ERICAN The Publication for __Afl&B~dar Insurance Agency Succes ~j~J:uh1tt1G1IiF Articles Subscribe Products Conferences My Account About Us Contact Us Ad I’ Arranging insurance for health clubs by James L Foley, CPCU Health clubs are great kr our agency’s fiscal fitness. AT IriterWest Insurance Services we’ve found that health clubs are great for our agency’s fiscal fitness. Using an insurance package geared to this niche, we~e built a book of some 400 clubs. Furthermore, the outook for our specialty is bright Fitness-conscious baby boorners continue to be heavy users of health dubs. Meanwhile parents, aware that many schools are curbing their physical education programs are enrolling their children in health clubs. Aware of such trends, the International Health, Racquet and Spoc-tsclub Association (IHRSA) has a goal of getting 50 million people into its members’ clubs by 2010, That would require the industry’s 17,000 commercial health clubs to expand to about 25.000. Things weren’t always so rosy for this niche. When InterWest started worldng with health clubs back in 1984, the industry did not have the best reputation- Some clubs would open in strip malls, heavily promote the sale of annual or even lifetime memberships, then fold six moths later-without refunding any of the membership fees. In California, health dubs were one of the top sources of complaints to the 8etter Business Bureau. As the hard market hit clubs across the board had a difficult time getting coverage and were relegated to the surplus-lines market In this environment however, our agency saw an opportunity. We knew the better clubs were competing for business by offering monthly memberships, which provided patrons with greater convenience and shielded them from the financial risk of long-term membership contracts. These tended to be owner-managed clubs that held memberships in organizations like IHRSA Unlike the ‘fly-by-night” dubs, they also had a substantial investment in exercise equipment and such facilities as swimming pools and racquet-ball courts. To us, they looked like pretty good risks, and we put together a customized program for them and placed it with lndustiial Indemnity Co. We called the program FitriessPak and copyrighted the name. Today, we place the program with TIC Insurance through K&K Insurance Group, which has given us an exclusive in the health-dub niche in 10 Western states. We continue to write most of the business ourselves (I’m one of three producers for the program, along with ken Mckay and Steve Azevedo), although we also have a small amount of brokerage business, Our program is quite broad. For property exposures, it includes business income, 0 0 Letters Down to Cases For the Manager Policy Issues Study Sales Automation What’s Going On New Policies Technology Update L i~’i Advertiser Index An Agent’s Guide to Web Sites An Agent’s Guide to Automation and Technology Advertised Products Market and Service- Provider Directories Ind ...

1. ERICAN
The Publication for
__Afl&B~dar
Insurance Agency Succes
~j~J:uh1tt1G1IiF Articles Subscribe Products Conferences My
Account About Us Contact Us Ad I’
Arranging
insurance for
health clubs
by James L Foley, CPCU
Health clubs are great kr our agency’s
fiscal fitness.
AT IriterWest Insurance Services we’ve found that health clubs
are great for our
agency’s fiscal fitness. Using an insurance package geared to
this niche, we~e built
a book of some 400 clubs. Furthermore, the outook for our
specialty is bright
Fitness-conscious baby boorners continue to be heavy users of
health dubs.
Meanwhile parents, aware that many schools are curbing their
physical education
programs are enrolling their children in health clubs. Aware of
such trends, the
International Health, Racquet and Spoc-tsclub Association

2. (IHRSA) has a goal of
getting 50 million people into its members’ clubs by 2010, That
would require the
industry’s 17,000 commercial health clubs to expand to about
25.000.
Things weren’t always so rosy for this niche. When InterWest
started worldng with
health clubs back in 1984, the industry did not have the best
reputation- Some clubs
would open in strip malls, heavily promote the sale of annual or
even lifetime
memberships, then fold six moths later-without refunding any of
the membership
fees. In California, health dubs were one of the top sources of
complaints to the
8etter Business Bureau. As the hard market hit clubs across the
board had a
difficult time getting coverage and were relegated to the
surplus-lines market
In this environment however, our agency saw an opportunity.
We knew the better
clubs were competing for business by offering monthly
memberships, which
provided patrons with greater convenience and shielded them
from the financial risk
of long-term membership contracts. These tended to be owner-
managed clubs that
held memberships in organizations like IHRSA Unlike the ‘fly-
by-night” dubs, they
also had a substantial investment in exercise equipment and
such facilities as
swimming pools and racquet-ball courts. To us, they looked like
pretty good risks,
and we put together a customized program for them and placed

