platinum
Not All Insurance Policies
are Created Equal
By Jeffrey J Fox, CPCU, ARM
T
While knowing your insurance
coverages may not be at
the top of your “need to know”
list, understanding your
insurance program will serve
you well in the event of an
unforeseen incident.
is they have a “tanning endorsement”
on their policy that they believe provides
coverage for a “tanning” incident, when,
in fact, endorsements specific to the
“tanning” exposure usually limit what
type of “tanning” claims are covered. For
example, one insurer issued a tanning
endorsement that excludes claims related
to cancer/carcinogens – which is the most
significant “tanning” exposure. To lower
your risk, the preference here is for your
general liability policy to have no tanning
endorsement because an “endorsement”
actually reduces your coverage.
The second critical coverage issue is
cyber security coverage. In the modern
fitness club environment, you need cyber
security coverage! Beware: All cyber
security insurance policies may not give
you the coverage you need. In the event of
a breach of cyber security, the majority of
policies provide coverage for (i) notification and credit monitoring expenses;
Jeffrey J Fox, CPCU, ARM is the senior
vice president – Planet Fitness Program
Manager for USI Insurance Services
LLC. USI is a platinum partner member
of the PFIFA. You can reach Fox at
978-983-6831.
GearedUp | 2016 Issue 2
here is a common misperception
when buying business insurance
that the only difference from one
insurance policy to another is the price
(i.e., premium). In chasing the lowest cost
insurance program for your clubs every
year, you may be doing yourself (and your
partners) a disservice, potentially exposing
your business assets to excessive risk.
All insurance policies are not created
equal, which is why business owners
must know what risks are covered or not.
While knowing your insurance coverages
may not be at the top of your “need to
know” list, understanding your insurance
program will serve you well in the event
of an unforeseen incident. There are many
reasons why insurance coverages vary
among insurers, but the key is to know
that there are significant differences and to
make certain you do not have “coverage
gaps” in the insurance at your clubs.
What follows are two critical coverage
issues that you, as club owners, need to
focus on. The first is tanning. An injury
from a tanning incident is a “bodily
injury,” as defined in the general liability
policy, and is handled in the same manner
and subject to the same policy language
as if someone slipped and fell in your
premises. Your insurance policy does
not need to list “tanning” as a covered
activity for the same reason “treadmill”
incidents are not separately listed. The
general liability policy is structured to
cover the operations of your club with
certain exclusions. Now this is where it’s
critical to understand your own coverages.
The perception we hear from club owners
(ii) restoration of digital assets (i.e., your
customer data); and (iii) liability claims.
However, since your revenues are based
on the availability of those data assets, do
you also have “loss of income” coverage
due to a breach event and/or the potential
adverse media reports that could affect
future membership and revenue? Some
cyber security policies do not provide this
coverage, or they give it but take it back
with a very small sub-limit. Do you have
any idea how your current insurances
address this issue?
Another critical item to note is cyber
security policies provide coverage for
you, the insured, when your system is
breached, but your critical data does not
reside on your system – it’s on a third
party’s computer system. Does your cyber
security insurance respond when your
data is compromised even though it is not
on your own system? This is a very important distinction that you, as club owners,
need to be aware of and understand.
There are numerous other coverage
issues that arise in the Planet Fitness®
business context and are specific to you as
a franchisee. It is very important that you
work with an insurance professional who
understands the specific exposures of your
business to ensure that those exposures
are covered. If your insurance professional
does not offer a coverage analysis, then
ask for it! G
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