Archive for the ‘Sanctioning/Governing Associations’ Category

6 Tech Tips for Sports Organizations

Keeping you technologically safe and running smoothly

Almost every youth sports organization has a paid employee or volunteer who is responsible for managing the organization’s website, accounting system, databases, registration system, game and tournament schedules, employee and volunteer work schedules and maybe even social media accounts.

Incoming and current technical managers can benefit from the tips below on efficiency and security offered below.

  • Take stock of the technology you have. The first step in maintaining safe and functional technology is knowing exactly what you have.  Set up a spreadsheet of all your software and hardware systems. Record the product names and versions, where each was purchased and contract end dates. You’ll have all the information you need in one place – preferably where others in the organization can access it if necessary.


  • Talk to your predecessor.  If you’re the incoming tech manager, make sure to have a conversation with the outgoing manager and pick his/her brains about any past or present problems, potential upgrades, and any glitches in the operation. It’s critical that you obtain all the login information for your systems, programs and websites. It’s just as important to know who else has access to this information and to change passwords that former administrators, staff or volunteers may have.  This includes revoking administrator privileges to the outgoing director.


  • Where is everything?It’s important to learn where all the organization’s data is stored – both electronic and paper. If possible, scan paper files into PDF format for online storage. The organization’s data should not be stored on anyone’s personal computer. If multiple users need access, consider using Google Drive, Microsoft OneDrive, DropBox or another cloud service. They’re more secure, accessible from anywhere, and free!


  • You are your website. Maybe your responsibilities include maintaining the association’s website and managing its social media accounts.Your website is the face of your organization. Review it with a keen eye and see what needs updated and delete anything not related to the current or next year. Make sure it’s mobile responsive, which means the layout and images can be viewed correctly on a tablet or smart phone.  Make sure your site is secure, with at least 256-bit encryption.

    Think twice about letting a player’s parent offer to build and host a website and link it to your social media as an act of goodwill or a money-saving effort. All too frequently these helpful people become less eager or simply disappear as they change jobs, their kids age out of the program, move, or simply become too busy. Depending on such a person to get your website up and continuing to run smoothly can be disastrous. Better to rely on a company that provides technical and customer service when you need it.


  • Get feedback.  Who, other than parents, coaches and board members, would know what’s working and what isn’t? No one! Take the time to ask them if they’re experiencing problems registering players, making payments, etc. Ask if they have suggestions for improvement. Consider emailing a survey asking for feedback. You may not be able to implement all the suggestions, but being a good listener, taking their complaints seriously, and attending to issues quickly calms frustrations and  builds trust.

    As the tech director, you’ll be one of the most sought after people in your association. Therefore, document everything you do in a spreadsheet, from dates of technical repairs to conversations with vendors. You’ll be glad you did when someone raises questions and you have the answers at your fingertips.


  • Liability Concerns from websites and social media.  And finally, you must protect yourself from your liabilities arising from breach of confidential information due to a hacker attack, invasion of privacy, and a libelous posts on your website or social media. These risks are not adequately covered by most General Liability policies due to various exclusions. Many Directors & Officers Liability policies are now offering coverage extensions with sub limits of coverage to address these risks. Or, a stand-alone Cyber Risk policy may be purchased for associations with heavy exposure. Contact Sadler Sports & Recreation insurance for more information on these policies.

Source:  Paul Langhorst. “8 Tips for the New Sports Association Technology Director.” 29 Oct., 2015.

2016 Insurance Program Released For American Youth Football

AYFThe gold standard that is the envy of the competition

The American Youth Football and American Youth Cheer endorsed insurance provider, Sadler Sports Insurance, has released the new 2016 insurance program for teams /associations /conferences.

Detailed 2016 coverage, rate information, and online enrollment are available now on our website!

Get Quote Now

The 2016 offering is, once again, the gold standard in youth football and cheer insurance with an unbeatable combination of low rates, broad custom coverages, and best-in-industry automation that allows instant online enrollment and issuance of proof of coverage documents and certificates for field owners. But that’s not all: the program also provides best-in-industry risk management resources to prevent injuries before they become claims and groundbreaking studies on safety in youth football and cheer.

Apply, pay, and print proof of coverage documents and certificates in as little as 10 minutes

Our advanced automation is so simple and fast that you can complete the entire insurance purchase transaction and print all your documents in as little as 10 minutes. Many competitors require the completion of forms and days of waiting just to get a quote. Then, once the quote is bound, it can take several days to get the proof of coverage documents and certificates for field owners. Or, they could charge $100 extra for next day rush delivery.

After the purchase, we provide our clients access to our website so that they can self-issue certificates for new field owners 24/7. It’s so easy and our clients love this benefit.

Beware of competing programs that seem too good to be true

We often hear stories about a competitor offering cut-rate policies with a per team rate that is too low to be believable. Whenever this happens, something ends up being defective with the offering, which illustrates that if something is too good to be true, it usually is. We’ve seen cases where the quoted price did not include the cost of both the Accident and General Liability policies, where the organization never reported the transaction to the insurance carrier and no insurance was in force, and where a big corporation was going to foot the bill for the insurance (dream on), etc. Just this year we found a competitor that was bragging about their great insurance program but had grossly misrepresented its limits and coverages to the public. We brought this to the attention of their insurance carrier and corrections were made. After a little bit of digging, these schemes fall apart.

