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AGENTS & BROKERS ONLY |
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Other Sports & Recreation Insurance Programs |
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
Recreation Department Accident Insurance: Individual or Blanket?We recently received a question from a recreation department administrator about whether or not they should offer Accident insurance on their sports programs on an individual or blanket basis. He also wondered if the recreation department would have any remaining liability if a player refused individual insurance. Here was our answer.
I teach the courses on sports insurance and risk management for NAYS’s Academy For Youth Sports Administrators. The standard for sports insurance as set by the Academy For Youth Sport Administrators is to offer blanket Excess Accident insurance where a premium is paid on behalf of and coverage is provided for all participants. Accident insurance on every participant is the first line of defense against lawsuits resulting from participant injury. Accident insurance, if properly written, can almost guarantee that the parent will have no out of pocket medical bills.
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Sadler & Company, Inc.
P.O. Box 5866
Columbia, SC 29250-5866
Phone: (800)622-7370 Fax: (803)256-4017
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