In many ways, 2020 was a year to forget for the climbing gym industry. Gyms in North America oscillated between closed and open due to the pandemic, and reopened gyms are still reckoning with capacity restrictions and reduced consumer confidence. By year’s end, more than 20 gyms in the U.S. and Canada had permanently closed their doors, according to CBJ’s Gyms & Trends 2020 report. And 68 percent of gyms responding to the CWA’s December survey expected it would take one year or more for their membership and revenue to recover.
But it’s important to not forget 2020 entirely. The pandemic has reinforced lessons worth remembering, including the importance of pulling together as an industry. In California and Washington, climbing gym owners formed coalitions to show policy makers how safe climbing gyms can be. Climbing gym members, for their part, continued supporting their local gyms by continuing their memberships throughout this period. In the same CWA survey previously mentioned, 75 percent of responding gyms had retained at least 50 percent of their total membership at year’s end.
Industry partnerships have been essential to the survival of climbing gyms as well. And the partnership between the Climbing Wall Association and its insurance partner Monument Sports Group stands chief among them. As a customer advocate for the industry’s trade association, Monument has been going to bat for climbing gym businesses to provide relief in the important area of insurance.
Helping Gyms Survive and Thrive
The partnership between the CWA and Monument has benefitted member gyms since its formation in 2013. In the vast world of insurance, climbing facilities are relatively exotic beasts, and their risks are often misunderstood by underwriters. By combining purchasing power into a group of members and working with an experienced customer advocate like Monument, CWA members participating in the insurance program enjoy fairer rates from insurance carriers which more accurately reflect their actual risks―maintaining stability in this small corner of the insurance market.
But all fixed costs like insurance, however affordable, became tough to stomach when the pandemic hit and gyms were forced to temporarily close. Anticipating industry wide drops in revenues, Monument immediately got to work negotiating premium deferrals and reductions, something Monument President Mark Grossman says is uncommon for insurance carriers to do mid-contract. Payments were deferred 60 days at the outset for most CWA members, and Everest Insurance―the General Liability Program Carrier―immediately committed to re-evaluating the premiums being charged in light of anticipated revenue declines and unknown lengths of closures.
A key aspect of the program response was to remain flexible as both the severity of the pandemic and localized responses changed as the year progressed. Throughout the year, Monument worked with the Carrier to provide credits, endorse policies (including multiple times for those in areas that had much longer closures), amend coverage, and provide adjustments on policies renewing during the pandemic to reduce costs. According to Grossman, not all carriers outside the program made these adjustments.
“We have a really good partner in Everest Insurance,” says Grossman. “They understand the challenges the pandemic has caused the climbing gym community and we have been working closely together to find solutions.”
Walking with Gyms Every Step of the Way
Even as gyms have reopened, in many regions that loss of climbing exposure has persisted due to capacity restrictions. In working with national partners like Everest, Monument has been able to secure premium reductions and coverage adjustments nationwide, for gyms of all shapes and sizes. Within the tiered reopening system in California, for instance, until recently climbing gyms have been mostly closed since the pandemic began. As one aspect of these gyms’ fixed costs, all reductions and deferrals of insurance premiums have helped.
“Both were huge lifts for us, enabling us to retain some more employees or buy more PPE,” says Wesley Shih, Co-Founder and CSO of the Sender One gyms in hard-hit Los Angeles. “Plus, when something like that comes as a windfall, it lifts your team morale as well.”
On top of the unexpected financial support, Monument kept in close communication every step of the way, according to Shih. When Sender One pivoted its business model during the closures to day camps―which were allowed to operate with strict safety protocols in place―Monument helped explain the concept to the Carrier so that Shih could make the business decision with confidence. And when insurance for Sender One’s bouldering gym project in Playa Vista had already been set-up before the plan to begin construction was paused, Monument contacted Everest unsolicited to help obtain a refund on Sender One’s behalf.
“What Monument did just showed me that they’re as much a part of our community supporting us as the members who are physically here,” concluded Shih. “Sender One wants to work with people and organizations that embody the same core values that we have. And I think what Monument did reflects a lot of those values.”
While every gym’s situation is different, Monument hasn’t waited around for benefits to fall into place. As the customer advocate for the CWA insurance program, Monument has been proactively reaching out to its clients for information which would help qualify them for these opportunities―and even reached out to carriers outside of the CWA program. It’s been paying off. At year’s end, 37 percent of gyms responding to the CWA December survey had seen their fixed cost expenses reduced by 20 percent or more.
Grossman attributes much of this progress to the hard work of the Climbing Wall Association and its Interim Executive Director, Garnet Moore. Taking the helm of the industry’s trade association in the middle of the pandemic, Moore played a critical role as the CWA provided gyms with free CWA membership, a roadmap to reopening and additional resources―including communicating insurance program changes in the CWA newsletter, website articles and community calls. And most recently, the CWA launched a collective marketing campaign to bolster support for struggling gyms.
“Garnet just rolled up his sleeves and went to work for everyone,” says Grossman. “He and the CWA have just been a fantastic partner for us in getting the message across, whether it was in Zoom calls or email blasts, anything related to helping the gyms out.”
Advocating for Gyms Behind the Scenes
As with many important business decisions like those made around insurance, price isn’t the only factor. Most climbing gyms in the United States are now operating again at some capacity, and 44 new gyms opened their doors last year. Fortunately, participants in the CWA insurance program can choose from a wide selection of high-quality programs, from Worker’s Compensation to Property insurance programs, which Moore encourages gyms to continue as much as they’re able.
“Having a program like this can give people peace of mind that instead of having to go out there and evaluate different proposals from different insurance carriers themselves, they can trust this program has been vetted by the CWA and really works well for a lot of gyms―and we’re constantly trying to make it better,” says Moore.
In addition to keeping atop of market trends and opportunities, efforts to make it better have included advocating for gyms behind the scenes too. Forming the backdrop of the COVID-19 insurance landscape is the Sars outbreak in 2007. According to Grossman, insurance carriers placed virus exclusions on Commercial Property policies after the epidemic (or determined their policies would not respond to Business Interruption claims due to or related to “virus”). Those exclusions and policy forms are being tested as hundreds of lawsuits were filed and continue to work their way through the courts. As a result, most businesses like climbing gyms have not been able to capitalize on Business Interruption insurance.
Alongside other advocacy work like petitioning for climbing gyms to be included in emergency stimulus funding and providing position papers showing safety standards across gyms, the CWA also backs the Pandemic Risk Insurance Act. While still being legislated, this legislation would function similarly to the Terrorist Risk Insurance Act which followed 9/11. Essentially insurance for insurance carriers backed by the government, if passed then insurance carriers would be more likely to write policies which would include assistance for businesses during times like these. It’s all part of the crazy spider web of insurance that the CWA and Monument manage behind the scenes for gyms.
“What Monument can do, since they have so much experience in our industry and similar industries, is that they can even look ahead at what the needs are that a new gym owner might not know,” says Moore. “They are a true customer advocate for the climbing gym industry.”
To help Monument help you with your insurance needs, contact The Monument Sports Group at firstname.lastname@example.org or by calling 866-674-1234.
Climbing Business Journal is an independent news outlet dedicated to covering the indoor climbing industry. Here you will find the latest coverage of climbing industry news, gym developments, industry best practices, risk management, climbing competitions, youth coaching and routesetting. Have an article idea? CBJ loves to hear from readers like you!