What is being done to combat the risk of concussion/brain injury and related litigation?

Sadler Sports Insurance provides a sample Football/Cheer Concussion Awareness Risk Management Program (short form) that is strongly recommended for all teams/associations/conferences. This free program can be found under the risk management section of our AYF Insurance page. This program consolidates accepted risk management practices into a three-page document for easy board adoption and implementation. We recommend coaches complete the AYF coaching education program. Certification is required of head football and cheer coaches participating in AYF national championships. We also encourage coaches, volunteers and players view our Seahawks’ tackle resources page. which demonstrates their tackling methods. AYF has provided a certification test to take in conjunction with this video on It is important for all teams/association/conferences to thicken their shields by adopting and fully implementing a comprehensive concussion/brain injury risk management program. The future of our sports depends on this action and it’s the right thing to do to protect the kids.

Check Out Our New, Improved AYF Webpage And Video And Our 98% Staff Awesome Rating

Our AYF/AYC webpage has been totally redesigned for an enhanced user experience where our prospect and clients can access all of our services (ex: applying, renewing, issuing certificates, add/delete teams, claims, etc.) without ever having to speak to a staff member at Sadler. However, should you have a question or need assistance, you can contact our staff by email, chat, or phone. We are very proud that surveys indicate that our staff is graded as 98% “Awesome” by those who have contacted us.

Also, all the football and cheer specific risk management content and related blogs are now available directly from the webpage.

In addition, we created a new video that can be viewed individually or by a small group to explain how to access our insurance and risk management services.

Best-in-industry risk management resources (free)

We have an incredible line up of free risk management resources including articles, legal forms, risk management program templates for your easy adoption and customization, and training videos for administrators and staff. This includes the newly created document entitled Sample AYF/AYC Advanced Plan, which is a comprehensive risk management program customized for AYF/AYC organizations.

Be a part of groundbreaking injury studies

If you purchase your insurance through the endorsed insurance program, all Accident claims automatically become part of the database where our custom software analyzes the information to produce meaningful injury reports. This has led to groundbreaking studies on the comparison of injuries in age only vs age/weight categories and the incidence of concussions within AYF/AYC.

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Please visit our webpage at or call us at 800-622-7370 if you have any questions.


Boundary Dispute Fells Little League Champs

When adults cheat, it’s the kids who pay

Fraud and cheating occur too frequently in government, business, education, mediaand, sadly, even youth sports organizations.

Little League stripped the Jackie Robinson West team of its U.S. championship and suspended its coach for violating the league’s team boundary rule. In what can only be called a team-building effort, team officials altered a league map that determines the areas from which players can be recruited.

In addition to the team being relieved of its international tournament wins, the team manager was suspended the administrator of Illinois District 4 was removed. But it was the players, who were unaware of the team’s manipulation, who paid the highest price. Mountain Ridge Little League was awarded the championship.

It was an agonizing decision but critical in upholding the integrity of Little League, according to Stephen Keener, Little League International president and CEO.

Over the past 10 years, a number of Sadler Sports Insurance sports league clients were sued over boundary disputes involving the eligibility of a particular player (usually a superstar). Disqualification of an ineligible player by a sanctioning body prior to a tournament can result in a legal challenge for injunctive relief asking to halt the tournament until the judge can rule on eligibility. Due to the legal expenses and inconvenience involved, it is recommended that sanctioning bodies have tight boundary rules that are not subject to alternate interpretations. And, of course, they must always follow their own rules when making a decision.

Source: Tom Farrey, “Little League punishes Chicago team,” 11 Feb. 2015.

Sports Organization Management Concerns

Sanctioning/governing associations are responsible for wide range of insurance decisions

The directors and officers of sports and recreation organizations are entrusted with making important decisions about the selection of insurance brokers, insurance carriers, policies to be carried, the quality of coverages within each policy, and risk management services that are needed. In larger sports organizations, these decisions are not just made on behalf of the sports organization as an entity and its respective directors, officers, employees, and volunteers, but also on behalf of the individual members, teams, or clubs.

Organization decision makers should take into consideration each of the following concerns when researching a Property & Casualty insurance program:

  • Managerial Negligence: What could be more embarrassing than to learn a large lawsuit or property loss is not covered by the insurance program due to a lack of due diligence. The resulting financial hardship or bankruptcy will result in finger pointing. Failure to carry adequate insurance can result in litigation against directors and officers for managerial negligence.
  • Personal Liability: Whenever the sports organization as an entity is sued, directors and officers are often shotgunned into the lawsuit as individual defendants. To avoid personal liability, it’s important that the various liability policies adequately cover the individual directors and officers.
  • Membership Benefits: A strong member insurance program can aid in the recruitment and retention of members. This can be achieved by providing organization members an excellent insurance program that offers more competitive prices and broader coverages compared to what they could purchase individually.
  • Overpaying: To ensure the organization isn’t overpaying for its insurance policies, test the waters every few years by approaching different carriers about their programs and rates. Alternatively, ask your current insurance carrier to reduce rates when warranted by overall industry pricing trends and based on the organization’s history of loss.
  • Offset Expenses of the Organization: Many larger sports and recreation organizations want reimbursed for expenses incurred to promote the insurance program to their members. It is permissible in many states for sports organizations to receive a marketing fee in exchange for the performance of non-insurance services. However, organizations can’t cross the line by engaging in services that require an insurance license, such as approving applications or explaining coverages.

