More than one in three adults in the U.S. is obese, and nearly 70 percent of American adults are considered to be overweight. Not only are there negative health consequences associated with carrying too many pounds, but also many people simply feel guilt and shame over not living up to their ideal weight.
The nonmedical weight loss business has exploded in response to the obesity problem and is, in many cases, a very profitable business for entrepreneurs. Companies that provide weight loss services brought in $6.3 billion in revenue in 2015, according to an IBISWorld report.
Nonmedical weight loss centers provide services that help clients lose weight or maintain a desired weight. Services often include the following:
Nonmedical weight loss centers vary greatly in the type of diets they espouse and the services they provide. Most use multiple locations to provide a convenient place for customers to meet, receive counseling and perhaps even shop for food, supplements or other weight loss aids. Many individual locations are owned by franchisees, offering entrepreneurs a small-business opportunity with access to larger corporate resources and name recognition.
Many weight loss centers also have a strong online presence.
Nonmedical weight loss centers face many of the same risks as typical retailers, including fire, theft, vandalism and weather events as well as slips and falls on the property and other third-party injuries or property damage. In addition, because they provide counseling services and perhaps even food or supplements, weight loss centers have professional liability exposures as well as exposures related to the products they sell.
Whether you are a sole proprietor or a franchisee, you need custom insurance coverage for the unique and not-so-unique perils that you face in your day-to-day operations.
Nonmedical weight loss centers have to protect their business property from catastrophic loss. You must protect your building if you own it as well as being able to pay your bills and resume operations if you have to close for repairs after a storm, a fire or some other unforeseen event.
You may also have a variety of liability exposures where you can be held responsible for injury or property damage to others. Slips and falls, falling store fixtures, faulty products and weight loss counseling services all leave you vulnerable to claims and costly lawsuits that could put you out of business.
Weight loss centers need business insurance to protect their livelihood from financial disaster due to property loss and lawsuits. If you operate a weight loss center as a sole proprietor or a franchisee, talk to your independent insurance agent about your need for the following types of business insurance coverage. (Note that franchisees must purchase certain types of coverage as required by their franchise agreement, but the required coverage may still leave gaps. Talk to your agent about securing comprehensive coverage.)
While you most likely lease the space for your weight loss center and do not have a building to cover, you still need insurance protection for the business personal property on your premises. Talk to your insurance agent about coverage for office furniture, fixtures, computers, signs, glass and any other contents of your space. Commercial property insurance provides coverage for property damage that occurs as a result of fire, theft, vandalism, weather events and other covered perils.
Your business property policy may also include coverage for business interruption, which helps you pay for expenses like rent and employee salaries if your weight loss center must close to make repairs after a fire, storm or some other covered event.
Liability insurance is likely the most important type of insurance for a nonmedical weight loss center. A commercial general liability (CGL) policy provides broad coverage for bodily injury or property damage that occurs on your premises or as a result of the services you provide, including the following:
CGL policies also cover your defense costs, court costs and court-ordered judgments that you must pay. It is likely that your landlord requires you to have liability insurance for incidents that occur within your leased space as well as accidents that occur outside the leased space but are caused by you, your operations or your employees.
You may want to consider a business owners policy (BOP). BOPS are designed for small businesses and include liability, property and business income insurance in one affordable package policy.
Do you deliver food, supplements or other products to your customers? If so, you need commercial auto insurance. Business auto insurance covers your company’s vehicles and drivers (cars, SUVs, vans and trucks) that are damaged or injured in a collision or some other type of event. If you or your employees drive personal vehicles for business purposes, you must have nonowned or hired auto liability coverage to protect your company if an employee is in an accident while out making deliveries.
A professional is someone who possesses special knowledge and skill in a certain area and uses that skill to provide advice and services to clients. Traditionally, this definition has applied to doctors, lawyers, architects, engineers and accountants. But today, the definition of a professional or professional service has an increasingly expanding scope, and the need for professional liability insurance is becoming more important across a wide variety of industries.
Nonmedical weight loss centers likely need professional liability insurance, also known as errors and omissions (E&O) insurance. It covers your business from negligence claims that result from mistakes or failure to perform professional services. These types of claims can easily arise when you are providing weight loss counseling to countless numbers of people. If a customer feels that negligent counseling or other weight loss services have caused harm, they can sue you – even if the claims are unfounded.
Professional liability insurance covers professionals, their partners and their employees and covers the partnership or corporation for damage caused by providing or failing to provide professional services. Most E&O policies cover judgments, settlements and defense costs. Even if the claims are found to be false, defense costs alone can be financially devastating for any company, and small businesses in particular.
There is no standard policy language for professional liability policies, and every type of professional or professional services firm has different types of exposures that need to be considered. You will need to work closely with your independent insurance agent to make sure your policy fits your needs.
Nonmedical weight loss centers may have a variety of additional exposures that can be mitigated to some extent with tailored business insurance. Your independent insurance agent can help you determine if you have a need for the following:
You should also talk to your agent about your need for product liability insurance if your nonmedical weight loss center sells special diet food, supplements or other products. Product liability insurance covers a business’s financial responsibility for losses or injuries to a user, buyer or bystander caused by a defect or malfunction of the product. In some instances, product liability insurance may also cover the manufacturer or seller of the product for defective design and failing to warn a buyer of a particular danger.
Product liability insurance is not just for manufacturers. Any company that participates in bringing a faulty product to market can be included in a lawsuit and held liable for damages to the user. The resulting payouts for medical costs, compensatory damages, economic damage, attorney fees, court costs and even punitive damages can be insurmountable for a small business.
Weight loss centers should find an independent agent in their local community who will get to know their business and serve as a trusted adviser for the long term. Entrepreneurs need a variety of advisers in their corner, and your insurance agent should be one of them.
Independent insurance agents in the Trusted Choice® network can find customized quotes from multiple insurance carriers to make sure you get the coverage you need. And remember, use an apples-to-apples approach when shopping for business insurance. Be sure that the coverage being offered is the same or similar across all of the quotes you evaluate. This is the best way to decide which policy best meets your needs and budget. Contact an independent agent today.