Don’t Rely On Coach Certification Liability Insurance

Posted by admin | Posted on 07-01-2009

Category : General Liability, Recreation Departments, Teams / Leagues

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Several of the coach certification training organizations offer General Liability insurance as a membership benefit to the coaches. This is a great benefit and is designed to act as a “safety net” in the event that the sports organization neglects to provide its own insurance or in the event that such 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 forego the purchase of their own General Liability insurance. Such practice is a dangerous mistake because individual coach certification General Liability insurance will not provide protection under the following circumstances:
 
* It won’t cover the sports organization as an entity itself (ex: corporation) and as a result the assets of the entity are unprotected in the event that a lawsuit results in legal defense costs, settlement, or adverse jury verdict. Even small sports organizations can have tens of thousands of dollars of asset value in its 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 required as a pre condition required by a property owner for field or facility access.
 
* When a youth participant is injured, it is customary for all adult volunteers who are in close proximity to the injury to be shot gunned into the lawsuit based on negligent specific supervision. This includes the head coach, assistant coach, manager, umpire, referee, team mother, etc. In addition, the sports organization board members and officers will normally be included based on lack of general supervision. The problem is that not all of these adult volunteers are likely to be certified coaches and as a result some will be unprotected.
 
* 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, ice cream / restaurant celebration trips, backyard cookouts, banquets, fundraisers, etc.
 
In summary, all sports organizations need their own General Liability policy.
 
 Source: John Sadler
Copyright 2002-2008, Sadler & Company, Inc.

Excuses Why Sports Organizations Don’t Buy Insurance

Posted by admin | Posted on 06-01-2009

Category : Accident Insurance, Day Camps, General Liability, Recreation Departments, Teams / Leagues

Tags: , , , ,

Many sports administrators mistakenly believe that they don’t need to buy Accident and General Liability insurance to cover their sports programs due a variety of reasons. Based on my 22 years in the sports insurance industry, I have compiled the following list of invalid excuses:
 
1. We Have Never Had A Serious Injury Or Lawsuit In The Past…….
 
The fact is that sports lawsuits tend to be infrequent but have a high severity potential in terms of potential damages owed. Some sports organizations may go over five years without a serious incident but it is just a matter of time.
 
2. Waiver / Release Forms Will Prevent Lawsuits
 
The fact is that the use of a well drafted waiver / release forms is a great tool for potential contractual transfer and for triggering the assumption of risk defense under some circumstances; however, they won’t prevent a lawsuit from being filed. Even if the waiver / release does result in the lawsuit being dismissed on summary judgment, it may still cost from $10,000 to $20,000 in legal defense costs to get to that point.
 
Typically, a poorly drafted waiver / release will be of little value and most sports organizations don’t pay enough attention to the details. Also, in the context of a minor, only ten states will presently accept the signature of a parent to bind the minor which may result in lawsuit dismissal on summary judgment. In the other 40 states, the fallback position will be to use the waiver / release to trigger the assumption of risk defense which may result in a significant reduction in damages owed. But……..a waiver / release will never take the place of General Liability insurance.
 
3. 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. The problem is that most lawsuits make these allegations and the judge will have to sort out if they have any merit which can take some time. The greater the time that is taken 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.
 
4. Employees / Volunteers / Administrators Will Provide Their Own Individual 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 have 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.
 
Coach Certification Liability policies are a great membership benefit and were designed to act as a safety net in the event that other insurance is not in force or has an problem exclusion. However, they should not be relied on in lieu of primary insurance for the sports organization. I will explain this in detail in another blog posting.
Source: John Sadler
Copyright 2002-2009, Sadler & Company, Inc.