For more information on risk management best practices, visit our free risk management library.


Choosing a Sports Insurance Agent/Broker

Selection criteria for sports organizations

Sports insurance agentA prior blog post explained why sports and recreation organizations shouldn’t follow the traditional insurance bidding process of allowing multiple agents to approach the limited marketplace of insurance carriers and managing general agency (MGA)*. To follow-up on this, below are suggested selection criteria to choose the most qualified agent/broker so that such agent can approach the entire marketplace.

Insurance Agency Qualification Checklist:

  • Special department dedicated to sport and recreation insurance risks
  • Number and names of similar sports/recreation organizations insured
  • Premium volume of similar sports organizations insured
  • Carriers or MGAs represented for each policy type
  • Premium volume and special relationships with each carrier/MGA to be approached
  • Resumes of key servicing staff, including experience in sports/recreation insurance niche
  • Specific staff assigned to service account
  • Claims management services
  • Loss analysis, forecasting, and rate justification services
  • In-house authority to issue certificates of insurance
  • Injury-tracking services and automation
  • Training on employee injury reduction, premises safety, auto safety, special events safety, etc.
  • Special risk management services for sports and recreation organizations
  • Agency license for both Property & Casualty and Life and Accident, & Health for all states of organization’s operations
  • Website services including online enrollment, self-issuance of certificates of insurance, educational articles, risk management reports, forms, articles, programs, etc.

Insurance Agent Qualification Checklist:

  • Resume of insurance agent
  • Number of years of experience in insurance industry
  • Number of years dealing with sports and recreation accounts
  • Title or position within insurance agency
  • Ownership in insurance agency
  • Special training and designations such as CPCU, CIC, etc.
  • Producer license for both Property & Casualty and Life, Accident, & Health for all states of organization’s operations
  • Carriers/MGA’s to be approached for each policy type
  • Names and contact information of similar sports/recreation organization clients for reference check
  • Membership in professional trade organizations in insurance industry
  • Board of director positions or committee assignments on behalf of sports/recreation organizations
  • Publications on insurance and risk management on behalf of sports/recreation organizations
  • Number of proposed client meetings throughout year to review insurance and risk management programs
  • Renewal strategy philosophy
  • Disclosure of commissions and fees earned
  • Attendance at meetings trade shows or speaking engagements on behalf of organization

Carrier/MGA Qualification Checklist:

  • M. Best rating for financial strength
  • Number of years in sports/recreation insurance niche
  • Number of similar sports/recreation insurance clients
  • Premium volume of similar insurance clients
  • Names of similar sports/recreation insurance clients
  • Philosophy on acceptable loss ratios
  • Claims services offered
  • Risk management services offered
  • Licensed in all states where organization operates
  • Other services provided

*An MGA is an insurance organization that provides some of the services that are normally provided by insurance carriers in exchange for a fee. Examples of common MGA services include underwriting, policy issuance, loss control, claims administration, and marketing. The MGA as a middleman does not increase the cost of doing business since they provide services that the insurance carrier would be required to otherwise provide. Therefore, the existence of MGA’s reduces the expenses of the insurance carriers.

Problem Exclusions for Sports/Recreation Organizations

Tips for negotiating common problem exclusions in General Liability policies

Sports and recreation organizations and related sanctioning/governing associations often purchase General Liability insurance policies that include dangerous exclusions that could result in lack of legal defense and coverage to pay for settlements or adverse jury verdicts. This is why it is essential for a qualified and experienced insurance expert to actively negotiate with the carriers to remove or modify such exclusions.

All General Liability policies grant broad coverage for bodily injury and property damage caused by an occurrence under the insuring agreement that is found in the beginning of the policy. In addition, all General Liability policies use exclusions to remove coverage for certain situations that are deemed uninsurable for various reasons (ex: too risky, moral hazard, against public policy) or that should be insured under a different type of policy (ex: Workers’ Compensation, Auto, Property). The exclusions include both standard exclusions that are found in the exclusion section of the General Liability policy as well as exclusions that are found in endorsements (i.e. policy amendments) that are attached as pages near the end of the policy.

Below is a list of some of the most common problem exclusions for sports and recreation organizations that are found on General Liability policies. Every attempt should be made to negotiate the removal or modification of these exclusions to a more acceptable version. If negotiation does not yield acceptable results, serious consideration should be given to finding a new insurance carrier. However, this list is not all-inclusive as there are a number of other problem exclusions that are found less frequently.

