| News & Know How | First Person CBI Spends 10 Minutes on the Line with
Bob O’Leary H
Robert D. O’Leary is the executive vice president of marketing for the Philadelphia Insurance Companies’ Eastern Division, which encom- passes five regions, Northeast, Metro, Mid-Atlantic, Southeast, and Florida. He holds a bachelor’s degree in economics from Trinity College, in Hartford, Connecticut, and earned his Chartered Property Casualty Underwriter designation in 1987.
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For more information about the special insurance program the Philadelphia Insurance Companies has created for IHRSA, log on to
www.ihrsa.org/phly.
From an insurer’s viewpoint, quality of market share, or risk pool, is paramount, which is why we’re so excited about partnering with IHRSA clubs. From the club perspective, the top priority is a combination of price and coverage. If you only care about cost, you can run into trouble. But when you suffer a loss and realize you don’t have the coverage you thought you had, you quickly become a more discriminating customer.
Claims is where the rubber meets the road. Getting a claim paid, at a fair price and in a timely manner, is critical. Sophisticated buyers also understand that paying off frivolous claims inevitably leads to higher premiums, or worse. What happens, for instance, to your club’s rep- utation in the community if an insurer pays off an unjustified claim of sexual harassment or sexual abuse? Employment Practices Liability Insurance (EPLI) covers these types of claims, and our PHLY Bell endorsement even reim- burses you for hiring a PR firm to mitigate the possible damage to your reputation.
You don’t have to be Sherlock Holmes to realize it’s risky to hire noncertified trainers. You can expect a claim to be filed if you have tanning beds that are old, poorly maintained, or have inaccurately calibrated controls… and it’s going to be a bad claim. If you can’t pass off that liability to another party, it could put you out of business. Childcare services pose an enor- mous abuse and molestation exposure. But the claim we see most frequently results from poorly maintained equipment.
The happy medium between price-is-no-object blanket coverage and bare bones catastrophic coverage often means selecting higher deduct- ibles on coverage for equipment and fire in order to carry higher limits on liability for bodily injury,
ow does the perspective of risk differ between insurer and insured? How should a health club go about assess- ing its insurance needs? What aspects of running a club
pose the greatest risks? How can a club manage its risks? What’s your sense of the industry’s future?
or coverage for claims alleging wrongful termi- nation, sexual harassment, or identity theft.
A relatively new coverage, cyber liability insur- ance is, today, where EPLI was 20 years ago. When I’m giving a presentation, I’ll often ask for a show of hands for those who’ve experi- enced some kind of identity theft, and I find at least 20% of the audience will raise their hands. Right now, I don’t sense an urgency in the club industry about coverage for identity theft, but imagine the risk you’d face if you were to lose personal information on 1,000 members of your club. Today, just 2%-3% of businesses carry cyber liability insurance, but we expect to be writing a lot more of this type coverage in the next few years.
Lower risk equals lower premiums, which is why we created the Peril Assessment Scoring System (PASS program). We award “Bells” for how well clubs are run, based on risk-management criteria that we’ve developed. Five Bells earns your club Best-in-Class status. It’s feasible for a club that earns one Bell to improve its score to four Bells within a year by addressing those issues where it’s been deficient. That will lead, in time, to lower, more stable premiums.
Looking ahead, I see a very bright picture for the health club industry. The obesity problem, for example, is not going to be solved overnight. In 1991, no state in the country had an obesity rate higher than 20%. This year, only one state, Colorado, has an obesity rate under 20%. Higher productivity and less absenteeism make compa- nies more profitable, so it’s reasonable to assume employers will encourage their employ- ees to make more and more use of clubs.
” —| – John Halbrooks,
j.halbrooks@verizon.net www.
ihrsa.org | OCTOBER 2010 | Club Business Internat ional 25
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