It’s with much pleasure that I introduce Michael Gottlieb. He’s the founder and managing director of BizCover, a leading Australian small business insurance site and the folks behind our amazing new offering for ALL qualified professionals (great coverage, no fitness registration needed). Michael has founded a number of insurance businesses since 2001, and is featured on ‘Insurance Business Magazine’s 2017 Hot List.’ Enjoy this guest post, it’s a real ‘Insurance 101’ resource.
Having your clients entrust you with their safety and well-being is a heavy responsibility, and it comes laden with risk. Protecting yourself, your clients and your business with a robust insurance policy is essential. So what should you know?
Do I even need insurance?
If you’re an independent contractor operating under an ABN, you are the one responsible for organising insurance to protect against any potential legal action arising from a claim. The same responsibility applies if you are self-employed: ‘your ABN’ means ‘your responsibility’.
Alternatively, as an employee of a gym or fitness group, the onus is on the employer to provide coverage.
Not sure about your status? You’re not alone – Personal Trainers work under variable arrangements and the lines are often blurred. Fortunately, the ATO has provided a couple of short and simple fact sheets on ‘The Difference Between Employees and Contractors’, and ‘How to Work it Out: Employee or Contractor’.
Get it right, and (most importantly) get it written down.
What insurance do I need?
We all have varying attitudes to risk and approach risk management in a different way. However, regardless of whether you like to play it safe or take a chance, you should be aware of the risks involved and the different forms of protection.
PUBLIC LIABILITY protects you and your business against the financial risk of being liable for causing injury, damage, loss or death to a third party. You have a responsibility to keep your clients and the public free from harm and any breach of this ‘duty of care’ could give someone the right to a claim. PTs are exposed to a unique set of risks here, with numerous opportunities for misfortune such as someone tripping over a kettle ball in the park or a dumbbell falling onto the toes of a client. Given the enormous financial compensation that can be required here, self-insuring isn’t really feasible either. Public Liability is a must-have.
PROFESSIONAL INDEMNITY protects professionals against legal costs and claims for damages arising from any act, omission, or breach of duty in the delivery of a service. This is crucial for PTs, as clients unhappy with their training advice can, in certain circumstances, claim compensation. Whether the claim is valid or not, PI insurance will protect you against the court costs and any compensation you’re liable for. PI is just as crucial as PL, and they are often wisely bundled together.
PERSONAL ACCIDENT focuses on you as an individual by providing up to 85% of your income in the event that you’re unable to work due to an accident. If you broke a leg or slipped and hurt your back, this policy would cover the majority of your income until you got back on your feet. You also have the option of adding Illness coverage as well for a more comprehensive income protection plan.
What am I looking for in a policy?
The composition of your policy is crucial, and cheapest is not always best. For Personal Trainers, exclusions are the key element. For example, your policy may only cover you for the gym, and not provide for training in your garage or outdoors. You also need to check if things like martial arts, boxing, and Crossfit are included, as well as contact sparring and bodybuilding. Like anything, you get what you pay for. Ask about exclusions and know what you’re getting.
How much coverage is enough?
The risks your business faces and the potential costs will determine the appropriate level of insurance. External factors such as contractual requirements or council regulations may also influence the amount of cover required. By way of a guide, the most common level of cover for PTs through BizCover is:
- $1,000,000 professional indemnity
- $10,000,000 public liability
Bundling these two policies could cost you as little as $28 per month, but most insurers offer a discount if you pay annually.
Should I be bothered?
Insurance is a strange concept, because you’re spending money on something you actually hope is a waste of money. The thing is, if something does go wrong it’ll be the best waste of money you ever spent.
You don’t need to insure everything. At the end of the day, it shouldn’t be about what you can afford to insure – it’s about what you can’t afford to replace.
BizCover™ Pty Ltd (ABN 68 127 707 975; AR 338440) is a corporate authorised representative of Mega Capital Pty Ltd (ABN 37 098 080 418; AFSL 238549). This is general advice only.