Ch. 17 Legal Guidelines and Professional Responsibilities

Question 1

What are the advantages and disadvantages of various business structures?

Answer 1

SOLE PROPRIETORSHIP:
Advantage: easily created and managed, flow through taxation
Disadvantage: personal liability, raising capital

PARTNERSHIP:
Advantage: easily created, flow through taxation
Disadvantage: potential management disputes, personal liability (except limited partners)

S-CORPS:
Advantage: flow through taxation, limited liability
Disadvantage: limited number of potential investors, costs of formation and operation

LLC / LLP:
Advantage: flow through taxation, limited liability
Disadvantage: undefined operating standards in states

C-CORPS:
Advantage: limited liability, unlimited number of investors
Disadvantage: cost of formation and operation, double taxation

Question 2

How is an employee different from an independent contractor?

Answer 2

An employee is expected to have ongoing business (like us as trainers at f-45)

An independent contractor does a job and once the duties are complete, they are done with that particular job (like a plumber)

Question 3

What are typical guidelines for a personal trainer acting as an independent contractor?

Answer 3

You should be able to:
Choose when and where to work
Charge variable fees for different situations
Begin working without extensive guidance
Maintain autonomy in training decisions

Question 4

The plaintiff would have to establish these four things to charge you with negligence as a trainer….

Answer 4

1. The defendant had a duty to protect the plaintiff from injury
2. The defendant failed to uphold the standard of care
3. Damage to the plaintiff occurred
4. This damage that occurred to the plaintiff was due to the defendant’s breach of duty

Question 5

What is vicarious liability?

Answer 5

This basically says that if you hire anyone underneath you, you are also responsible for their actions if they are negligent.

Question 6

Waivers are _______ in personal training.

Answer 6

Vital!

The trainer should consult an attorney before crafting the waiver as each state has slightly different rules regarding the validity of waivers.

Question 7

What do informed consent forms, waivers, and agreements to participate all have in common?

Answer 7

All of these forms can be used to inform the client of the potential dangers of the activities to be performed and can help protect the personal trainer in the event that the client wishes to sue.

Question 8

Personal trainers need to purchase __________________ insurance that is specifically designed to cover the health and fitness industry. The policy should cover personal injuries that can occur as a result of a training session

Answer 8

Professional liability

Question 9

How do personal trainers trainers utilize the risk management table?

Answer 9

There are four approaches to managing risks:

1. Avoidance (eliminate activity)
2. Transfer (transfers risk to others through waivers and insurance)
3. Reduction (remove part of the activity)
4. Retention (continuing the activity and retaining the possibility of the risk)

The recommended approach for extreme risks is to avoid the activity completely. Risks that fall into one of the high categories can be managed through insurance or reduction. Reduction is also the preferred method for addressing risks in the medium category while risks in the low impact category can be retained.