Difficult to understand in context of special events or competitions
General Liability policies often include an Athletic or Sports Participants to exclude exposure for sports activities that may occur at special events for nonprofit associations and corporate picnics. However, the wording in this exclusion is unclear and can lead to surprising results when interpreted by claims departments and courts.
The exclusion states that the insurance policy does not cover “bodily injury to any person while practicing for or participating in any contest or exhibition of an athletic or sports nature sponsored by the named insured.” The two most common issues are determining whether a particular activity is an athletic or sports contest and what is meant by 
“practicing for or participating in.”
Unfortunately, most policy versions of this exclusion do not define these terms, and court decisions are all over the board in rulings. Here are examples of how various courts have ruled:
- A rodeo event where participants attempted to remove ribbons from a bull’s horn was found to qualify as a contest of an athletic or sports nature since the participants were engaged in physical activity for pleasure. The Oklahoma court instructed that the word “contest” means a competition or struggle for victory and “sports” is defined as physical activity engaged in for pleasure.
- The Louisiana Supreme Court ruled that cheerleading activities during a football game did not constitute a sports contest since cheerleading was ancillary to the real sporting event – the football game.
- A New Mexico court ruled that a jockey was not practicing for a horse race while exercising a racehorse. The court reasoned that “practicing” means the same act or acts required for success in the sport in question or at least so similar as to develop the particular capabilities and skills essential to success. Furthermore, the risks accompanying practice must be the same as those faced by a participant in an actual competition.
- A Louisiana court ruled that a football team’s school-supervised, off-season weight-lifting program was not practicing football since practicing for football involved running of plays, passing, blocking, tackling, etc.
- A Michigan court ruled that a referee was not a participant in a hockey game because a participant is “actively involved in the contest either individually or jointly with team members, but the referee has “an uninvolved role and is responsible for the application of the rules to the contest.”
Where the exclusion is present, what would the claims department of the insurance carrier or the courts decide in the event of an injury at a company sponsored fishing tournament? This question was recently posted to the Big I University faculty in their April, 2012 online publication. The faculty members were divided on the predicted outcome.
Based on the lack of definitions in the Athletic or Sports Participants Exclusion and the unpredictability of the above rulings, policyholders should always assume that the exclusion removes all coverage for anything similar to an athletic event or practice unless written clarification has been received from the underwriter or claims department of the carrier.