 Athletic or Sports Participants Exclusion

This exclusion takes away coverage for bodily injury to any person while practicing for or participating in any sports or athletic contest or exhibition that is sponsored by the insured.

Iyouth sports insurancensurance carriers that don’t specialize in insuring sports organizations commonly use this exclusion to control what they perceive to be as an unacceptably high risk. Its existence often slips by insurance agents and risk managers who don’t carefully review the policy form or who aren’t aware that quality sports insurance coverages can be obtained through multiple sources.

The use of this exclusion for most sports and recreation organizations is totally unacceptable since athlete injuries and lawsuits are a common occurrence. Furthermore, sports and recreations organizations represent a severity risk since damages from catastrophic sports injuries can be high. The existence of this exclusion reduces an organization’s General Liability policy to what is commonly known as a spectator liability policy.

Knowledgeable underwriters lower the risk of paying General Liability claims for athletic participant injury lawsuits by mandating the existence of Accident Insurance (amateur sports), Workers’ Compensation Insurance (professional sports), and waiver/release forms. Please see our article “Are Waivers  Worth the Paper They Are Written On?”

Participant vs. Participant Exclusion

This exclusion takes away coverage for instances when one participant sues another participant. Since participants are broadly defined, this could player vs. player, coach vs. coach, or player vs. coach. It’s important to note that most versions of this exclusion don’t penalize other parties that could be dragged into the lawsuit, such as the sport organization as an entity or the directors, officers, or other staff members.

Non-coverage for the all-too-common player vs. coach situations is a totally ridiculous exclusion that must be avoided.  One negotiation strategy is to narrow the context of the Participant vs. Participant exclusion by changing it to a Player vs Player (or Athlete vs. Athlete) exclusion.

An argument can be made for the existence of a Player vs. Player exclusion as a disincentive in adult sports situations where one adult athlete recklessly endangers the safety of another adult athlete. However, it is becoming increasingly common for carriers to remove the Player vs. Player exclusion in youth sports. On the other hand, it could be argued that the Player vs. Player exclusion is not a problem in youth sports since youth players aren’t normally targets in lawsuits because they lack  assets to satisfy judgments.

 Volunteer vs. Volunteer Exclusion

The 2001 and later editions of the standard Insurance Services Office (ISO) General Liability policy form added what is commonly Volunteer liabilityreferred to as the Volunteer vs. Volunteer exclusion, which can have a detrimental and unexpected impact in the sports context. Lawsuits that may fall under the scope of this exclusion include coach vs. coach, umpire vs. coach, manager vs. coach, etc. It’s not uncommon for one coach to accidentally (but negligently) injure another coach during skills demonstrations or drills. For example, one of our youth baseball clients recently filed a claim for a lawsuit arising from batting practice where the head coach hit a ball that struck an assistant coach who was not paying attention. It’s possible to negotiate the removal or modification of this exclusion with many carriers.

Assault and Battery Exclusion

The standard ISO General Liability policy form has an exclusion for bodily injury or property damage expected or intended from the standpoint of the insured. However, this exclusion does not apply to bodily injury resulting from the use of reasonable force to protect persons or property.

youth sports insuranceWhen the Assaultand Battery exclusion is added to the policy, the exception is removed for the use of reasonable force to protect persons or property. This can result in some unexpected denials of coverage in the sports context. For example, a coach or umpire could be denied coverage for engaging in self-defense against an aggressor who is injured and files a lawsuit. Also, lawsuits have been filed against coaches who accidentally injured a participant while trying to break up a fight.

In addition, most versions of the Assault and Battery Exclusion specify that coverage does not apply to the insured (sports / recreation organization) for incidents committed by its employees, volunteers, or any other person; for failure to suppress or prevent an incident; or for negligent hiring, supervision, or training.

It’s common for the sports and recreation organization and its officers and board of directors to be named as defendants along with the staff member who allegedly committed the assault and battery. The most common theory of recovery is for negligent hiring when the accused staff member is found to have a criminal background that should have been an indication of a propensity for violence. This is another reason (other than the concern over sexual offender crimes) why staff members should be screened with background checks for suitability.

Warranty of Waiver/Release

Some General Liability policies may have a warranty provision that voids coverage in the event of a participant injury lawsuit if the sports or recreation organization can’t produce a signed and dated waiver/release agreement on behalf of the injured participant filing the lawsuit. Waiver/release agreements are to be strongly encouraged; however, many organizations don’t have strong administrative and record keeping procedures and it’s possible for a single document to slip between the cracks despite the best intentions of the administrators.

A less severe version of this warranty provision requires the organization merely to have a procedure in place for the collection of signed and dated waiver/release agreements on behalf of all participants. Such wording may not result in coverage denial in the event that a single waiver/release can’t be produced so long as there is evidence that a procedure was in place and there was a good faith attempt to administer such procedure. However, the wording of such warranty provisions must be carefully reviewed to gain a clear understanding of the requirements for coverage.

