MCIT members who offer or are thinking about providing an exercise facility for employees should consider the risks of operating such a facility and be aware of how MCIT’s coverage applies to injuries and damages.

How Is Property Coverage Implicated?

Most exercise facilities contain costly equipment, such as treadmills, stationary bicycles, weight training machines and free weights. This equipment is either owned by the member or leased from a vendor.

MCIT’s property coverage (contents) protects member-owned equipment from loss including damage caused by fire, water, theft and vandalism.

Members are required to add the equipment to their MCIT property schedules and should include the value of the equipment in the contents limit at the location of the equipment.

MCIT’s property coverage is provided on a replacement cost basis, so the value of the equipment provided to MCIT should reflect the cost of replacing it with equipment of like kind and quality.

For equipment leased from a vendor, responsibility for coverage should be clearly identified in a contract between the two entities. If the vendor provides coverage on the equipment, the member should verify the same coverage on a certificate of insurance provided by the vendor. The preferred type of coverage is considered all-risk, replacement cost property (contents coverage).

How Does Liability Coverage Apply?

The greatest liability risk posed by operating an exercise facility is the potential for bodily injury. Injuries to facility users can occur from overexertion while exercising, unfamiliarity with the use of the exercise equipment, being distracted while using the equipment or malfunctioning equipment due to design or maintenance issues.

Best practices for managing the liability risks of operating an exercise facility include:

• Establishing a check-in policy to monitor and manage who uses the facility
• Posting rules and hours of operation
• Ensuring that all users are trained on equipment use
• Properly maintaining equipment and documenting (and retaining) all inspections, adjustments and repairs
• Posting how users should report malfunctioning equipment or other issues in the exercise area
• Posting emergency contact information

MCIT recommends that all users sign a document at registration and orientation that acknowledges:

• They understand the facility’s rules and equipment use
• They understand they are participating at their own risk and are responsible for their own readiness and ability to participate.

Users should be encouraged to discuss their ability to participate with their doctor.

Does Workers’ Compensation Coverage Respond to an Employee’s Injury?

Generally, employees who sustain injuries while engaged in exercise in the workplace are not be eligible for workers’ compensation. Even though the injury involves an employee in the workplace, workers’ compensation coverage does not extend to exercise that is voluntary and not part of the employee’s job duties.

When workers’ compensation does not apply, an employee’s injury may be covered under the member’s general liability coverage, such as a claim alleging the member’s negligence or failure to properly maintain the equipment.

The Workers’ Compensation section of the MCIT Coverage Document gives more details about this.

Nonemployee Use of Exercise Facilities

Third parties could bring a liability claim if allowed to use the exercise facility. These include family members of employees, tenants and employees of related county organizations. Therefore, it is important to establish who has access to the exercise facility. Access should be limited to registered exercise facility users.

MCIT’s liability coverage also includes coverage called medical payments coverage. This provides up to $2,500 for medical treatment resulting from injuries received on a member’s premises. Coverage does not extend to “covered parties,” which is defined in the MCIT Coverage Document to include employees of the MCIT member, as well as employees of any tenant of the member.

Medical payments coverage is available regardless of fault and can be applied to medical bills incurred within one year of the accident date. The coverage applies to first aid, necessary medical, ambulance, X-ray and dental services. The coverage does not extend to loss of wages or claims for pain and suffering.

Best Practices for Managing Vendor Operators

When a fitness center at the member’s location is operated by a vendor, MCIT recommends that the arrangement be formalized with a contract between the member and the vendor. The contract should identify who controls the facility and who maintains the equipment.

The vendor should follow the member’s established policies for securing insurance coverage. It should provide the member with a certificate of insurance naming the member as an additional insured.

Risk Management Recommendations

To help reduce risk exposure and loss, MCIT recommends that members:

• List owned exercise equipment on their MCIT property schedule with the replacement cost limit and the location of the equipment.
• Determine whose responsibility it is to cover any leased equipment. Coverage may be the vendor’s responsibility, or it may be the member’s responsibility.
• Maintain exercise equipment properly whether owned or leased. Retain all documentation relative to inspections, adjustments, maintenance and repairs.
• Use employee notices as discussed in Employer Liability for Sponsored Exercise Programs to alert employees that injuries during their voluntary exercise will not be covered by workers’ compensation.
• Recommend all users of the facility consult a doctor prior to starting an exercise program.