Best Practices
it becomes costly , so one of the biggest changes is choosing to have higher deductibles and make sure we have catastrophic coverages ,” said Norris .
In a post-pandemic world , Matt Hillberg , vice president , commercial lines for USI Insurance Services , recommends all franchisees now have Communicable Disease Liability coverage .
Another change is the insurance industry itself . Inflation has caused the cost for labor and materials to go up , forcing insurance carriers to pay more for fixing damages .
“ The insurance industry is currently in a ‘ hard market ,’ which means premiums are on the rise and capacity ( the supply of insurance available to meet demand ) is dwindling . This is driven by a few factors , but primarily , the rising cost of reinsurance ( insurance that insurance companies buy ) due to catastrophic storms in the Southeast and wildfires in the West increased cost of property claims due to inflation and ‘ social inflation .’ Social inflation refers to rising costs resulting from societal trends and views toward increased litigation , broader contract interpretations , plaintiff-friendly legal decisions and large jury awards . The insurance markets in some states , namely Florida and California , are in particularly bad shape right now ,” explained Soden .
Best Practices
When it comes to de-risking your business , the best course of action might be to overprepare . Warsh highlighted specific areas where franchisees should place their focus .
“ On the franchisee side , it ’ s all about loss prevention , i . e ., maintaining equipment logs on all the servicing requests , having a good clean-up crew to rack weights and wipe up spills , keeping a strict protocol on injury and incident reporting , proper use and storage of surveillance footage , equipment orientation and instruction for proper use of each machine , and anything else that can be done to limit risk of injury at the club . These little things go a long way when added together ,” he said .
Additionally , franchisees should start early with the insurance renewal process . “ Start the renewal process early with your broker , ideally 120-150 days out from the effective date to allow quotes to be released in a timely manner . Establishing a renewal timeline will be beneficial for franchisees , brokers and underwriters . Developing a quality underwriting submission will result in more favorable renewals ,” said Hillberg .
While it may seem impossible , Planet Fitness franchisees need to be aware of all the possible risks that come with running a fitness club and choose the right people to help them be prepared .
“ Planet Fitness has a unique operating model with unique risk exposures that need to be insured against , and for that reason , there is a limited amount of insurance carriers that can adequately satisfy the insurance requirements set forth in the FDD ,” Hillberg said . “ Attention to detail is critical when partnering with a broker and insurance carrier .” G
Julia Sanders is the PFIFC communications coordinator . Sanders may be reached at julias @ pffranchisee . org or 678-737-2396 .
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GearedUp | 2023 Issue 3
51