insurance company will defend you in addition to the contractor, in cases where the contractor is deemed negligent.
When an accident occurs, the insurance company stands behind the contractor’s commitment to manage his job operations safely and deliver a safe work product. The risks you are exposed to during and after the contractor’s operations are effectively transferred to the contractor and to his insurance company. The insurance contract also helps to “guarantee” the financial ability to deliver a competent defense and an”A” rating (see below) provides reassurance that the insurance company is viable. A current certificate of insurance (“COI”) provides a written description of the contractor’s insurance and should list your property as an additional insured. The certificate will not give the holder any rights beyond the contractor’s negligence, but it’s provides for your defense in the event of a loss caused by the contractor.
Three keys to your service contractor’s insurance:
The Insurance Carrier: A carrier with an “A” rating or better is normally required.
Insurance Coverage and Limits:
1. Insurance limits of $1,000,000 per occurrence in general liability and $5,000,000 in umbrella liability per occurrence are often required.
2. In the majority of situations, a “per occurrence” form is preferred to a “claims made” form. Occurrence policies cover injuries and/or damages that occur during the policy’s period even if the claim is brought later. For this reason, a current certificate should be obtained for the entire time that the exposure exists. Alternatively, if the contractor has a claims-made policy, you would need certificates for any terms during which a claim could be made, perhaps for many years into the future. Which could mean in years where the contractor is no longer in business, or no longer has coverage.
3. The annual aggregate limits should be at least $5,000,000 on a “per project” or “per location” basis.
4. Coverage on the contractor’s policy should apply on a Primary coverage basis.
5. Additional Insured Status: The additional insured endorsement changes the contractor’s insurance contract; be sure you’re shown accurately with the form number clearly indicated. As an additional insured, you are protected by the contractor’s policy against liability for injury or damage caused by work the contractor does. Verify that the endorsement is for both ongoing and completed operations, and not simply a “premises-only” policy.
As you can see there are a wide variety of insurance coverages available for service contractors. However, it is up to the contractor to maintain their policies and that often depends on their financial position, years in business, and their ability and willingness to pay for the best coverage. As an example, Heartline Fitness carries $10,000,000 in per-occurrence coverage. This is the highest known for a fitness equipment and service distributor. For further information on this subject don’t hesitate to call Heartline Fitness, as well as seek input from your attorneys, accountants and other professionals directly. Consultation with your attorney and your own insurance professionals is your best tool for implementing a successful risk management program.
For more friendly fitness center advice, please contact Heartline at 301-921-0661, or refer to Heartline’s [anchor id=47 text=”blog”] or [anchor id=392 text=”learning center”].