Archive for the ‘Recreation Departments’ Category

When Youth Sports Teams Move Up One Year

Is it safe in all age categories?

What liability exposure exists for administrators and coaches who allow a younger sports team to play up in an older age category? That question was asked by a visitor to our website:
“I am struggling with a team playing up a year in age U12 Boys moving to U13 Boys in soccer. What are your thoughts? And do you know of any lawsuits. I am on the board and I want to be able to answer any questions.”
We invited a guest expert to respond to that for us. Gil Fried is an attorney and professor at the University of New Haven who provided the following answer:
“I am not familiar with any lawsuits from a younger group moving up one age category.  If they moved up several years the proportional difference in skill and size could open a door to liability.  Since the potential for in jury exists at all soccer levels, I would suggest that the children in the 12-year-old group and their parents be sent a letter indicating the potential concern that since younger kids are playing against older kids there could be a chance for injuries. The letter should be clear and allow parents to pull their child if they are concerned without any retribution.”

Sexual Abuse/Molestation Insurance for Sports Organizations

The risks organizations face and the preconditions for coverage

Child Abuse in Youth SportsSexual abuse and molestation is, unfortunately, a major topic of conversation within youth sports insurance in the past decade.  The sports insurance carriers that write General Liability have been decimated with a number of large settlements and adverse jury verdicts.

As a result, most carriers are not willing to extend coverage for abuse/molestation unless risk management controls are in place.  In other cases, the coverage is only available by tapping into custom programs for larger governing and sanctioning bodies that have significant negotiating power.

Coverage for abuse/molestation is important because all directors and officers will be sued along with the alleged abuser.  The directors and officers will be sued for failure to screen out staff with criminal backgrounds, failure to respond to an allegation, and failure to implement policies and procedures such as the use of a “buddy system” and prohibition of overnight sleepovers.

As a precondition of coverage, many insurance carriers will require mandatory background checks on all staff with access to youth, as well as the adoption of a risk management awareness program.

We have more detailed information on the various types of background checks and the strengths and weaknesses of each, as well as a free and simplified Abuse/Molestation Protection Program on our risk management page.

Crime Insurance for Sports & Recreation Organizations

Employee/volunteer theft are more prevalent than many realize

Sports and recreation organizations can have significant assets at risk from the traditional employee or volunteer embezzlement and the modern perils of electronic fraud. Most sports organizations are not properly insured for these exposures and don’t have adequate risk management controls in place.

The Commercial Crime policy form (ISO CR 00 20 05 06 and CR 00 21 05 06) offers the following coverage parts that may be individually purchased:

Employee Dishonesty Provides coverage for employee theft of money, securities, or other property such as equipment. Employees are defined as regular employees, temporary workers, leased workers, trustees of employee benefit plans, interns, managers, directors, or trustees.

If applicable, it is critical that sports and recreation organizations request special endorsements to extend coverage to theft from volunteers, non-compensated officers and members of specified committees, specified directors and trustees on committees, partners, LLC members, computer software contractors, agents, brokers, or independent contractors.

It is also important to purchase Employee Dishonesty coverage on a blanket basis that protects against theft from all employees or others in a designated class as opposed to specified employees or others who must be individually named on the policy. Sports and recreation organizations experience a high rate of personnel turnover. It’s not uncommon for an organization to fail to update the list of specified employees.

Forgery and Alternation Provides coverage for forgery or alteration of a check, draft, or promissory note drawn against the insured’s accounts.

Money and Securities Provides coverage for theft, disappearance, or destruction of money and securities from either inside the premises/banking premises or outside the premises. Coverage may also be extended to robbery or safe burglary of other property.

Computer Fraud Provides coverage for financial loss due hacker access effecting a fraudulent transaction. An example of computer fraud occurs when company A sells services to company B. An employee of company B hacks into the computer of company A and changes the bank routing and account numbers. The next time a payment is made foElectronic crimer services, the funds are fraudulently transferred to the employee instead of company A. According to a 2008 survey by Computer Security Institute, the average financial loss due to computer fraud was $289,000.

Electronic Funds Transfer Fraud Provides coverage for financial loss due to a hacker access to a financial institution, accessing an online account, and circumventing normal online authentication controls to affect a fraudulent wire transfer. An example of this type of fraud occurs when a hacker gains bank account and password information by planting a Trojan virus in an email attachment sent to a company bookkeeper. When the attachment is opened, a keyword logger is launched that secretly obtains account and password information. The hacker accesses the online banking system and completes a fraudulent electronic wire transfer. According to a 2008 survey by Computer Security Institute, the average financial loss due to funds transfer fraud was $500,000.

Money Orders and Counterfeiting Provides coverage due to loss by good faith acceptance of money orders that are not honored or counterfeit money.