Punitive Damages Exclusion

Most summons and complaints (lawsuit papers) in the sports and recreation context for bodily injury incidents request punitive damages and refer to the lack of care by the negligent party as being grossly negligent, willful, wanton, and reckless. Proof of such extreme misconduct is necessary to support a claim for punitive damages. Punitive damages are damages over and above the regular compensatory damages such as medical expenses, lost income, pain and suffering, etc. Punitive damages are meant to punish and make an example of the grossly negligent party. Even though punitive damages are often difficult to prove, it does not makes sense for a General Liability policy to exclude punitive damages and subject the covered parties to needless worry.

Some states have case law or statutes that may not allow insurance carriers to insure punitive damages since it may be considered to be against public policy.

 Sex Abuse/Molestation Exclusion

The Sex Abuse/Molestation exclusion endorsement is commonly used by underwriters for youth sports and recreation risks due to sports risk managementthe difficulty in implementing adequate loss controls, the severity risk, and the risk of multiple claimants and incidents. This endorsement is usually attached near the end of the policy.

Other forms of child abuse are often included within the scope of this exclusion including physical abuse and emotional abuse. These often take the form of excessive exercise as punishment and verbal insults.

Sports and recreation organizations should always attempt to negotiate a buyback of this coverage and should stand ready to adopt and implement required loss controls. For more information on the abuse/molestation risk including specific risk management programs and training videos, please visit our risk management library.

Contractual Liability Limitation

Sports and recreation organizations frequently enter into contracts that include indemnification and hold harmless provisions where they assume the tort liability that would ordinarily belong to the other party to the contract. Such assumption of contractual liability can be covered under General Liability policies (depending on the exact wording of the provisions). However, General Liability policies that include the Contractual Liability Limitation Endorsement can take away this needed protection.

An example of the application of this exclusion would occur when a sports organization sends a travel team to play in a tournament and as part of the registration process, the sports organization signs an agreement with the tournament host that includes an unfavorable hold harmless/indemnification provision in favor of the tournament host. Such a provision may require the sports organization to assume all liability for injury to its players, even if arising out of the sole negligence of the tournament host. In the event that a player drowns during a tournament host sponsored and supervised swimming party, the sports organization may be legally responsible due to the contractual assumption of such liability. In such a circumstance, the Contractual Liability Limitation Endorsement could result in a claim denial that could have a devastating impact on the sports organization and its administrators and staff.

Collapse of Temporary Structure

Temporary structureSome General Liability policies may have a Collapse Of Temporary Structure Exclusion that can have the impact of removing coverage in the event of certain bleacher collapses. Bleacher collapses often involve multiple claimants with serious injuries. Whether or not a particular bleacher is temporary or permanent can be subject to debate. The insurance carrier may argue that any bleacher that is not permanently anchored or affixed is temporary.

Ownership/Maintenance/Management of Athletic Fields or Facilities Exclusion

This exclusion if often used by insurance carriers to limit their responsibility to pay for claims that arise out of incidents that occur during sanctioned and supervised operations or activities such as practices, games, tournaments, banquets, meetings, field work days, etc.

Such an exclusion would preclude coverage that arises out of the mere ownership, maintenance, or management of the athletic field or facility. Many serious injuries occur on property at times other than during sanctioned and supervised events. Athletic fields, if not properly secured, often draw members of the public who may participate in pick up games or who may play on playground equipment such as swings and slides. Property owners, lessors, and managers are often found to be liable when a premises related condition is the cause of the injury.

Field / facility owners and lessors (that are responsible for what happens 24/7 under the provisions of a lease agreement) need to verify that their General Liability policy covers the 24/7 ownership or management risk exposure.

Note: The coverage form referenced is ISO CG 00 01 12 07
The above list of problem exclusions is not all inclusive. Each General Liability policy must be carefully reviewed from cover to cover at every renewal to make sure that the underwriters have not slipped in an unacceptable exclusion.

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.

Add-on Helmet Products

Should they be permitted in youth football leagues?

Many youth football teams and leagues are currently using or considering some new products on the market that will modify their existing football helmets with add-on enhancement devices. These include external soft covers such as The Guardian, Shockstrip, or ProCap, internal shock reducers and shock sensors to help to identify concussion candidates. The helmet manufacturers, primarily the big three – Riddell, Rawlings, and Schutt – either don’t recommend the use of these products or have concerns about their use for various reasons.

Many of my youth football insurance clients have asked for my advice on this matter from a risk management perspective. This is a complicated issue with many elements that need to be considered. I can offer my thoughts based on the current information at hand. Please note that this situation is fluid with new developments and statement releases by NOCSAE and governing bodies occurring frequently.

Do add-on devices actually work?

Before getting into the risk management implications, I have to state that I don’t know whether some of these add-on products provide effective concussion protection or not. Each side’s argument  is backed by its own logic and research. The helmet manufacturers state that they are constantly researching new ways to increase concussion protection and have already incorporated all presently proven materials and designs into their existing models. The helmet manufacturers are wary of liability concerns; they could easily be forced into bankruptcy by adverse jury verdicts or not being able to afford liability premiums. As a result, they must follow all protocols and standards closely as regards the law of product liability to preserve their defenses. This requires them to be conservative and risk-adverse about new and unproven ideas and products.

