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    How insurance protects gym owners from vicarious liability

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    Vicarious liability occurs when a party is held partly or fully responsible for a third party’s actions. This commonly occurs in employer-employee relationships, where the employer is legally and financially accountable for their employees’ actions.

    However, as a gym owner (or any other business owner), there are other situations where you could be liable for a third party’s actions, such as when someone acts as an agent of your business or is hired as an independent contractor.

    “As a business owner, you’re vicariously responsible for the actions of your contracted employees,” says Josh Pillsbury, VP Partnerships at APOLLO Insurance, “That’s why it’s important that instructors carry their own certificates of insurance, so if employee actions result in a loss, the claim doesn’t fall on your business.”

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    How and when your gym is liable for its employees’ actions

    Generally, when an employee is acting within the scope of their duties, your gym could be liable for their actions. For example, if an employee corrects a gym member’s workout form, and the gym member injures themselves due to the employee’s advice, your gym could be liable for damages.

    It’s common for some fitness centre employees, such as personal trainers or yoga instructors, to carry their own insurance. However, this isn’t always the case:

    “If the yoga instructor didn’t have a General Liability policy, then as the gym owner, you can be named in the lawsuit.” says Pillsbury, “Good luck trying to get back your losses from the yoga instructor if they weren’t insured.”

    Related: How to become a yoga instructor

    An excellent analogy to explain the relationship between your gym and third parties is a landlord and tenant’s relationship. If the tenant causes water damage in the building and doesn’t have insurance, then it will be an expensive repair that the landlord will have a tough time billing to the tenant.

    This is why many gyms require that some of their employees have a personal, general or professional liability insurance policy as a prerequisite to the job.

    What are ‘agents’ and when is your business liable for their actions?

    An agent can include anyone that properly represents your business and can consist of employees and independent contractors. Agents often have the authority to alter or create legal relationships between your business and other parties.

    Similar to employees, you could be legally liable for the actions of your agents. However, this depends on the exact relationship between your gym and the agent. Whether you’re responsible for an agent’s action must be examined on a case-by-case basis.

    When is your business liable for the actions of its independent contractors? 

    You may hire an independent contractor to avoid legal liability. For example, if you hire an independent contractor to fix your rowing machine and the rowing machine breaks down and injures a gym member, it may be the independent contractor who’s liable for damages because they didn’t properly fix the equipment.

    But there are some situations where your gym remains liable for the negligence of an independent contractor. This includes, but is not limited to, incidents where your gym was partly at fault or where you hire contractors to do something that the gym was legally required to do itself.

    What types of insurance can protect my gym?

    To cover your business’ basis for vicarious liability, General Liability insurance and Professional Liability insurance are good starting points. These policies can cover the cost of damages paid to the person suing your business and the legal fees associated with the lawsuit.

    General Liability insurance protects your gym from lawsuits relating to accidents or damages to property on the premise of your fitness centre. So, if someone trips on a cord and hurts themselves at your gym, General Liability insurance can likely cover any legal costs.

    Professional Liability insurance, in contrast, can protect against mistakes or oversights by you or your team while performing your duties. This includes providing people with fitness advice or nutrition programs that result in an injury. It’s important to note that the lawsuit does not have to be justified in order to proceed — your liability insurance will protect you from defending frivolous lawsuits out of pocket.

    Running a gym or any other business is a great venture. Employees, personal trainers, yoga teachers, agents, and independent contractors can all represent your business, and their actions can result in your company being financially and legally liable. Therefore, you need to ensure that you’re protected from lawsuits that result from vicarious liability. Both General and Professional Liability Insurance are a great way to protect your business from these incidents.

    Related: What Insurance Do I Need as a Personal Trainer?

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    Originally published November 2, 2020, updated August 25, 2023

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