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Risk in Sportstech

With the surge in e-health, digital fitness, wearables, augmented reality and aggregated booking platforms, sports and leisure businesses are facing a new set of risks related to the technology behind their business model.

The pandemic has caused many existing sport and leisure businesses to radically adapt their business models – as well as spawning a plethora of new players in digital health and fitness, or “sportstech” (see the Global Sportstech Network).

But inherent in all innovation is risk.

Sportstech businesses need expert support in identifying and understanding the real risks they face, so that they can manage and mitigate these risks, and seek scalable insurance programmes to address their exposures, from cyber risk to medical malpractice issues.

From late March to early April 2020, global installs of health and fitness apps jumped by 67%. The Daily Active Users (DAUs) on fitness apps increased by 24% from quarter 1 to quarter 2 of 2020, according to an article published in the WEF in September 2020. Also in 2020, consumer spending on digital fitness rose by 30%-35% with Strava alone averaging two million downloads a month.

The physical distancing engendered by the pandemic has meant more online fitness classes, home fitness technology (Peleton), subscription programmes (Apple’s Fitness+), and digital booking platforms.  Augmented and virtual reality have come into play, along with AI and machine learning.

Fitness has moved to a central position in both physical and mental health, and apps now embrace diagnostic, prescriptive and even treatment elements which expose their creators to liabilities far beyond slips, trips and falls of “analogue” fitness facilities.

What risks does a sportstech business face?

Sportstech businesses present a unique set of risks and insurance challenges.

Sport risk + Tech risk (+ medical risk) = Sportstech risk

  • Cyber risk: from theft of funds in phishing attacks to data breaches, network downtime and hack attacks
  • Public and products liability: for injury caused by your product, or giving the wrong advice or treatment
  • Business interruption: financial protection when you can’t operate as normal due to physical damage
  • Cyber business interruption: protection when you can’t operate as normal due to system downtime
  • R&D risk: what if your beautiful lines of code are corrupted by a virus?
  • Intellectual property (IP) risk: being sued for breach of IP can mean crippling legal costs
  • Wellness risk: if your app makes an incorrect diagnosis, could you be sued for medical malpractice?
  • Product trials: some products may require full clinical trials
  • Media liability: for licensing deals and celebrity sponsorship
  • Shareholder risk: what if something happens to a shareholder, or a key decision maker falls critically ill? Could it impact your income?

As an innovative business in a rapidly evolving sector with global opportunities, it’s important to seek specialist advice on the specific risks you face.  This will also serve to make you more attractive to investors; a sound risk management and insurance programme inspires confidence.

Partners& is a multi-specialist insurance broker challenging the status quo with its advice-led approach. A strategic partner with ukactive and Independent Gyms, Partners& has expert risk advice and insurance teams in both Sports & Leisure and in Science & Technology, and is well positioned to advise innovative sportstech businesses from start-up to IPO.  We’re proud to work with over 800 gyms and health clubs nationwide, as well as a range of tech businesses across software and hardware, supporting them with advice and financial protection.

The Partners& difference: a holistic approach to risk

Managing operational risk is just the starting point. Our holistic, advisory approach takes a wide-angle view of your business and personal risk. We can help with your cyber risk, the “people risk” in your business – through our wellbeing, engagement and benefits programmes – and provide financial protection (your “company will”) and personal insurance for business owners, shareholders and their families.

We believe the right advice makes a genuine difference to insurance outcomes; and choosing to manage claims in-house creates a closed loop of accountability, transparency and added value at every stage.

Contact us now to access support and advice to protect your sportstech business:


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