Beware the Athletic Participant Exclusion

Understanding Insurance Policies

It renders many sports and recreation policies next to useless

The existence of the exclusion of “Athletic or Sports Participants” is by far the most troubling exclusion that is commonly found in General Liability policies of sports and recreation organizations. The applicable language of this exclusion reads: “With respect to any operations shown in the schedule, this insurance does not apply to “bodily injury” to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.”

Obviously, sports and recreation organizations frequently face these types of lawsuit risks and the damages tend to be severe in nature. Therefore, it is unconscionable for this type of exclusion to appear in the General Liability policy of a sports organization if such coverage is readily available in the market place. In the current market, such coverage is readily available and with the exception of certain semi-pro adult sports or high risk sports.

Sports and recreation organizations that have the Athletic Participant Exclusion have their coverage reduced to nothing more than a policy that covers lawsuits arising out of spectator injuries.

If the General Liability policy makes no mention of the Athletic Participant Exclusion, it can be safely assumed that coverage automatically exists, even if it is not expressly stated. However, some carriers provide an affirmative coverage grant by creating a coverage called Participant Legal Liability (even though this is not necessary and is primarily a marketing ploy). It is important to note that most carriers that specialize in writing General Liability for sports and recreation organizations do provide the affirmative coverage grant of Participant Legal Liability on a special endorsement. But, the special endorsement may actually introduce certain new exclusions, such as Player vs Player or Participant vs Participant, which would not be found if the policy were silent.

It’s amazing how many sports and recreation organizations are apparently unaware of the Athletic Participant Exclusion on their policy even though they presumably have knowledgeable insurance agents and risk managers looking after their interests. I teach classes to recreation department administrators and I have found that the Athletic Participant Exclusion exists on roughly 25% of the General Liability policies brought to class to be reviewed.

Read our other article on this topic related to special events an competitions.

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