Tips for Gym Owners to Avoid Liability in the COVID Era

It's no secret that the pandemic we're experiencing has transformed how the fitness world operates. The regulations that were in place prior to COVID-19 have changed. As a result (and in order to protect your business), your legal agreements must change, too.

Look, I get it, the law is not something you want to deal with. It can be confusing, stressful and frustrating. I hear you, and I'm here to change how you think about the law. Not only is it extremely important for your business and gym (especially in the context of COVID), it can actually be fun. Yes, you read that right. Fun!

There are certain steps you can — and should — take to ensure your business, practice or studio is secure in this new legal landscape. As we move further into the second quarter of 2021, here are the key legal essentials to have in place for a strong, secure foundation.
 

Create a solid waiver
In its most basic form, a waiver of liability protects you from being sued. Whether it's for a regular gym membership, hosting a Pilates class or teaching a kettlebell flow via Zoom or Instagram Live, you'll need a waiver of liability before working with your clients.

The following four-step guide will provide a locked-and-loaded waiver of liability for your business:

• Clearly define the activity you and your client will participate in. What is your role in this activity and what does the activity entail?
• Communicate the risks. Be open and honest in your communication, including what can go wrong in the course of the activity.
• Client makes a choice. Does the client understand the risks involved and voluntarily agree to engage in the activity?
• Client signature. Have the client sign the waiver to waive future claims and release you from liability.

The key is to be open, honest and clear. A waiver of liability will not protect your business if said waiver contains ambiguous terms. This is why it is so important that you understand your business and what parts of your business the waiver of liability covers.

You'll also want to pair your waiver of liability with professional liability insurance — a match made in legal heaven. The amount and type of insurance you purchase could cover anything over and above the contents of your waiver of liability.
 

Re-evaluate service agreements
Update your membership or service agreements to protect your business from chargebacks or disputes. Adding some simple legal language goes a long way in protecting you against cancellations or terminations made outside the scope of your agreement.

For example, define your services as being offered both online and in-person so your members know they aren't entitled to a refund if you cannot offer in-person classes. You should also add a force majeure clause to your agreements to protect you from unforeseeable circumstances that might prevent you from fulfilling your contract.
 

Re-sign agreements now
Use recent changes in the fitness industry, and the way in which we provide our services, as a catalyst to get all of your agreements down in writing. Understand and be confident in your relationships. There has never been a better time to reorganize your written agreements to suit the new needs of your business.

This is your best opportunity to make sure everyone with whom you have a business relationship has signed an agreement that openly and honestly communicates your expectations.
 

Distinguish between agreements
Are the amazing individuals that help your business considered employees or contractors? This is one of the most common, important agreements you will come across in your business, as there are operational and legal implications that attach to each class. What's the difference?

Employees are generally under more of the employer's control than contractors. Employees have set hours, complete work as instructed, use the business' property to carry out their tasks and may wear the business logo or uniform. Employees have rights under employment legislation — think maximum hours, statutory holiday pay or rules around leaves of absence. And since you love and trust your employees, you'll want to make sure their legal entitlements are respected.

A contractor is essentially an individual or a group with a specialization who you hire to perform work for your business. They have control over their schedule, freedom to choose how they carry out their work, use their own materials and may contract out their services to many different people or businesses at once. Think of a bookkeeper, graphic designer or an expert in the trades.

Why does it matter? In short, the distinction between employees and contractors matters because of the tax implications. As a business owner paying an employee, you deduct taxes for them, which is reflected on the employee's pay stub. But when you pay a contractor, you pay them in full and they are responsible for taking care of their own taxes later.

So think of employees and contractors as two separate streams. How they each navigate their path is different, their tasks and processes are unique, but they return to the same body of water — the ocean that is your business.
 

Learn and adhere to municipal laws
Depending on where you live, your jurisdiction will give you instructions on the parameters within which you're allowed to operate. We've worked with yoga professionals in countries all around the world. The principles are typically the same, but some nuances are different.

Make sure to review the municipal laws of your jurisdiction. These laws could include regulations on indoor/outdoor classes, entry access, gathering size, protective gear and cleaning standards.

Strictly adhere to these rules. If you don't, a client could make a negligence claim against you, which would expose you to liability. Following the rules is the easiest and most basic way to protect you and your business. Post the rules publicly in your studio. Have a Zoom call with your staff, record it, discuss the rules and keep each other accountable.
 

Be proactive. Be safe.
The world needs you and your wellness offerings now more than ever, so thank you for chosing to show up, be a leader and make a difference.

While this period of time has challenged the fitness industry, it has presented us with an opportunity to strengthen our businesses. Use this time to be strategic. Make your business stronger and more legally protected than ever.

Listen to Cory Sterling's conversation with Andy Berg on the Athletic Business Podcast here: www.athleticbusiness.com/CorySterling

This article originally appeared in the May 2021 issue of Athletic Business with the title "Legal essentials for gym owners in 2021." Athletic Business is a free magazine for professionals in the athletic, fitness and recreation industry. Click here to subscribe.