Contractual Liability Limitation In Sports General Liability Policies

Standard General Liability policy forms automatically include coverage for many types of contractual liability that may be assumed for tort liability for injuries to third parties in certain types of hold harmless and indemnification provisions. The Contractual Liability Limitation endorsement can take away needed protection for a sports organization that enters into certain contracts

For example, a league may send a team to play in a travel tournament and the agreement with the tournament host may include an indemnification and/or hold harmless provision that requires the travel team and its administrators to contractually assume all liability for injuries to players during tournament events, even if due to the sole negligence of the tournament host. In the event of a player injury during tournament host provided entertainment such as a swimming party, the travel team would be contractually responsible for all damages even though liability for such would normally belong to the tournament host but for the hold harmless / indemnification provision. The presence of the Contractual Liability Limitation in this example would likely remove all General Liability coverage for the travel team and may subject its administrators and coaches to personal liability.

The presence of the Contractual Liability Limitation endorsement should be negotiated out of a General Liability policy for a sports organization. If negotiations are not successful, a new carrier should be found upon renewal.

Source: John Sadler