Public Liability

PUBLIC LIABILITY - For Martial Arts & Fitness Clubs

PUBLIC / PRODUCTS LIABILITY Most people feel this insurance is the first line of defence for their business when this is not true. Applying the appropriate risk management strategies and polices to prevent an incident is the first thing to secure. Next is using an appropriately worded waiver form which can strengthening your defence in a claim.


What level of liability do you need?
There are industry standards that professional bodies will recommend, but ultimately you will make that decision on the level of cover you require. The venue / landlord may specify a minimum limit of 10mil or 20mil Public Liability. About 20% of the fitness / martial arts industries end up with the higher cover. You may pay around 25% more for the 20mil cover.


A lot of martial arts schools have included a small gym area with some opting to have a much bigger space. It is important to know the insurance risk on martial arts activities is different to the operations of a full or hybrid gym set up. It is essential to let the broker know what that percentage of space is allocated to each activity to provide the most appropriate policy.


Public Liability comes with Professional Indemnity / Civil Liability

Business Owners generally just take up Public and Products Liability (cover limits from $1mil - $20mil) with $10mil being the industry standard. We find that larger schools with multiple branches and staff, along with associations often include Management Liability to protect staff / directors on an individual basis. This is being taken up more often, especially as more business owners realise, the potential gap in their overall company operations and as the price is now very reasonable to add it on.


CODE OF PRACTICE - BUSINESS OBLIGATION School / gym owners have a moral, ethical and legal obligation to operate around the industry standards (a combination of business / coaching / legal compliance). As in many industries some operators may choose to just do their own thing without regard for these standards. This of course reflects in a negative manner on those that do the right thing and the industry itself.

Instructors / coaches give advice / direction on how to train, they match students together / set up scenarios and sometimes they get it wrong. Sometimes an incident happens, another time it could be the student not following the direction of the teacher.


What about - Personal  Injury / Income Protection

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PLEASE THROUGH OUR FAQ TO HELP YOU BETTER UNDERSTAND THIS TYPE OF SPORTING INSURANCE

  • What level of liability insurance do you need?

    The industry standard is $10mil but venue and landlords are asking for $20mil. This is also packaged with Professional Indemnity or Civil Liability of $5mil - $10mil but generally the lower is enough.

  • Is there an excess to pay when you claim?

    As a standard there is usually $1000 or up to $5000 deductable with public liability insurance in the event you need to claim. However you can access a NIL Excess policy through us.

  • Will a public liability claim against your gym, raise your insurance renewal costs?

    Yes it can, especially if it is a significant amount that has been paid out. Other factors contributing to this price hike will be that the gym didn’t have very good incident reporting process, or the client didn’t sign a waiver, or the waiver wasn’t appropriate, the instructors were not industry qualified, or the operator was grossly negligent operating unprofessionally.

  • If the insurer has put up your insurance premium due to a claim, can you just switch insurers to get a better deal?

    You can ask your broker to try other insurers, but you will have to disclose all your previous claims for the past five years. There are a limited number of insurers that cover gyms and virtually only two, that will include martial arts. Your broker may recommend staying with the same insurer with a premium increase for 1-2 years rather than go to market. Having your public liability claim processed painlessly, should give you confidence, that you have the right insurer, as some that are cheaper, maybe a nightmare in the claims department. Your broker will advise you on the right insurer, based upon claims handling and price, as they have relationships with a number of them.

  • Why can’t some brokers get the best rates for your gym?

    - Some brokers belong to a buying group so their volume gives them better buying rates

    - Some brokers only get quotes from a couple of insurers and not from the full market

    - Your gym may have had a number of claims, so your premium maybe loaded or terms not offered

    - You may conduct activities that only a few insurers will cover reducing options

  • How much is martial arts insurance?

    Prices will vary based upon the number of members, the annual turnover, state stamp duties, level of cover, broker fees and insurer's rates. You can obtain 10mil PL & 5mil PI/CL for under $600 per year for a small club.

  • How can club owners reduce their public liability insurance?

    - Have a low claims ratio and/or have high level risk management policies.

    - Have the highest qualifications for their instructors and constantly improve them

    - Regularly do your own or get an independent risk assessors to review/audit your facility. 

    - Invest in more cameras to capture incidents, making it easier for insurers to defend against a claim.

    - Ask their broker for a multi policy discount (purchase a biz pack or another policy)

    - Find a broker with preferred rates (special program) where they pass on the rates to the client.


  • What do you do in the event of a public liability claim against your gym or yourself?

    - inform your broker of an incident that may develop into a claim

    - do not compromise the insurer’s ability to defend the claim.

    - capture all the information relating to the incident in a comprehensive report (incl witnesses, video footage etc)

    - capture all communication with the injured party relating to the incident (phone, emails, social media posts)

    - do not admit fault to the injured party

    - do not hand over your insurance details to the injured party 

    - do not to offer an injured person a financial payout as this may be deemed an admission of liability

    - do show concern to the injured party, put their membership on hold and wish them a speedy recover to return


  • Are all club public liability claims defended by the insurer?

    No, as it depends on a number of factors that need to satisfy the insurer’s criteria. They have the right to decline a claim, if they are not met. Here are a number of items, that may prevent a claim from being supported by an insurer.

    - If there isn’t a proven physical injury registered recorded at a training facility.

    - If the gym doesn’t have a current financial policy.

    - If the club didn't pay the premium before the end of the insurer’s trading terms.

    - If the club hasn’t met their obligations of the policy


  • What is the time period for a public liability claim to be accepted?

    The maximum period is 7 years, but we have only experienced claims going back 4-5 years. We found that a number of gym owners didn’t keep adequate records of incidents. This would then compromised the insurer’s ability to defend the claim, making it harder to win the case. This is why it is essential for gym owners to keep comprehensive records of all claims for 7 years. 
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