In our new series of articles which provides legal guidance for participants in the fitness industry, we’re sharing guidance from Meridian Lawyers, who regularly advise Fitness Professionals to help them understand their risks, roles and responsibilities in an increasingly litigious and regulated environment.
In this article, Michael Bracken and Greg Bawden from Meridian identify some of the risks involved with operating as a sole trader.
Working as a Fitness Professional (FP) can be a rewarding career, but the responsibilities also carry a number of substantial and potential legal and business risks.
With Summer often bringing an increase in demand for the services of FP’s, now is a good time to check that you, and your business, are well protected.
Am I at risk as a sole trader?
It is not uncommon for FP’s to operate their business as a sole trader as this structure has a number of advantages, being relatively cheap to establish, offering autonomy in decision making and it is easy to administer which makes it an attractive option.
However, a sole trader business structure also carries with it the obligation of unlimited personal liability and lacks some of the benefits of other corporate structures in circumstances where your business or sources of income grow.
Corporate or company structures can provide an opportunity to limit some legal liabilities and by not having the benefit of limited liability a sole trader is personally responsible, without a limit, for the debts of the business and any claims made against the business. This means that all of your personal assets, including any assets jointly-owned with another person, such as a house, may be at risk should a claim be made against you.
Personal liability exposure.
There are a range of business and legal risks which fitness FP’s must navigate.
In one example which occurred in 2017, a personal trainer, and franchise gym where he worked, made news headlines when the gym was sued for $200,000 by a client who had to spend a week in hospital after being injured during his training session, despite complaining about feeling unwell during his session.
To make matters worse, the gym claimed that the uninsured personal trainer was not its employee, and therefore could be personally liable for any damage.
This example and other similar cases, illustrate how important it is to take precautions to protect yourself, and be proactive, as good intentions will not be enough.
7 steps to help lower your risk.1. Assess and be aware of the legal risks, know your legal responsibilities, and the legal standard to which you are required to perform including professional standards and guidelines. Overall, know your client and manage the legal risk having regard to the client profile. 2. Use a simple written contract containing terms and conditions which clearly describe your services, responsibilities and the limits. Do not rely on unstructured or verbal assurances to determine your obligations. 3. Ensure that all agreements or arrangements with others (partners, employees & contractors, franchisees) are properly documented; and before signing anything, make sure that written documents accurately represent any verbal agreement reached. 4. Be vigilant with your clients on an ongoing basis – keep monitoring and ensure you stay informed. 5. Be adequately covered for your business and personal risk by taking out the appropriate insurances, such as professional indemnity and public liability insurance. 6. When in doubt, seek legal assistance and advice. Just like people seek your help with their health and fitness needs and goals, referring to experts is always advised. 7. Keep accurate records of all correspondence, documentation and agreements. This would includes any email correspondence.
Fitness industry professionals have a duty of care to their clients and must follow professional standards and guidelines.
Meridian Lawyers can help you to manage the risks, understand the regulations that may apply to your business and provide clarity when considering your business structure and contracts.
Meridian Lawyers corporate and commercial legal team has dedicated expertise in the health and fitness industry and regularly advises gym businesses and fitness professionals on a range of matters such as:
- Professional negligence and public liability claims
- Complaints and demands for compensation
- Business restructures and advice on business and asset protection
- Regulatory issues relevant to fitness professionals and businesses
- Franchise and employment agreements and other contractual matters.