On the other hand, the add-on product manufacturers  are primarily start-ups that are trying to gain market share with innovative new ideas. They are being fueled by the current concussion hysteria  in football and the rush to find a solution to “save the game.” The add-on device manufacturers allege that the big helmet manufacturers are trying to keep them from gaining a foothold by frightening the public as to the safety of their devices and by unduly influencing NOCSAE, The NFL, and other industry associations. See our recent article, “Helmets Preventing Concussions Seen Quashed By NFL.”

The add-on manufacturers and many safety proponents are concerned that the liability roadblocks thrown up by the helmet manufacturers and NOCSAE are hurting the development of player safety. They point out that, from a historical perspective, the independent research and creativity of smaller companies has benefited society with innovative solutions to problems that were thought to be insurmountable, and as a result they should not be stifled. Furthermore, they state that it is the players and parents who should make the decisions about the use of add-on products.

Regardless of which side is correct in this debate (only time and additional research will tell), the following legal and risk management issues are of  importance in a youth football league’s decision about the use of these add-on devices:

  • Voiding the manufacturer’s warranty
  • Voiding NOCSAE certification standard
  • Failure to follow rules or standards of governing or sanctioning body
  • The law of product liability.

Voiding the manufacturer’s warranty

The typical youth football helmet manufacturer’s warranty asserts that the helmet shell and component parts will be free of defects in materials and workmanship for a period ranging from one to three years. Some manufacturers allow the warranty to be extended if the helmet is reconditioned and re-certified to NOCSAE standards every 1 to 2 years. The warranties are subject to a list of voiding factors, such as failure to recondition/ recertify, inserting used replacement liners, use of a face guard or internal or external device not approved by the manufacturer, use of chemicals which may have damaged the shell, excessive drilling, abuse of helmet or unintended use, and removal of the warranty label. Defective products  under the warranty can be returned to the manufacturer for replacement. The warranties disclaim all liability for consequential damage arising from use of the products.

The helmet manufacturers make a big deal out of voiding their warranty as a reason not to use a third party enhancement device.

On the other hand, the add-on manufacturers state that this is not a big deal since the main purpose of the warranty is to replace a broken shell and this rarely happens. Furthermore, some of the add-on product manufacturers offer their own helmet warranty in the event the helmet manufacturer doesn’t honor their own warranty. Another issue is whether the use of an add-on actually voids the manufacturer’s warranty. It depends on the exact wording in the warranty and the nature of the add-on device. It’s almost inconceivable that some add-ons product could damage the helmet shell. One large helmet manufacturer states that they will decide such warranty matters on a case-by-case basis.

It is my opinion that voiding the manufacturer’s warranty is not a big deal for the following reasons:

  1. The financial consequences are not severe because the warranty merely guarantees replacement of the defective helmet part and has nothing to do with liability arising from player injury.
  2. Many add-on product manufacturers provide their own helmet warranty.

Voiding NOCSAE Certification

NOCSAE is a non-profit corporation  formed in 1969 to develop a performance standard for football helmets. The NOCSAE board of directors consists of representatives from associations in the fields of medicine, athletic training, athletic equipment, sporting goods manufacturers, and high schools/colleges. Evidently, the majority of NOCSAE’s operating income comes from sporting goods manufacturers. NOCSAE is conscious of limiting the liability of the manufacturers and promoting the interests of player safety. Their standards are adopted by governing bodies such as NCAA and NFHS.

The NOCSAE football helmet test involves mounting a football helmet (with face mask removed) on a dummy head and dropping it 16 times onto a firm rubber pad from varying heights, contact points, and in various temperatures. Shock measurements are taken to verify that the helmet meets a severity index for concussion tolerance. If it does, the helmet meets the NOCSAE standard. Testing is conducted by the manufacturers prior to the sale of the helmet and afterward by licensed reconditioners. Newly manufactured helmets that pass the test must bear the seal “Meets NOCSAE standards” which must be permanently branded on the outside rear of the helmet. Recertified helmets must bear the NOCSAE seal inside the helmet that reads “This helmet has been RECERTIFIED according to the procedures established to meet the NOCSAE STANDARD.”  It is important to understand that the NOCSAE standard is not a warranty, but simply means that a particular helmet met the standard requirements when it was manufactured or reconditioned.

NOCSAE does not require a helmet to be recertified on a regular basis but recommends that teams/leagues adopt a program of inspection and reconditioning based on a number of factors such as age of players, age of equipment, and usage. NOCSAE does not mandate reconditioning or recertification, but manufacturers may restrict their warranty based on these factors. Any change or modification to the shell or liner from the original manufacturing specifications could alter the performance of the helmet and its performance under the NOCSAE test. However, replacement parts are acceptable if they meet or exceed original manufacturer specifications. The NOCSAE helmet standard does not include the testing of helmets with face masks because they are tested separately. NOCSAE suggests that the original manufacturer be contacted before any materials are applied such as, but not limited to, thinners, paint, wax, solvents, vinyl tape designs, and cleaning agents.

