Ownership and Management Of Athletic Fields Exclusion

Posted by admin | Posted on 28-06-2010

Category : General Liability, Recreation Departments, Teams / Leagues

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It is clear that all sports and recreation organizations have liability for incidents that occur during scheduled, sanctioned and supervised activities such as tryouts, practice, and play.

 

However, some sports organizations that own or are long term lessees of athletic facilities are also legally responsible for injuries that occur on a 24/7 basis for 365 days a year.  Ownership triggers the liability for premises owners and lease agreements with hold harmless and indemnification provisions trigger the liability for long term lessees. 

 

If your sports organization has 24/7 liability as discussed above, you should avoid the endorsement entitled “Ownership, Maintenance, Management of Athletic Fields or Facilities Exclusion or similar exclusions.  As an alternative to removing this exclusion, some sports General Liability carriers allow a buy back that is commonly called “24 Hour Premises Liability”.

 

Source:  John Sadler

Collapse of Temporary Structure Exclusion In Sports

Posted by admin | Posted on 23-04-2009

Category : General Liability, Recreation Departments, Teams / Leagues

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General Liability insurance policies for sports and recreation organizations sometimes contain a potentially dangerous exclusion entitled “Collapse of Temporary Structure Exclusion.”

 

Presumably, the purpose of this exclusion is to protect the General Liability carrier against paying a claim in the event of collapse of bleachers or similar structures such as tents, signs, billboards, and fences that are temporary in nature.

 

Unfortunately, the exclusion does not define “temporary”.  Does “temporary” mean a one time event?  A season?  A Year?  Are any bleachers that can be moved considered temporary?

 

Bleacher collapse is a serious event in terms of both the number of spectators that can be injured and their severity potential.  Because of the seriousness of these bleacher collapse incidents, sports organizations can’t afford to have this ambiguous exclusion on their General Liability policy.

 

Source:  John Sadler


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Beware Athletic Participant Exclusion In Sports General Liability

Posted by admin | Posted on 07-04-2009

Category : General Liability, Recreation Departments

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The existence of “Exclusion – Athletic Or Sports Participants” is by far the most troubling exclusion that is commonly found in General Liability policies of sports and recreation organizations. The applicable language of this exclusion reads: “With respect to any operations shown in the schedule, this insurance does not apply to “bodily injury” to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.”

 

Obviously, sports and recreation organizations frequently face these types of lawsuit risks and the damages tend to be severe in nature. Therefore, it is unconscionable for this type of exclusion to appear in the General Liability policy of a sports organization if such coverage is readily available in the market place. And, such coverage is readily available and affordable in the current market place with the exception of certain semi pro adult sports or sports of a high risk nature.

 

Sports and recreation organizations that have the Athletic Participant Exclusion have their coverage reduced to nothing more than a policy that covers lawsuits arising out of spectator injuries.

 

If the General Liability policy is “silent” and there is no mention of the Athletic Participant Exclusion, it can be safely assumed that coverage automatically exists even if it is not affirmatively stated. However, some carriers provide an affirmative coverage grant by creating a coverage called Participant Legal Liability (even though this is not necessary and is primarily a marketing ploy). It is important to note that most carriers that specialize in writing General Liability for sports and recreation organizations do provide the affirmative coverage grant of Participant Legal Liability on a special endorsement. But, the special endorsement may actually introduce certain new exclusions such as Player vs Player or Participant vs Participant which would not be found if the policy were silent. These two exclusions will be discussed in a future blog.

 

It is always surprising to me to find out how many sports and recreation organizations have the Athletic Participant Exclusion on their policy but don’t seem to be aware even though they have presumably knowledgeable insurance agents and risk managers looking out after their interests. I teach classes to recreation department administrators and I have found that the Athletic Participant Exclusion exists on roughly 25% of the General Liability policies that they bring to class to be reviewed.