Traditional Crime Risk Management Controls

Many smaller organizations are not run as serious businesses and as a result don’t have strong risk management controls to protect against employee and volunteer dishonesty. The key to preventing insider dishonesty is separation of duties so that no single person has total control over any one process or audit procedure. Below are recommended controls:

  • Require a countersignature on all checks or on checks over a certain amount.
  • The person who reconciles the bank account should not be authorized to deposit or withdraw funds.
  • If credit cards or debit cards are used, authorized users should not be tasked with reviewing the monthly statements.
  • Keep detailed inventory records of all equipment and require a log to be maintained when equipment is assigned or checked out.
  • Create an audit committee to review all financial records, account statements, and to take an inventory of all equipment.
  • Collect checks instead of cash during fundraisers.

Electronic Crime Risk Management Controls

Pfishing scams, Trojans, key loggers, and similar techniques allow hackers to gain access to online banking transactions and to circumvent standard online authentication controls. Internal controls such as antivirus software, firewalls, and employee training are critical but don’t offer 100 percent protection. Computer Fraud and Electronic Funds Transfer Fraud coverages are strongly recommended.

Get a Quote

Contact Sadler Sports & Recreation Insurance at 800-622-7370 for a Crime Insurance quote. We have an existing Crime Insurance program available for smaller, locally-based organizations for as little as $175, which includes coverage for Employee Dishonesty, Forgery and Alteration, and Theft of Money and Securities. Larger sanctioning and governing bodies will be asked to complete an application that outlines your financial risk management practices and we will be able to provide a proposal within several days in most cases.

Coach Certification Liability Insurance

Several of the coach certification training organizations offer General Liability insurance as a membership benefit to the coaches. This is a great benefit that is designed to act as a safety net in the event that the sports organization neglects to provide its own insurance or if its insurance contains unacceptable exclusions.

Some sports organizations that require all of their coaches to be certified mistakenly interpret this membership benefit as a green light to forgo purchasing their own General Liability insurance. This is a dangerous mistake. Individual coach certification General Liability insurance will not provide protection under the following circumstances:

  •  It won’t cover the sports organization as an entity. As a result, the assets of the entity are unprotected if a lawsuit results in legal defense costs, settlement, or an adverse jury verdict. This can be catastrophic; even small sports organizations can have many thousands of dollars of asset value in their bank accounts, equipment, real estate, etc.
  • It won’t allow for the issuance of a certificate of insurance under the name of the sports organization, which may be a property owner’s requirement for field or facility access.
  • When a youth participant is injured, it is customary for all adult volunteers in close proximity to the injury to be shotgunned into the lawsuit based on negligent supervision. This includes the head coach, assistant coach, manager, umpire, referee, team mother, etc. In addition, the organization’s board members and officers will normally be included based on lack of general supervision. It’s likely that not all these volunteers are certified coaches and therefore won’t be protected.
  • Most coach certification liability policies only cover lawsuits arising out of direct coaching activities. However, many lawsuits in the youth sports context arise out of non-sport activities and outings such as swimming parties, restaurant celebrations, backyard cookouts, banquets, fundraisers, etc.

The bottom line is that all sports organizations need their own General Liability policy. If you have questions, or want assistance in determining your insurance needs, please call us at (800) 622-7370.


Copyright 2002-2014, Sadler & Company, Inc.


Insurance Policies Needed by Sports Organizations

The minimum needed for maximum benefit

Because many sports organizations are run by volunteers, they are often under-insured. Insufficient insurance coverage may be a by-product of money-saving efforts or simply a matter of not understanding the risks of exposure to the athletes, coaches, staff and volunteers, and board members

Below is a list of the most important insurance policies that may be needed by community-based sports organizations such as teams, leagues, and municipal recreation departments.
  1. Accident: Pays medical bills on behalf of injured participants such as players and staff.
  2.  General Liability: responds to lawsuits arising from bodily injury, property damage, personal/advertising injury.
  3. Directors & Officers Liability (AKA Trustees Errors & Omissions for municipal recreation departments): Responds to certain lawsuitSports orginizationss not covered by General Liability such as discrimination, wrongful suspension or termination, failure to follow your own rules or bylaws, and violation of rights of others under state, federal, or constitutional law.
  4. Property/Equipment: Covers your buildings, equipment, and contents against loss due to fire, vandalism, theft, etc.
  5. Crime: Covers employee or volunteer embezzlement of funds or theft of property; forgery or alteration of checks by outsiders, and theft of money and securities by outsiders.
  6. Workers’ Compensation: May be required by state law if three or more employees and pays benefits to injured workers for “on the job” injuries including medical bills, lost wages, disability lump sums, disfigurement lump sums, and death benefits.
  7. Business Auto: Covers liability and physical damage to owned, non owned, and hired autos.
  8. Consult with your insurance agent about other types of policies such as Liquor Liability, Cyber Liability, Media, etc.