Below is an excerpt from  NOCSAE’S July 16, Press Release:

“The addition of after-market items by anyone that changes or alters the protective system by adding or deleting protective padding to the inside or outside of the helmet, or which changes or alters the geometry of the shell or adds mass to the helmet, whether temporary or permanent, voids the certification of compliance with the NOCSAE standard.”

This ruling likely prompted the Colorado High School Activities Association (CHSAA) to prohibit the use of add-on products during games.

You can also read NOCSAE’s August 7, 2013 Clarification Press Release, which details the helmet manufacturers’ decision on NOCSAE standards being voided.

Pressure from third party manufacturers and safety proponents likely was behind NOCSAE modifying and relaxing it’s original July 16 statement. This new statement  allows the helmet manufacturer to unofficially test the results of its helmet with the add-on device. This statement also makes exceptions for items that are not attached or incorporated (see text below).

Here are some highlights of the August 7, 2013 NOCSAE statement:

The addition of an item(s) to a helmet previously certified without those item(s) creates a new untested model. Whether the add-on product changes the performance or not, the helmet model with the add-on product is no longer “identical in every aspect” to the one originally certified by the manufacturer.

When this happens, the manufacturer which made the original certification has the right, under the NOCSAE standards, to declare its certification void. It also can decide to engage in additional certification testing of the new model and certify the new model with the add-on product, but it is not required to do so.

Companies which make add-on products for football helmets have the right to make their own certification of compliance with the NOCSAE standards on a helmet model, but when that is done, the certification and responsibility for the helmet/third-party product combination would become theirs, (not the helmet manufacturer). That certification would be subject to the same obligations applicable to the original helmet manufacturer regarding certification testing, quality control and quality assurance and licensure with NOCSAE.

Products such as skull caps, headbands, mouth guards, ear inserts or other items that are not attached or incorporated in some way into the helmet are not the types of products that create a new model as defined in the NOCSAE standards and are not items which change the model definition.” (Note: This is not the official position of NOCSAE or any helmet manufacturer but a leading concussion blogger speculates that the exception applies to MC10/Reebok Checklight and Guardian Cap.)

See the April 2013 statement from National Athletic Equipment Reconditioners Association (NAERA) regarding the removal of aftermarket enhancements and related complications during the recertification process:

Based on the latest NOCSAE clarification, the helmet manufacturer has the right to void the original NOCSAE certification for a particular add on product. This being the case, there is legal risk in allowing the use of an add on device on a helmet in a youth football program if an injury and lawsuit results where the helmet manufacturer takes the position that it voided the NOCSAE certification due to the add on  product.

Violation of governing/sanctioning body mandates

Do the use of these add on devices violate the rules of the various governing / sanctioning bodies such as NFHS, American Youth Football, Pop Warner, USA Football?

Most youth football leagues follow the rules of their state version of the NFHS rules and regulations.

The NFHS has not disallowed the use of certain external enhancement devices per their Rules Review Committee Statement, August 2012.  Here is the critical element of their opinion: “In the absence of a clear answer to the “net impact on protection” issue, the decision as to whether to use or not use helmet attachments remains, at the high school level and all other levels, within the discretion of the various teams, coaches, athletes and parents.”

However, as a result of the latest August 7, 2013 NOCSAE clarification, the NFHS may be pressured to reconsider its position and to disallow an add on product should a helmet manufacturer declare that its use voids the original helmet certification.

The NFHS rules can be amended by the various state member associations. For example, the Colorado High School Activities Association (CHSAA) recently prohibited the use of these products during games but not during practice.

It is always safest from a liability perspective to follow the rules of the governing / sanctioning body. Failure to do so will certainly be used against a team or league in a court of law and can be a strong indication of negligence.

Use of add-on products trigger legal defenses for helmet manufacturers

In the event of a serious head or neck injury, the plaintiff’s attorney will likely sue the helmet manufacturer/ distributor; add on product manufacturer / distributor; team / league; individual administrators; coaches, managers, trainers, and referees; and possibly the sanctioning body organization. Each will likely point the finger at the other defendants and will plead all the legal defenses that are available such as the absence of negligence, the other defendants were negligent, assumption of risk, waiver / release, etc.

What does product liability case law say about the legal defenses that are available to helmet manufacturers that may be triggered by the unauthorized use of add on products? Here is a list of such defenses:

  • Improper Use Defense — Helmet was not used in manner intended by helmet manufacturer when plaintiff (injured party) was injured.
  • Product Labeling And Directions Defense – The plaintiff or other responsible parties (parent, team, league, etc.) ignored the written warnings, directions, and risks that were communicated in helmet manufacturer’s materials.
  • Altered Product Defense – The helmet manufacturer is not responsible for plaintiff’s damages if the plaintiff or other party altered the product once it left the helmet manufacturer’s control and furthermore the alterations caused the plaintiff’s injury rather than the original unaltered helmet.

Should add-on products be used due to concussion concerns?

Based on the analysis above, from a legal and risk management perspective, it is safest to follow the recommendations of the helmet manufacturers as regards the use of add on products. If you follow their recommendations, they will be the deepest pocket in the event of a catastrophic head or neck injury in your program. The major helmet manufacturers likely carry a combined General Liability / Excess Liability insurance limit in the range of $10M to $25M. On the other hand, the add on product manufacturers likely carry much lower limits of liability insurance due to their restricted start up budgets.