3. it with lndustiial
Indemnity Co. We called the program FitriessPak and
copyrighted the name. Today,
we place the program with TIC Insurance through K&K
Insurance Group, which has
given us an exclusive in the health-dub niche in 10 Western
states. We continue to
write most of the business ourselves (I’m one of three producers
for the program,
along with ken Mckay and Steve Azevedo), although we also
have a small amount
of brokerage business,
Our program is quite broad. For property exposures, it includes
business income,
0
0
Letters
Down to Cases
For the Manager
Policy Issues
Study Sales
Automation
What’s Going On
New Policies
Technology Update
L i~’i
Advertiser Index
An Agent’s Guide to Web
Sites
An Agent’s Guide to

4. Automation and
Technology
Advertised Products
Market and Service-
Provider Directories
Industry Organizations
Calendar of Events
Agents Guide to Programs
Other Insurance Websites
Submit a Topic
Calculators
http://www.agentandbroker.com/FSG/AgentB
roker/Maifl±NaVIArtiCIeS/ArCh1%H~th’~L 8/912002
leasehold improvement and ordinance or law coverage. For
liability, it covers
premises, products, liquor, nonowned auto, employee benefits
E&O and some
I’ ) professional liability exposures. Options include coverage
for owned autos,employment practices, employee dishonesty,
tanning services, and flood and
earthquake. Under a separate policy, again placed through K&K
insurance, we also
can provide workers compensation insurance.
We have a separate program that provides professional and
general liability
insurance for personal trainers and fitness instructors. It is
endorsed by the
American Council on Exercise, the nation’s leading certification
body in its field.
Available limits range from $500,000 to $5 million. Through

5. the association, we
insure some 4,500 trainers and instructors, who pay annual
premiums ranging from-
$124 to $231. They receive individual certificates off a master
group policy written
for the program.
Prospecting
Most of our business comes from referrals and from our
involvement with
associations, both the IHRSA and state health club associations
in California and
the Pacific Northwest. We have the endorsement of these
associations and pay
them a small override on business sold to their members, Each
risk is individually
undeiwritten, however we have no obligation to insure an
association member that
does not meet our underwriting criteria. While we already know
most of the
established dubs in our marketing territory, we learn of new
clubs primarily through
our relationships with the associations. The associations also
are our chief vehicle
for promoting ourselves to clients and prospects. We exhibit at
the associations’
conventions and contTibute articles to their publications.
When we meet with prospects, we naturally hope to obtain their
business. But if we
don’t, we at least want to make a good impression and build our
credibility, because
there’s always next year. Consequently, we are happy to quote
and don’t require the
prospect to give us some sort of upfront commitment. Since

6. we’re going to only one
market quoting is not an expensive proposition for us, and we
dose 50% of our
proposals anyway. So we don’t push too hard. Wien prospects
turn down our
) proposals, we invite them to call us anyway for advice on risk
management or othersubjects. By taking this tack, we often
eventually win a prospect’s business after the
client experiences an uncovered claim or encounters some other
problem.
When gathering information about a club, one of the first things
we ask to see is its
membership agreement. Such agreements typically indude
waivers and
assumption-of-risk language that have been supported by case
law in practically
every state. We’ve had a nationally known expert in waiver
language prepare a
handbook on This subject for us. We mail it to all our clients
and sometimes give it to
prospects. While being careful to point out that we’re not
lawyers, we suggest that
the clubs show the handbook to their counsel for possible use in
drafting or
strengthening a membership agreement
While membership agreements are great for transferring risks
away from health
dubs, claims still arise. How we deal with them is one important
way that we
differentiate ourselves from competitors. We turn such incidents
over to an in-house
claims department staffed by two people with a combined 25
years of experience in

7. this niche. Our claims people are excellent at getting the club
owner out of the
middle of slip-and-fall claims and similar incidents. They
contact the injured person
and review the membership agreement’s waiver language with
him or her.
Sometimes, an injured club member who either doesn’t have
health insurance or
has a high deductible may decide to pursue a claim despite the
waiver. Depending
on the facts of the case, our claims department may conclude
that it makes sense to
use our med pay claims settlement authority. We can settle
claims up to $1,000,
which sometimes prevents a small incident from becoming a big
claim.
On larger claims, particularly property losses, our claims people
are good at pointing
out to adjusters where coverage exists in our program’s forms.
On liability losses,
we fight the daims that we feel should be fought, but if we feel
that our insured does
not have a strong case, our claims people are adept at
explaining as much to the
dub owner and “selling the settlement.’
~8/9/2002
Our claims people are key members of our team. They attend
trade shows with us,
where they always are greeted warmly by our clients. They help
us gain accounts

