Module · business

Liability insurance and legal structure

50 min Lesson biz-02
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What you'll learn

You will get sued someday if you train people long enough

Even when you do everything right, a client can claim injury. Insurance protects you. Legal structure protects your personal assets. This isn't optional once you're charging money.

Professional liability insurance

Coverage for claims arising from your training services. Pays legal defense, judgments, and settlements.

Coverage levels: typically $1M-$2M per occurrence, $2M-$5M aggregate. More if working with high-net-worth clients or in litigious states. Cost: $150-$400/year through specialized providers — Idea Health & Fitness Association, NASM, ISSA, K&K Insurance, Sports & Fitness Insurance Corp. What it covers: professional negligence (you missed a contraindication, gave bad advice), bodily injury claims, sometimes equipment damage. What it doesn't cover: practicing outside your scope (giving medical advice), gross negligence, criminal acts, your own injuries.

General liability insurance

Separate from professional liability. Covers slip-and-fall and similar incidents at your training location. Required if you train at your own facility. Often required by gyms hosting independent trainers.

Business structure options

Sole proprietorship — default if you don't form anything else. You and the business are legally identical. Personal assets at risk if sued. LLC (Limited Liability Company) — separates personal from business assets. Most trainers should be an LLC. Cost: $100-$500 setup depending on state, plus annual fee. S-Corp election (after LLC) — can save on self-employment taxes once you're netting $40K+/year. Talk to a CPA. C-Corp — generally not appropriate for trainers; double taxation.

For most independent trainers: LLC + professional liability insurance is the right combination.

The client waiver

Every client signs before training:

Standard sections: Don't use a generic web template. Have an attorney review your specific waiver. State laws vary widely on what's enforceable.

Independent contractor vs employee

If a gym pays you a percentage of session fees, you're usually an independent contractor. This means:

Some gyms misclassify trainers as contractors when they should be employees (per IRS rules). Know the difference for your own protection.

Tax considerations

As a self-employed trainer:

Get a CPA the first year. Their fee usually pays for itself.

TL;DR

LLC + professional liability insurance + carefully drafted waivers. $1M+ liability coverage. Don't operate as a sole proprietor once you're charging money. Don't use generic waivers. Get a CPA. Don't accept misclassification by gyms.

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