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AGENTS & BROKERS ONLY |
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Other Sports & Recreation Insurance Programs |
General Aggregate Limit For Sports General Liability PoliciesThe General Aggregate limit on a General Liability policy for a sports or recreation organization such as a team, league, camp, or recreation department describes the maximum amount that is available under the policy to pay multiple lawsuit occurrences during a one year policy period.
The General Aggregate applies to premises and operations types of lawsuits such as those arising from spectator and participant injuries.
The minimum acceptable limit for the General Aggregate is $2,000,000 or NONE per league. Having a General Aggregate of NONE provides the broadest coverage since NONE means that there is no General Aggregate cap. In other words, there is an unlimited amount of coverage available.
For example, if a sports organization’s Each Occurrence limit is $1,000,000 and their General Aggregate limit is $2,000,000, they will have enough General Aggregate limits to pay the following:
Once the General Aggregate has been breached by multiple lawsuit occurrences during the policy year, the policy will no longer respond.
Some larger local, state, regional, and national sports organizations have customized their own General Liability programs for their membership. If a large number of teams or leagues share the same General Aggregate limit, this can be a problem as there might not be enough General Aggregate limits available.
For example, I have seen national organizations with thousands of leagues that have shared a single General Aggregate limit of $2,000,000. If several leagues were to have claims during a single policy year that totaled $1,500,000, there would only be $500,000 in General Aggregate limits left for the rest of the leagues.
The solution is to endorse the policy to make the General Aggregate limit to apply separately to each insured league.
Source: John Sadler
Copyright 2004-2009 Sadler & Company, Inc. All Rights Reserved
Products and Completed Operations For Sports OrganizationsSports organization such as teams, leagues, camps, and recreation departments need to carry General Liability policies that protect against Products and Completed Operations lawsuit exposures.
Product liability for sports organizations can arise from the sale of defective products that injures someone away from the premises after control of the product has been relinquished.
Common examples include injuries arising from concession sales such as food poisoning or a broken tooth from a hard object hidden in food. Other exposures can result from the sale of fundraising products, team identity items, and proshop sales.
In addition, it is possible for a completed operation of a sports organization to result in liability exposure. An example would be a construction project off premises such as temporary bleachers or a stage that results in injury.
Most sports organizations don’t have a large Product/Completed operations exposure and as a result the minimum recommended limit for the Products/Completed Operations General Aggregate is $1,000,000.
Source: John Sadler
Copyright 2004-2009 Sadler & Company, Inc. All Rights Reserved
Covered Persons Under Sports Accident InsuranceAn Accident policy customized for sports and recreation organization should cover all players and staff whether paid or volunteer.
Staff typically includes all head coaches, assistant coaches, managers, umpires, referees, concession workers, scorekeepers, field maintenance workers, and league officials such as directors and officers. Our statistics indicate that approximately 6% of Accident claims occur to non player staff.
Your General Liability carrier may require that Excess Accident insurance is carried on all “participants”; otherwise, General Liability coverage may be voided in the event that the injured participant files a lawsuit. The definition of “participant” must be referenced in the General Liability policy. Typically, the definition will include all persons that are granted access to restricted areas where the public is normally not allowed. Therefore, your Accident insurance policy must cover all players and staff.
Some may argue that paid staff should be covered by Workers’ Compensation. However, Workers’ Compensation laws vary from state to state and most state laws exempt certain employments where payment is less than a certain threshold. In addition, very few private sports organizations carry Workers’ Compensation.
Source: John Sadler
Copyright 2004-2009 Sadler & Company, Inc. All Rights Reserved
Covered Activities Under Sports Accident InsuranceAn Accident insurance policy customized for sports and recreation organizations such as teams, leagues, camps, and recreation departments should cover all sports organization sanctioned and adult supervised activities including tryouts, practices, games, tournaments, non-sport outings and authorized group travel to and from the above.
It is very important for an Accident insurance policy to cover non-sport outings such as awards banquets, celebration trips for ice cream, backyard cookouts, swimming parties, trips to see college or pro ballgame, etc. Some of the most serious injuries in youth sports can arise out of these non-sport activities.
Coverage for travel to and from covered activities is a controversial subject. At a minimum, coverage should be provided for authorized group travel to and from these events. Examples of group travel would be in single vehicles such as a bus, mini van, or a caravan of vehicles.
Some sports organizations would like to see coverage extended to individual travel to and from the covered events. However, many Accident insurance carriers will balk at providing this coverage due to the high severity exposure as they argue that the sports organization is not responsible for injuries arising from individual travel for which it does not direct, control or supervise.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Payout Period Under Sports Accident InsuranceUnder an Accident insurance policy for a sports or recreation organization, the payout period is the time period for which incurred medical bills will be paid from the date of the injury.
The most common payout period under an Accident policy is one year. However, for a small additional premium, the payout period may be extended to two or three years.
In cases where the medical limit is $100,000 or higher, it is recommended that the payout period be amended to a period of two or three years. The reason is because if the bills are greater that $100, 000, it is more likely that bills will continue to be incurred for more than one year.
In addition, there are other situations where medical surgeries and treatments to injured minors may be delayed until they reach certain growth or developmental benchmarks. Such delays can result in no coverage if the surgery or procedure occurs after the expiration of the payout period. This is another reason for extending the payout period to two or three years.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Mandatory vs Optional Participation In Sports Accident InsuranceMandatory participation by all participants under an Accident policy is superior to optional participation by some participants.
Most Accident policies covering sports and recreation organizations require a premium to be paid on behalf of and coverage to be extended to all participants. Since most Accident coverages are excess or secondary, mandatory participation by all participants results in a representative spread of participants that are both insured and uninsured as respects to existing family health insurance.
On the other hand, some Accident policies covering sports and recreation organizations allow each participant or his or her parent to elect whether or not they want coverage. Optional participation results in adverse selection against the insurance carrier since only those who don’t have existing family health insurance will normally opt to purchase Accident coverage under optional participation.
Because most of the participants purchasing coverage under an optional participation plan don’t have existing family health insurance, the Accident policy will be paying most claims on a primary basis which will be very expensive for the insurance carrier.
As a result, optional participation Accident policies tend to be very expensive and often unaffordable. In order to make them more affordable, the insurance carrier will water down the benefits by either lowering the medical limit or by inserting internal payout limitations or sublimits.
Watered down benefits under Optional participation Accident policies don’t adequately cover medical bills in the event of a moderate to serious injury. If all medical bills are not paid, the result can be a lawsuit against the sports organization in search of a deep pocket.
In addition, many General Liability carriers that cover sports organizations require that Excess Accident Insurance is carried on all participants on a mandatory participation basis. Otherwise, General Liability coverage can be voided in the event of a participant injury lawsuit.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
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