 

Source: John Sadler

Covered Activities Under Sports General Liability Policies

Posted by admin | Posted on 06-04-2009

Category : General Liability, Recreation Departments, Sports Camps / Clinics, Teams / Leagues

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General Liability policies for sports and recreation organizations should cover the following activities that are adult supervised and sanctioned by the sports organization:
  • Tryouts
  • Games
  • Practices
  • Tournament
  • Non Sport Outing
It is critical that coverage is included for non sport outings such as swimming parties, backyard cookouts, restaurant and ice cream celebration trips, etc.  Some of the most serious injuries and largest lawsuits that I have witnessed over the past 20 years have come from non sport outings – particularly swimming parties.
 
Some General Liability policies that are deficient may restrict coverage to owned and leased premises that are scheduled on the policy.  This could be a big problem if the sports organization has travel teams or if non sporting outings occur away from the premises.
 
Some General Liability policies include endorsements that restrict coverage to the time periods when officially sanctioned events take place.  This is a big problem if a sports organization owns its field or facility or is responsible under the terms of a lease on a 24/7 basis.
 
Source:  John Sadler
 
Copyright 2004-2009, Sadler and Company, Inc.  All Rights Reserved

Named Insureds Under Sports General Liability Policies

Posted by admin | Posted on 04-04-2009

Category : General Liability, Recreation Departments, Sports Camps / Clinics, Teams / Leagues

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The named insureds under the General Liability policy for a sports or recreation organization should include the legal entity itself and its directors, officers, managers, employees, and volunteers.
 
All of the above mentioned parties are covered by most late edition General Liability policy forms.  However, many prior policy forms which are still in use neglect to add coverage for volunteers.
 
It is of critical importance to correctly list the name of the legal entity for the sports or recreation organization.  For example, if the organization is incorporated or is a limited liability company, Inc. or LLC should appear in the name.  In other words, the name should be listed exactly as the entity was chartered with the appropriate state governmental office.  Failure to correctly list the name of the legal entity could possibly result in coverage denial based on a technicality.
 
Independent contractors that perform services for your sports organization and are paid on 1099’s are not covered under the standard policy forms unless specifically endorsed onto.  However, the sports or recreation organization and other insured persons are covered if the negligent acts of the independent contractor results in a lawsuit against any named insured.
 
 
Source:  John Sadler
 
Copyright 2004-2009, Sadler and Company, Inc.  All Rights Reserved

Occurrence vs Claims Insurance Made For Sports Organizations

Posted by admin | Posted on 02-04-2009

Category : General Liability, Recreation Departments, Sports Camps / Clinics, Teams / Leagues

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Occurrence policy form is superior to claims made coverage under a General Liability policy for a sports or recreation organization such as a team, league, camp or recreation department.
  
Claims made coverage is far more complicated to administer as opposed to an occurrence coverage form for the following reasons: 
 
When renewing a claims made policy, the agent must be careful to set the retroactive date back to the original inception date for the first claims made policy.
 
In the event that a claims made policy has been canceled or non renewed due to neglect, the retroactive date must be properly set upon renewal.
 
When changing from a claims made policy form to an occurrence policy form, “tail coverage” or an “Expended Reporting period” must be purchased so that coverage will remain in force for delayed reaction lawsuits that are filed for covered injuries that occurred during the claims made policy period(s) but that are not reported until after the last claims made policy has expired.
 
When a sports organization is going to shut down its operations, the same “tail coverage” or “Extended Reporting Period” must be purchased to protect the past administrators and volunteers against future delayed reaction lawsuits.
 
Sports organizations present the perfect opportunity for delayed reaction lawsuits that can be so dangerous under claims made policy forms.  For example, a minor who is injured at age 5 can wait until the age of 18 plus 2 years for the statue of limitations to run, which is age 20 before filing a lawsuit.  During this time span of 15 years, there is too great a chance that a technical mistake will be made under the claims made policy form which could void the coverage.
 
Always buy the occurrence policy form instead of the claims made policy form under General Liability for a sports or recreation organization.
 
Source:  John Sadler
 
Copyright 2004-2009, Sadler and Company, Inc.  All Rights Reserved
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