Martial Arts Insurance: How a Guest Instructor Can Kill Your Business. Literally.
Listen to the interview with Jennifer Urmston of Sports and Fitness Insurance or read the transcript below.
John Graden: It's a common occurrence in a Martial Art's School, a Buddy of yours says 'Hey! I liked to teach a seminar for x amount of Dollars' and you promote the seminar and you bring the Guy in, I used to do this all the time with Joe Lewis and Bill Wallace and a bunch of other Guys.
I've also seen Schools that rent their space out in the Mornings to Yoga or Tai Chi or Aerobics and on the Weekends, sometimes even to Churches on Sunday's, this is a common occurrence, there can be serious repercussions if you do not take the proper steps to structure this arrangement and Jennifer Urmston from Sports and Fitness Insurance Corporation is here to tell you exactly, how to structure that and to also share with you a seriously tragic story about a School who had the Nightmare of Nightmares happen during a Weekend at Self Defense Seminar with quote - a Buddy.
Jennifer starts by telling us the first and most important question to ask anyone who wants to rent our School, or we bring in for a Seminar. Take it away Jennifer.
Jennifer Urmston: Does the person wanting to come, use your facility to teach their class, regardless of what kind of class it is, do they carry their own Insurance? It is the number one question, is do they have their own Insurance and number two, are they requiring their Participants to sign a liability waiver. I recommend to every Martial Arts School, get proof of Insurance before you rent space to anyone, teaching any kind of class, whether it's Yoga, or Tai Chi or Kick Boxing or Self Defense, it doesn't matter, make sure they have their own insurance and make sure that they are having their Members or their Participants sign a waiver.
And the School Owner should really see that, to have proof of it before letting the people come in and it can be a Buddy that they've known a long time or it can be someone that just, you know, found that by driving by, the Instructor, really has to carry their own Insurance or if you want that Instructor to work for you, you can hire that Instructor and you can have their Participants sign your own waiver and you can just pay that Instructor whatever your wage is or whatever, your fee per head count is, but that person, if they don't have insurance, any injury with their Students could be coming back on you and your Business with you not having a signed waiver in your Businesses Name and you not getting the appropriate remuneration for those people participating in your School and being on your Insurance.
John Graden: So, let's talk about the logistics of that, alright, so it's Tuesday and my Buddy says in two weeks I'd like to teach a Self Defense class on a Sunday, maybe he's got some Church friends or something he put together and he says, 'Okay, I want to teach a Self Defense Class on Sunday, I'm going to charge 20 bucks a head, I'll give you ten.' Most Guys at that point say that's great, shake hands and that's it, they help promote it. What steps specifically does that Owner need to actually do now?
Jennifer Urmston: Tell your Buddy my Insurance Company requires that I get a copy of your Certificate of Insurance and he should have it. If not he can go online and get it, we can place Individual Instructor Insurance Policies for less than two hundred dollars a year, that would cover that Instructor, everywhere that he goes to train or to work with people.
John Graden: So, if this Guy's out there doing seminars on a regular basis, that's ideal for him.
Jennifer Urmston: Absolutely, there is coverage out there for Instructors who do not own their own facility and who either work on like a rent basis like we're talking about here or on a 1099 Contract basis, they can have their own coverage and if they are teaching a class in the Church Rec Centre or they are teaching it at the Boy Scout Hut or they're teaching it at a Women's Club, they would be covered everywhere they go. So, it is absolutely crazy for the Instructors to be walking around without their own coverage, but an Individual School Owner needs to say 'Hey! Buddy.
My Insurance isn't going to let me, you know, let you be here without getting proof of your Insurance and I need to make sure that you've got your participants signing a waiver, otherwise, I want them to be signing my waiver.' They need to sign a liability waiver, that they understand they could be injured in a Class.
John Graden: And then I wonder again about the logistics of that, if it's a Sunday, does that I guess the logistics would be the Instructor, the Owner needs to come up with some way of enrolling these Students, which in a sense, flows through the School, which really, they ought to do, because they can capture that prospect then anyway.
Jenifer Urmston: That's right, that's right. Whether, it makes sense to use your after hour times, whether it's maybe it's during the day or on a Sunday, or after your Kids are done and you've got an Adults Class of some kind coming in there, it makes a lot of sense to get some revenue out of your down time, but you still want to be on site and enrol those people. I would really, highly recommend an Owner be on site or have an employee on site when an outside party is coming in to use their facility, just to make sure that the facility is properly treated and the Classes are safe.
John Graden: It's just a response, being a responsible Owner. Okay, so Insurance stories are most powerful when there is a third party story that is real and there was a hyper real incident that really illustrates this. Tell us about what just happened.
Jennifer Urmston: We did have a claim come in where, you know, a School Owner, did allow a Buddy to come in and teach a Self Defense course and there was a significant life threatening injury to a person and that Buddy did not have his own Insurance and it's going to come back on the School's Insurance and you know, the School will have a major claim and could impact their ability to buy Insurance in the future and their ability to stay in Business.
So, it is, it is, a Student got hurt with a, again, an Instructor coming in, to use the space who didn't have their own Insurance, that wasn't going through the School, it was going through this outside Instructor that he just let come in and use the space. So, it's important to make sure these outside Instructors, have their own Insurance because the claim would go against the Instructor and not against the School.
So, I just recommended don't risk your Business letting someone come in and use your space, just take a quick minute and say 'Hey! I need to make sure you have insurance and I may need to make sure your participants are signing waivers' and feel free to blame it on your Insurance Company, you're not trying to hurt your Buddies feelings, it's not that you don't like him or want him using your space, it's that you really have to and it's smart to protect your Business that way.
John Graden: What is that School facing now, in terms of potential law suits, liability, maybe criminal action?
Jennifer Urmston: I don't know about criminal action, there isn't any criminal action, but there definitely could be a law suit, there could be, you know, a life-threatening injury's going to have tens of thousands of dollars of Medical Bills that are going to show up as a claim on their record. If there's a law suit, it could be you know a significant claim on their record and it also, it's a bad business procedure to let someone use your facility that doesn't have Insurance, so that's just going to be an under writing, black mark really.
John Graden: So realistically that poor decision could cost this Guy his Business and if the Corporate Shield is penetrated, which is it usually is pretty easily, he could be facing, could is the key word, facing some personal liability as well.
Jennifer Urmston: You know, he had good Insurance in this case.
John Graden: Because he's with you Guys, I guess, this I see. [Laughs]
Jennifer Urmston: That's right.
John Graden: Yeah, good Insurance, Wow!
Jennifer Urmston: But it, but I, I share it, just that, we know that everybody gets asked for a Buddy to use a facility, it's not a good decision to let anyone use the facility without Insurance and then find out, again, supervise, watch what they're doing. When I first heard it, I just got wrenched over, like first of all we were told it was a Child to start with, but it was an Adult. And then, you know, we came out of the whole, okay, it is an Adult, the Adult's going to survive.
But the big deal for the Studios is what we've hit on is that they're all being asked to use their facility and it could be a minor claim but it could also be a Kid getting left alone in that facility with some Instructor that molests them, that's why you don't want people using your facility and just letting them go in and out.