Posts Tagged ‘certificate of insurance’

Sport injuries off the field

The Independent Contractor or Subcontractor Limitation

Services such as concessions umpires, security, field maintenance and janitorial are typically outsourced by sport and recreation organizations as independent contractors or subcontractors.

The Independent Contractor or Subcontractor Limitation endorsement on a General Liability policy can have adverse consequences for sports and recreation organizations.

Don’t play around with independent contractors

The negligent actions of these independent contractors or subcontractors can result in the sports organization being shot gunned into a lawsuit.

The Independent Contractor or Subcontractor Limitation endorsement will preclude coverage unless the independent contractor or subcontractor maintains a General Liability policy at the time of injury, with limits equal to the sports organization while naming such sports organization as “Additional Insured.”

Protecting the organization

It is highly recommended that sports organizations require all independent contractors and subcontractors to provide evidence of General Liability insurance with limits of at least $1,000,000 combined single limits. Such policies should name the sports organization as “additional insured.”

However, General Liability coverage of the sports organization being contingent on the insurance requirement of the independent contractor or subcontractor is a risky proposition.  If the sports organization is diligent about administrative duties, an uninsured independent contractor or subcontractor could easily slip between the cracks.  In addition, a certificate of insurance is only an indication of coverage status as of the date of its issuance. Coverage could later be canceled due to nonpayment of premium with no absolute notification requirement to certificate holders.

For the reasons outlined above, it is not acceptable to allow the existence of the Independent Contractor and Subcontractor Limitation endorsement on the General Liability policy for a sports organization.

Source:  John Sadler

Insurance Requirements for Rec Facility Users

Reduce liability exposure with proper collection of certificates of insurance

Facility user groups such as teams, leagues, tournament hosts, camps, instructors, and special event operators must carry adequate insurance. In addition to providing the proper coverage, Sadler Sports Insurance can assist you in reducing your liability by:

    • setting minimum insurance limits and coverage standards that adequately protect the recreation department
    • providing a simple free checklist tool to assist in verifying insurance compliance
    • referring uninsured facility users to a specific web page where they can get an instant quote,  instantly pay, and bind coverage  without any delays or hassles. Their delays and hassles become your delays and hassles.
    • setting your recreation department up in our system so that the certificates of insurance meet your special wording requirements every time, which cuts down on your frustration over certificates that don’t meet your requirements.

The video below walks you through the process in more detail.

League Insurance Carrier Tries to Deny Injury Claim

Certificate of insurance was key in court ruling

A General Liability policy was taken out under the name of Northeast Youth Football League and its member teams. A certificate of insurance evidencing “additional insured” status was issued on behalf of a member team to the field owner as required by agreement. Another member team wanted to use the fields and the same certificate of insurance was submitted. A spectator was injured in a fall from a bleacher during a game played by the second team. Great American E&S Insurance Company denied the claim and sought a declaratory action for its responsibility to pay for the injury.

Certificate of INsurance

Sample Certificate of Insurance

Great American unsuccessfully argued that the certificate of insurance did not apply to the second team since its name was not listed on the certificate of insurance. The Supreme Court, Appellate Division, Third Department, New York disagreed by reasoning that neither the certificate of insurance nor the policy included the names of any of the teams, but instead listed only the league and its member teams.

Great American also argued that two separate policy exclusions would be applicable. The first was a Design Defect and Structural Maintenance Exclusion and the second was an exclusion stating that Additional Insureds were not covered for their sole negligence. However, the court reasoned that the latter exclusion could apply but said that the insurance carrier waived its right to use it as a defense since no written disclaimer was sent specifically mentioning their intent to use such exclusion.

In my opinion

Had the carrier given proper notice, it is likely that they could have properly denied the claim for the additional insured field owner, who was likely solely negligent in the slip and fall accident. The only way for the team to have shared in this negligence would have been due to lack of supervision or if the liability had been contractually assumed in a lease or license agreement.

Source: Rough Notes, February 2010