8. J and are a key factor in our high retention rate.
Evaluating the risk
We have a comprehensive survey form that we use to gather
data for a submission.
In regard to property exposures, we ensure that any kitchen
areas have Ansul-type
fire suppressions systems and that sprinlder systems are begin
checked at proper
intervals. For any dub situated in a building more than 25 years
old, we like to see
that the roofing, plumbing, wiring, etc. have been updated. Our
program includes
ordinance or law coverage, which means we need to take care in
evaluating older
buildings. While once inspecting a club in Los Angeles, we
learned that the
applicable ordinances could compel the club to erect a parking
garage in the event
of any loss that required the dub to obtain a building permit
Rather than face the
possibility that a $50000 kitchen fire could force our insurer to
pay for a $1.5 million
garage, we politely ended our solicitation.
Our program covers business personal property for replacement
cost. For even
small health clubs, their investment in cardiovascular-fitness
equipment often runs
to $250000 or more. Sometimes we find a dub owner’s
estimation ci the value of
this equipment is way off So we ask the owner to take the time
to see what the
equipment cost them and insure it accordingly
In regard to liability exposures, swimming pools and Jacuzzis

9. are always of major
concern. The pools typically are used for such activities as lap
swimming and water
aerobics, rather than for recreational swimming. Private clubs
with adult-only
membership policies normally are not required to post
lifeguards at the pools, but
they are required to make periodic “safety sweeps” of the pools
and such other
areas as locker rooms, saunas and steam rooms. We ensure that
these sweeps are
being properly documented.
Given that unfit people sometimes exercise too strenuously at
clubs, heart attacks
are not uncommon. In fact we experience five or six fatalities
per year among the
dubs we insure. The waiver language in the membership
agreements again helps
shield the clubs ftom liability, but we also require club staff
members to be CPR
qualified. Some clubs are now purchasing automated external
defibrillators. Their
use in emergencies is covered by a federal “Good Samaritan
statute, so they don’t
present an additional liability risk to the clubs.
The nursery/daycare exposure is an important one that our
program covers. Most
health clubs have areas in wtiich children are watched while
their parents exercise.
The dubs usually are not required to be licensed as daycare
facilities, since the
chIldren generally are not kept for more than a couple of hours,
and their parents
are on premises. Nevertheless, we need to obtain detailed

10. information about such
mailers as how many children are typically present at onetime,
how many staff
people or volunteers are watching them, how these people have
been screened,
whether the attendants have CPR and first-aid training, etc.
The application is quite detailed. In addition to the information
cited above, it
requests specifics on the maintenance of equipment, the use of
signage to indicate
the proper use of equipment and off-limit areas, a breakdown of
receipts for the
various products and services the dub sells, and the experience
and qualifications
of management and employees. In addition to the completed
application, we obtain
three-year hard copy loss runs and a copy of the dub’s
membership agreement for
the submission. Occasionally, financial statements are required
Wan underwriter’s
credit search turns up something questionable.
Once an account is written, we stay in touch to provide any
services the client might
need. W~ile we don’t tell clients how to run their clubs, we do
often recommend that
they purchase a copy of the American College of Sports
Medicine’s Health/Fitness
Facilities Standards and Guidelines. We also distribute brief
case studies drawn
from our claims files. We publish this information in a
newsletter, the Fitpak FIle, that
we plan to start distributing electronically.
http://www.agentandbroker.comffSG/AgefltBrOker/Maifl+~~4~

11. t1des/ArchivefHe&th+CI ... 8/9/2002
RMI 2101
Fall 2015
Homework Assignment 2
12 Points
Due on Wednesday, September 16, 2015 AT THE BEGINNING
OF CLASS
Be careful to follow the Guidelines for Homework Document
located in the Course Documents
Section of Blackboard.
Hint: Read the questions carefully and be sure that what you
write answers the questions.
Many times students give correct information in an answer but
that information is not the
answer to the question.
1. Refer to the bulk pack article in Topic 2: Arranging
Insurance for Health Clubs.
Among other things, this article discusses methods of loss
exposure identification along
with various types of loss exposures that are somewhat unique
for health clubs. You
should make sure that you view the pre-recorded lecture
concerning “Methods of

