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.