Employment Practices Liability Insurance for Your Gym or Studio

Employment Practices Liability Insurance for Your Gym or Studio
December 6, 2018 Andrew Riordan

Turn on the TV or check social media and you’ll see that employment harassment and discrimination claims are on the rise, and unfortunately, the fitness industry is exposed many of these claims – which means that fitness professionals need to ensure the atmosphere inside their gym or fitness studio is as professional as possible. Employees have the power to take legal action against employers who display potential unfair and inappropriate actions towards them – And, in the eyes of the law, that can start the moment they are interviewed.

Whether you run a boutique fitness studio, CrossFit box – yoga, Pilates, HIIT, or spin studio… basically any business in the fitness training industry, it’s important you shield yourself against these claims.

That’s why today we’re talking about EPLI (Employment Practices Liability Insurance).

What Does It Cover?

EPLI is a form of insurance that is used by fitness facilities in the event that a member of the organization is charged with allegations of wrongful termination, discrimination, workplace harassment, and retaliation.

How Does EPLI Insurance Help the Fitness Industry?

Large gyms and studios in the fitness industry should have substantial employment practices insurance coverage in place, and they should be prepared to deal with just about any employment lawsuit. However, small, independent, boutique studios are often the most vulnerable to employment-related claims. That’s because they usually lack a legal department, or formal employment protocol detailing the policies and procedures that guide hiring, disciplining and terminating employees.

Many studio owners and managers do not realize that they’re at risk of an employment claim the moment they interview a potential employee…

For example, if you choose not to hire the job candidate, that candidate can allege some form of discrimination.

Also, if you hire a person and later fire that employee due to poor attendance, quality of work, or other issues, the former employee may then claim wrongful termination.

Tips to Lower Your Employment Practices Liability Risk for Your Studio

  • Review potential loss exposures with a trusted insurance advisor and obtain proper EPLI insurance.
  • Your business must have a zero tolerance policy regarding discrimination, substance abuse and any form of harassment. Make sure your employees and trainers can report incidents without any fear of retribution.
  • Keep effective documentation of employee issues as they arise, and what your company did to resolve those issues.
  • Create job descriptions for each position that clearly defines expectations of the role and performance
  • Create and deliver (to each employee) an employee handbook detailing your company’s workplace policies and procedures. This handbook should contain an employment at-will statement and an equal employment opportunity statement
  • Perform performance reviews of employees and be sure to note the results in the employee’s file.
  • Develop in-depth screening and background checks for potential job candidates.
  • Provide an employment application that contains an equal employment opportunity statement along with a statement, that if hired, employment will be “at-will,” meaning their employment can be terminated at any time – for any reason or for no reason at all – with or without notice. Also ensure that your employment application does not contain any age indicators, such as date graduated high school, as this could increase your risk of age discrimination claims.

 Important Employment Laws and Regulations Every Business Owner Should Know

  • Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion, national origin and sex. It also prohibits sex discrimination on the basis of pregnancy and sexual harassment.
  • The Equal Pay Act of 1963, which prohibits employers from paying different wages to men and women who perform essentially the same work under similar working conditions.
  • The Civil Rights Act of 1966, which prohibits discrimination based on race or ethnic origin.
  • The Immigration Reform and Control Act of 1986, which prohibits discrimination on the basis of national origin or citizenship of persons who are authorized to work in the United States.
  • The Americans with Disabilities Act of 1990, which prohibits discrimination against persons with disabilities.
  • The Bankruptcy Code, which prohibits discrimination against anyone who has declared bankruptcy.
  • Equal Employment Opportunity Act of 1972, which prohibits discrimination against minorities based on poor credit ratings.
  • The Age Discrimination in Employment Act, which prohibits discrimination against individuals who are age 40 or older.

How Much Will EPLI Insurance Cost for Your Fitness Studio?

The cost of insuring your gym or studio for EPLI coverage depends on several different factors. Examples are:

  • The size of your company
  • The number of employees/trainers
  • The rate of employee turnover
  • If you’ve had prior employee claims against your company
  • If you have an employee handbook and employment protocol in place.

Coverage is usually written on a claims-made basis. This means the incident resulting in the claim had to occur during the coverage period. Because employment claims often come months or even years after the alleged incident, a studio might be vulnerable if the insurance coverage was dropped or if ‘tail coverage’ (liability insurance that extends beyond the end of the policy period) wasn’t purchased.

EPLI (Employment Practices Liability Insurance) can be crucial for any business in the fitness training industry. But, perhaps even more important, is to create a friendly and compassionate work environment that the employees feel secure while in your gym, box or studio.

Of course, we are more than happy to help answer any question about EPLI for your studio or any other questions about gym or studio insurance.

 

 

 

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