Operating a successful gym is about as good as it gets for most of us. Being your own boss and helping others achieve their health and fitness goals can be quite rewarding. But it is not all rainbows and unicorns. As with any business, being a gym owner comes with significant legal risks. However, the liabilities can be greatly minimized through a bit of knowledge and a little planning.

What Are the Legal Risks?

It wasn’t long ago that I visited a gym while traveling. The gym was alright with distressed equipment that could have used a good oiling and cable changes. No big deal. Although it seemed I was always next to an elderly lady who was being led around by a trainer with questionable wisdom. The senior citizen didn’t have good stability, and her muscle tone and mass were pretty low. But the trainer kept on pushing her to do more, and through their interaction, it was very evident that this was their first training session together. Some of the advice the trainer was giving was downright dangerous. Long story short, after instructing the lady, who was probably in her mid-seventies, to do one-legged leg presses, there was an injury. Her ankle snapped. 

I’m not sure what happened after that, but I could definitely see a lawsuit happening in the future. 

A trainer’s advice leading to an injury, a person slipping on a wet floor, or even a member’s information data leak could lead to fines, court cases, and, eventually, gym closure. Unless you are well prepared.

Structure Your Gym Correctly

The very first legal decision that needs to be addressed is how to structure your gym. You essentially have three choices. 

• Sole Proprietorship: The easiest to do as you usually don’t have to file any special paperwork to form it. Many gyms start this way. But if something goes wrong, there is little protection and your personal assets will be on the line. 
• LLC (Limited Liability Company): With this, your personal assets are shielded, but the taxes are still rather simple. Plus, if you started off as a sole proprietorship, it is fairly easy to switch over to an LLC. 
• Corporation: This is more for larger gyms working with investors as it involves having a board of directors, bylaws, and annual meetings. It offers the best protection generally for your personal assets, but the paperwork and the hoops to jump through can be quite costly. 

Fitness businesses have higher liability risks than other businesses, as members may get injured through no fault of your own. Plus, there are countless members with already diagnosed health conditions. If something happens, you never know what the courts could decide. Contact a business attorney who specializes in working with gym owners. Other options would include finding a tax advisor or even a small business development center (generally at no cost) for the right guidance for your situation.

Create a Strong Liability Waiver

Every gym needs a liability waiver that will protect the business if something unfortunate happens. A waiver can greatly reduce the possible financial risk if the members, or those just visiting for the day with a daily pass, recognize that there are inherent dangers to exercising. (Through Gym Insight software, liability waivers are built into the members’ app and are signed and stored electronically for easy access and retrieval.)

There are plenty of free gym liability waivers available online. There is no sense in trying to reinvent the wheel if you don’t have to. Just be certain the waiver you have in place is best for your business.

The Right Insurance

Insurance for your gym is the financial safety net that you can’t do without. Waivers are great, but at some point, you may still be sued or held liable. By bundling general liability insurance with property insurance, professional liability insurance, and other possible options, you can often be completely covered for less than $200 a month. The Business Owner’s Policy (BOP) bundle will provide the peace of mind you need so you can focus on growing your gym.

Cybersecurity

Data privacy should be a real concern for gym owners. Remember a few years back when Yahoo! was hacked and over three billion people had their data leaked, including log-ins, passwords, email addresses, and much more? You don’t want to be the one responsible for your members’ data falling into the wrong hands.

Gym Insight software has appropriate encryption and physical security measures to protect against unauthorized access. The encrypted membership/payment data will protect both you and your members.

Trademark Your Gym Name and Logo

It wasn’t long ago that a friend of mine opened his gym, and then, after spending a good amount of money on signage and marketing, he realized there was another gym not far away with a similar name. He had to change his gym name and everything that went with it. Trademark your gym name and logo before someone else does.

Play It Safe

I have known plenty of gym owners who are winging it and do not have all the legal essentials covered. The amount of time they spend worrying about their risks could be focused elsewhere on how to keep growing their business. By being proactive with legal compliance, a gym owner is reducing their risks and creating a professional business to be proud of. It may seem difficult to do, but it’s not. Meet with the right people and protect yourself and your gym through waivers, insurance, and the right business structure.

Gym Insight

Gym Insight helps gym owners manage memberships, access, employees, and revenue—all in one fully integrated platform, with no contracts and no third-party plug-ins.

Call 855-FOR-GYMS (855-367-4967)