12. Exposure Identification” under Topic 2 AND read the
discussion in Chapter 2 of your
text concerning ‘Methods of Exposure Identification’. You
should do both of these
before you attempt to answer this question.
Identify and briefly discuss two loss exposure identification
methods illustrated in this
article. Make sure you state specifically what type of loss each
method is seeking to
identify. [6 points]
2. Refer to the bulk pack article in Topic 2: The Only Lifeline
was the Wal-Mart.
Consider the discussion of Risk Management Program Goals in
Chapter 2 of your
textbook. Based on your reading of this article, briefly discuss
two specific examples of
these goals that are illustrated by Wal-Mart. Specify whether
your example illustrates a
pre-loss goal or post-loss goal. [6 points]
RMI 2101 – Introduction to Risk Management
Fall 2015

13. Guidelines for Homework
1. Homework Assignments are due no later than the beginning
of class, i.e., 4:00 PM. In order
for it to be considered to be submitted ON-TIME, you have to
hand a hard copy of your
homework to Erika or Green as you enter the classroom. Please
have your homework ready
for collection as you enter the class. In order to receive credit
for your homework, you will
ALSO need to submit your homework to Safe Assign within 48
hours after it is due.
2. No late homework is accepted for full credit. ‘Late’ is
defined as homework submitted to me
after class has started.
a. Any assignment submitted once homework collection is over
is considered ‘late’.
b. Late homework will only be accepted up to 24 hours after it
is due and must be
handed to me personally. It is your responsibility to find me.
Please note that you
will still need to submit late homework to Safe Assign.
However, Safe Assign will
close 48 hours after the due date and time. If you do not submit
your homework
assignment to Safe Assign before it is closed, your homework
will not be graded and
you will receive ZERO points for that homework.
c. The penalty for late homework will be a reduction of your

14. score by 25% of the total
points available for that particular homework. For example, if a
homework
assignment is worth 16 points and you turn it in late, then your
actual score will be
reduced by 4 points.
d. Homework will not be accepted beyond the above deadline.
Please note that Safe
Assign WILL BE CLOSED 48 hours after it is due.
e. I do not accept faxed, emailed, or mailed homework. I also
do not accept homework
placed in my mailbox or placed under my office door. Late
homework must be
handed directly to me. NO EXCEPTIONS.
f. Be careful!! I may not be on campus the day after homework
is due or I may have to
leave campus right after class. If you do not hand in homework
on the day it is due at
the beginning of class, you assume the risk that you may not be
able to hand it directly
to me and will receive a zero for the homework.
g. You always have the option to give me homework EARLY if
you will not be in class
the day it is due.
3. You should work independently of others in the class. No
“group” solutions will be accepted.
Refer to ‘Academic Integrity’ in the syllabus.
4. Your homework assignment must have a cover page attached

15. to it. This page should be
STAPLED to your homework. This page should contain the
following information.
a. Your name
b. Your Seating ID
c. TU ID number
d. The name of the item being submitted [e.g., Homework
Assignment 1]
e. The date you submitted the document.
Page 2 of 2
5. Please abide by the following guidelines when completing
your Homework Assignment.
a. In the upper right-hand corner of the first page of your
homework, indicate your name
(as it appears on the class roster), and your TU ID number. On
all subsequent pages of
the assignment, put your TU ID number OR your name in the
upper right hand corner.
b. All homework must be stapled together. If it is not stapled, it
will not be accepted.

16. 6. Some Homework Assignments involve numerical
calculations. In these cases, you must show
all of your work in answering numerical problems. Final
answers must be marked, e.g.,
boxed, circled, or underlined. If you fail to show the
intermediate steps in the calculation of
your answers, then the problem is considered incorrect. If you
fail to show your work I cannot
give you any credit for your answer. No handwritten homework
will be accepted.
7. Some Homework Assignments do not involve numerical
calculations (e.g., Homework
Assignment 1). In these cases, you should answer the questions
based on the template below.
Please note that each question should be typed and then your
answer should appear below the
question. You should use DOUBLE SPACES for your answer.
No handwritten homework
will be accepted.
TEMPLATE EXAMPLE
1. The new study found that when the driver texted, their
collision risk was 23 times greater than
when not texting.
a. What is the peril involved in this study? Explain carefully.
(2 points)
Your answer should be here.

17. b. What is a hazard? Explain carefully exactly why it is a
hazard. (2 points)
Your answer should be here.
c. What if a driver texts more while driving because they have
auto insurance. What type
of hazard would be represented by this behavior? Explain
carefully. (2 points)
Your answer should be here.