We provide more detailed information on each of these policy types and insider tips on purchasing insurance in our article, 7 Critical Mistakes to Avoid When Buying Sports Insurance. If you have questions or want assistance in deciding which policies your organization needs, call us at (800) 622-7370.

Copyright 2002-20014, Sadler & Company, Inc.

The Gamble of Being Underinsured

The risks can be catastrophic

Gambling diceBeing underinsured is just as big a mistake as being uninsured. It’s no secret that insurance is one of those necessary purchases that buyers resent. But it’s also no secret that purchasing the correct coverage has protected countless people and organizations from potentially catastrophic financial circumstances.

Sports organizations are often run by volunteers who aren’t aware of the potential risks to which their league and players are exposed. This often results in lack of coverage – for all the wrong reasons. Thinking ahead is your insurance agent’s job. He or she has seen it all and knows anything can happen to anyone at any time.

What’s behind the lack of insurance?

Many sports administrators mistakenly believe that they don’t need to buy Accident and General Liability insurance to cover their sports programs for various reasons. After more than 25 years in the sports insurance industry, I’ve heard every excuse in the world for such decisions. Here are the top four:

  •  “Our waiver/release forms will prevent lawsuits.” The use of a well-drafted waiver/release form is a great tool under some circumstances. However, it won’t prevent a lawsuit from being filed. Even if the waiver/release does result in the lawsuit eventually being dismissed, it may still cost $10,000 to $20,000 in legal defense fees to get to that point.
  •  “Volunteer immunity statutes will prevent lawsuits.” State and federal volunteer immunity statutes are a positive step in the right direction. However, they typically have too many loopholes and exceptions that limit their effectiveness. For example, most immunity statutes exempt protection in the event of grossly negligent behavior, willful or wanton conduct, or the reckless disregard for the safety of others. Most lawsuits make these allegations and the judge has to sort out if they have any merit. All this takes time, and the more time it takes to sort this out, the greater the legal fees. In addition, these statutes don’t protect paid staff and the sports organization as an entity itself.
  •  “Our employees/volunteers/administrators provide their own liability policies.” Many sports organizations will leave it up to the individual volunteers or administrators to protect themselves through Homeowner’s Liability, Personal Umbrella, or Coach Certification Liability policies. This can be a dangerous strategy for many reasons. Homeowner’s Liability and Personal Umbrella policies may include an exclusion for lawsuits arising out of activities of the insured person as a sports volunteer. Furthermore, they won’t protect against the non-bodily injury or non-property damage lawsuits that a Directors & Officers policy may protect against such as discrimination, wrongful termination, failure to follow own rules or bylaws, etc.

The insurance policies sports organizations need

Below is a list of the most important insurance policies that most community-based sports organizations such as teams, leagues, and municipal recreation departments should carry.

  • Accident insurance pays medical bills on behalf of injured participants.
  • General Liability responds to lawsuits arising from bodily injury, property damage, and personal/advertising injury.
  • Directors & Officers Liability (or Trustees Errors & Omissions for municipal recreation departments) responds to certain lawsuits not covered by General Liability, such as discrimination, wrongful suspension or termination, failure to follow your own rules/bylaws, and violation of rights of others under state, federal, or constitutional law.
  • Property/Equipment insurance covers buildings, contents and equipment against loss due to fire, vandalism, theft, etc.
  • Crime insurance covers employee or volunteer embezzlement of funds or theft of property; forgery or alteration of checks by outsiders, and theft of money and securities by outsiders.
  • Workers’ Compensation may be required by state law for organizations with three or more employees. It pays benefits to injured workers for on-the-job injuries including medical bills, lost wages, disability lump sums, disfigurement lump sums, and death benefits.
  • Business Auto insurance covers liability and physical damage to owned, non-owned, and hired autos.

There are other types of policies that some organizations may require. For much more detailed information on this topic, please see 7 Critical Mistakes to Avoid When Buying Sports Insurance.

For assistance in determining which policies your organization needs, to have your questions answered, or to receive a quote, please call us at (800) 622-7370.


Is Your Team/League Adequately Insured?

Find out with our minimum requirement checklist

How do you know for sure that your team/league sports insurance policies provide the coverage you need to protect against devastating lawsuits? Many local insurance agents and even so called sports insurance specialists are guilty of offering inadequate coverages.

ChecklistMinimum standards for sports insurance have been set by a sports insurance expert, risk manager, and attorney John Sadler of Sadler Sports and Recreation Insurance. These standards are outlined in two separate checklists, one for private teams/leagues that purchase their own insurance one for teams/leagues with insurance provided by a municipal recreation department. Feel free to use our Sports Organization Insurance Checklist and Municipal Recreation Department Insurance Checklist.

