Insuring Your Pilates Business Assets
Opening a Pilates studio requires a lot of hard work, dedication and financial investment. In addition to supplying cash to cover the rent or a lease on a building, advertising and marketing as well as payroll for your employees, you’ll need to set aside a significant amount of money for equipment. Even if your business focuses on mat Pilates only, you’ll still need to spend some cash as you launch your business. For those who plan to offer the full gamut, the monetary outlay will be much greater. In either case, it makes good sense to also carry enough insurance to cover any claims arising from accidents related to faulty devices or misuse.
Depending on where you purchase your equipment, prices will vary. For instance, at Amazon (www.amazon.com), you’ll find everything a well-equipped Pilates studio needs, from mats, rollers and power cords to ballet barrés, toning towers and reformers. Lower-ticket items might require a financial investment of less than $100—but when it comes to larger pieces, you could be talking about several thousand dollars.
You may decide to budget for high-end equipment as a safeguard against faulty devices, poor craftsmanship or substandard materials. But even if you purchase well-known, well-constructed brand name items backed by a manufacturer’s guarantee, there may still be occasions when an accident related to a piece of equipment results in a lawsuit. To protect your investment, your business and your reputation, you should make insurance one of your top priorities.
Even something as seemingly benign as Pilates balls can cause serious injury to your clients. The U.S. Consumer Product Safety Commission reported injuries from these balls in 2006 that resulted in a recall of approximately 35,000 units. If a client suffered even a minor injury and filed a claim, you might have faced costly litigation.
Consider the statistics: according to Thomson Reuters Current Award Trends in Personal Injury 54th edition (http://www.iii.org/graph-archive/96044), product liability claims in 2013 resulted in a median award amount of $3.1 million; that’s an average of $6.3 million per award.
And if a client files a claim related to an equipment-associated injury, you might end up paying for the accident repercussions, and also incur hefty legal fees, which could cause serious damage to your balance sheet. SNL Financial LC (http://www.snl.com/), a global market intelligence firm, reports that defense costs and cost containment expenses, i.e., the cost of settling a claim, which includes defense, litigation and medical cost containment, can take a big bite out of your revenue stream. According to the firm, in 2013, defense costs totaled $1,166,236, which was 75.1 percent of incurred losses. That figure decreased a bit in 2014, but still came to $952,997, 77.4 percent of incurred losses.
Regardless of the dollar amount involved, you can’t afford to lose revenue due to insurance claims. Many insurance policies designed for the Pilates industry offer significant coverage for a small premium. With minimal investment you can protect your clients and your business from unnecessary financial disaster and ensure that your business remains viable. When making that all-important to-do list as you review necessities for your Pilates business, don’t forget to make insurance a priority. Both you and your clients will appreciate it.