However, if your sports program is going provide or allow the use of add ons that are declared by the original helmet manufacturer to void the NOCSAE certification, despite the liability risks of doing so, it is recommended that your program carry its own General Liability/Excess Liability policy with combined each occurrence limits of at least $5,000,000 such as the insurance program provided by American Youth Football. In addition, the requirement that players and parents sign an appropriately worded waiver/release agreement that specifically warns of the dangers of violating the manufacturer’s instructions as regards add on products should be considered.  

Additional research may vindicate many of the add on product manufacturers to the point where public demand will force the major helmet manufacturers to accept their products if they are proven to promote safety.

Lease of Premises Agreements

Something all sports and recreation organizations should review

Most sports and recreation associations lease office space. Lease agreements contain numerous insurance and risk management considerations that must be addressed up front before entering into the lease or reviewed after the fact if the lease has already been entered into. It’s customary for the landlord to require the tenant to carry the following types of insurance policies to protect the interests of the landlord:

  • General Liability in the amount of $1,000,000 combined single limits to protect against bodily injury, property damage, personal injury, advertising injury, and damage to premises of others in the amount of $300,000. It’s usually required that the landlord be named as an additional insured.
  • Property insurance may be required to protect the replacement cost value of tenant’s improvements, contents, and sometimes building (in the event of a net lease) under the “special perils” coverage form. On occasion, it is required that earthquake and flood insurance be carried. Also, the tenant may be required to insure the glass against breakage and the heating, air conditioning, electrical, and plumbing systems against mechanical breakdown. If this is the case, the Property policy of the tenant must be endorsed to specifically provide coverage for glass and mechanical breakdown.

In the spirit of efficiency and reciprocity, most well-written leases should contain a waiver of subrogation clause. This means that both parties agree that if their property insurance company pays the claim, that the insurance company will waive its subrogation (or lawsuit) rights against the other party in order to recoup the loss. Sadler & Company can provide the sample wording for this provision.

Most well-written leases will also contain an indemnification/hold harmless provision whereby each of the parties agrees to assume the liability and legal defense cost of the other party for lawsuits arising out of each party’s own negligence. In many cases, since the landlord is the party in power, this provision is often heavy-handed in their favor and should be negotiated on a more reasonable basis.

So why should you care if your lease contains insurance requirements that you’re not meeting or unreasonable contractual liability assumptions through hold-harmless/indemnification agreements? These considerations don’t matter  – until a problem arises. And then it’s too late to do anything about them.

Within minutes, Sadler & Sports Recreation insurance can review your lease agreement and make recommendations based upon your unique situation. If you are interested in a no-obligation review, please call us at 800-622-7370.

Membership Agreement and Rulebook Liabilities

Avoid the shotgun effect by transferring the risk of loss to the responsible party

Statewide, region or national membership agreements and rule books that are published by sports/recreation associations often result in liability issues between the association and its local members (ex: teams, leagues) that need to be addressed. As usual, attempts need to be made to transfer the risk of loss to the responsible party whenever feasible.

Most membership associations sanction or approve various competitions on a local level. The sanctioning rules and agreements are often specified in both the membership agreement and the rulebook. Whenever a spectator or a participant is injured at a local competition, it is common for the association to be shotgunned into the lawsuit along with the local sports organization and its directors, officers, employees, and volunteers. The result is that the insurance carrier for the association is forced to spend money in defending the association in a lawsuit in which it probably had no business being involved. This could result in a less attractive loss history for the association and future rate increases or unavailability of coverage.

A national softball association client of our was shotgunned into a lawsuit after a coach assaulted an umpire during a local competition. The legal basis of recovery was that the coach was a hired employee of the association, which had a duty to investigate the criminal record of the coach prior to hire. Presumably, had they done this, they would have uncovered incidences of violence and woulSports organization rule bookd have never hired the coach. Of course, this is preposterous because coaches of local leagues are almost never employees of the national association. Nevertheless, such an incident can result in the insurance carrier of the association spending $5,000 to $10,000 in legal defense costs to have the association removed from the lawsuit.

It’s a matter of language

This trend of associations being shotgunned into lawsuits where they have absolutely no operational control at the local level has resulted in the need for additional risk management precautions. As a result, we have developed specific language for our clients outlining what the national association is and is not responsible for based on operational control. If such a statement is placed in the membership agreement or the rulebook, we have found that it is relatively easy to convince the plaintiff’s attorney to immediately drop the association from the lawsuit.

Adequate coverage is critical

Take into consideration that the best way to protect the association against liability is to make sure that adequate insurance is being carried by the local organizations and the tournament hosts. If feasible, it is best for the association to mandate minimum insurance requirements for both regular season and tournament competitions. The General Liability Policy of the local member should always name the association as an “additional insured.”

Please contact Sadler & Company at 800-622-7370 if you would like to have a no obligation consultation on the simple wording that can be inserted into your membership agreement or rulebook.