Sports administrators no longer need to frustrate themselves trying to determine what coverage and limits are necessary. They can simply submit the checklist to their insurance agent for completion. The insurance agent then checks off whether each standard has been met and signs his or her name.

Once the completed checklist has been received, administrators then can decide what to do based on the results. If your team/league hasn’t met the the mandatory standards, your insurance agent should  remedy the problem or you should find a new insurance agent who can offer policies that meet the minimum standards.

Visit our team and league insurance page for more information on coverage or to get a quote. Or call us at (800) 622-7370!


Copyright 2014, Sadler & Company, Inc. All rights reserved.


AEDs and Liability in Public Schools

Will sympathy impact legislation?   

Too many communities have grieved debilitating injuries or premature deaths of high school athletes due to cardiac events. Many schools maintain automatic external defibrillators (AEDs) in an effort to prevent such tragedies.

 Outdoor AEDThere are no federal mandates regarding AEDs in public schools. Colorado, Florida, Georgia, Illinois, Iowa , Maryland, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Virginia and Wisconsin have passed legislation requiring some schools to maintain portable defibrillators.  California and Tennessee encourages placement in public schools.

 But a debate has started over whether public schools can be held liable if the AEDs are not used. This stems from a lawsuit that will go before the Florida Supreme Court sometime this year.

 What set the ball in motion

When an East County High School soccer player collapsed on the field, school personnel called 911 and performed CPR while waiting for emergency responders. The AED on campus was not utilized. Although paramedics were able to revive the student with a defibrillator and medication, he suffered severe brain damage and is in a vegetative state.

 The lawsuit argues that that the school district is liable. Lower courts found in favor of the school district, acknowledging that the school is legally obligated to try to help any student who becomes injured or ill on school grounds but not to authorize or direct specific treatment such as the use of an AED.

 Florida ruling could have huge impact

If the Florida Supreme Court overturns the lower court ruling, there is potential for every youth sports facility or program to be affected. This includes both public and private facilities and programs, such as those run by school districts, local and state governments, parks and universities. If this occurs, the next question will be whether AED training will be required of paid and volunteer coaches, referees, and organizers or risk being sued in the event of an episode such as the one in the current suit. And will these organizations be required to purchase other medical devices and provide training to avoid liability? And, of course, this could affect the cost of Liability Insurance, as typically is the case when claims are made.

 Source: Mark Miller and Deborah J. LaFetra, “Fla. Lawsuit Set to Define Schools’ Legal Duty to Use AEDs,” Tampa Tribune.  16 Apri 2014


Crossing the Foul Line

HIV-positive player kicked out of rec basketball league

A 21-year-old player on a Kissammee Parks and Recreations basketball team was told he could not participate in the league. A part-time recreation leader confronted Dakota Basinger mid-game, asking if he was HIV-positive. When Basinger replied that he is, the employee then told him he was not permitted to continue the game or play in the league.

A spokesperson for the city’s Parks and recreation department stated that the worker had specifically been told not to approach Basinger and did so without supervisor approval.

Should players with HIV / AIDS be allowed to participate in youth sports leagues? Find out in our article  Read our article HIV in Youth Sports.
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Sport injuries off the field

The Independent Contractor or Subcontractor Limitation

Services such as concessions umpires, security, field maintenance and janitorial are typically outsourced by sport and recreation organizations as independent contractors or subcontractors.

The Independent Contractor or Subcontractor Limitation endorsement on a General Liability policy can have adverse consequences for sports and recreation organizations.

Don’t play around with independent contractors

The negligent actions of these independent contractors or subcontractors can result in the sports organization being shot gunned into a lawsuit.

The Independent Contractor or Subcontractor Limitation endorsement will preclude coverage unless the independent contractor or subcontractor maintains a General Liability policy at the time of injury, with limits equal to the sports organization while naming such sports organization as “Additional Insured.”

Protecting the organization

It is highly recommended that sports organizations require all independent contractors and subcontractors to provide evidence of General Liability insurance with limits of at least $1,000,000 combined single limits. Such policies should name the sports organization as “additional insured.”

However, General Liability coverage of the sports organization being contingent on the insurance requirement of the independent contractor or subcontractor is a risky proposition.  If the sports organization is diligent about administrative duties, an uninsured independent contractor or subcontractor could easily slip between the cracks.  In addition, a certificate of insurance is only an indication of coverage status as of the date of its issuance. Coverage could later be canceled due to nonpayment of premium with no absolute notification requirement to certificate holders.

For the reasons outlined above, it is not acceptable to allow the existence of the Independent Contractor and Subcontractor Limitation endorsement on the General Liability policy for a sports organization.

Source:  John Sadler