Archive for the ‘Directors & Officers’ Category

Travel Ball: Pros, Cons, Injuries and Insurance



Travel ball rebounds from COVID

Prior to the COVID-19 pandemic, the youth sports market in the United States was a $19 billion industry, according to a study by WinterGreen Research. Youth travel sports have rebounded from the impact of the pandemic. They now account for a significant segment of the market.

Youth sports travel teams are composed of athletes who play at an elite level in sports that include soccer, softball, baseball and lacrosse, among others. Teams travel long distances for games, tournaments and showcase events.

Along with offering a valuable learning and social experience for young athletes, travel sports provide a higher level of competition than participants might find locally. Children involved in youth travel sports also have more frequent opportunities to compete.

Parents of young athletes should consider the pros and cons of travel sports. Participation involves a significant investment of time, energy and money.


  • Travel sports events offer social benefits for athletes and their families
  • Opportunity to learn skills and understanding of the sport beyond what school and local recreation leagues provide
  • Increase in athlete’s self-esteem and confidence level, socially and athletically
  • Camaraderie with fellow travel sports participants and bonding time with family


  • Expense of participation including registration fees, lodging, meals, equipment, camps, private coaching
  • Performance pressure and anxiety – being part of an elite team brings higher expectations for the athlete 
  • Increased risk of injury – concussions, repetitive motion/overuse injuries, torn ligaments, heatstroke and broken bones, as well as accidents while traveling to and from events

Travel ball and injuries

According to the National SAFE KIDS Campaign and the American Academy of Pediatrics, more than 3.5 million injuries requiring medical treatment occur annually in youth sports.  Because participation in youth travel sports can increase the likelihood of overuse injuries, it is important to stay focused on prevention. 

At Sadler Sports Insurance, we track the injuries for many of our sports programs. As a general rule, our injury report statistics indicate a higher number of injuries during games versus practice and a higher incidence of injuries as age and skill levels increase.

The American Orthopaedic Society for Sports Medicine (AOSSM) and the National Council of Youth Sports (NCYS) have partnered to help prevent youth sports injuries by creating the STOP (Sports Trauma and Overuse Prevention) Sports Injuries program. Learn more about sports specific injuries here. 

Personal experience with travel soccer

As a parent with two daughters who played travel soccer for SC United FC, it was a very positive experience. I found that the organization was well managed and hired excellent coaches with the safety and well being of my daughters at heart. The association had excellent contractual transfer protection through waiver/release, concussion risk management, and child abuse risk management.

Both my wife and I as well as my daughters were able to form lifelong bonds with the other participants. Now that my youngest daughter has aged out and gone to college, I find myself missing the travel soccer experience.

Travel ball insurance

As experts in youth sports association insurance, Sadler Sports & Recreation Insurance recognizes the risks travel sports organizations face. We provide many different insurance programs for travel ball in almost all sports with our instant online quote / pay / print and best in industry risk management resources to prevent the injury or lawsuits from ever becoming an insurance claim.

Almost all travel teams need the following insurance policies to protect the organization, directors, officers, coaches, volunteers, and athletic participants:


General Liability

Directors & Officers Liability





Youth Sports Misconduct Extends To Social Media

And includes cyberbullying

The excitement of a new school year brings enthusiasm for the beginning of many youth sports seasons. As competitions get underway, coaches, activity directors and athletic staff also may become aware of instances of bullying and cyberbullying.

Children’s sports team coaches and athletic staff may be surprised to learn that the fundamentals of sportsmanship now extend to participants’ online behavior.

In the past, emphasis has been on exercising good sportsmanship on the playing field or court. Today, participants can endanger themselves or their organization with sports misconduct while online.

Examples of cyberbullying violations

It is a violation of Safe Sport risk management programs if a staff member knows or should have known of bullying behavior, but takes no action to intervene. Athletic staff need training to recognize, address and prevent such behavior.

Youth sports misconduct includes using electronic communication against someone to:

  • Harass
  • Frighten
  • Intimidate
  • Humiliate
  • Threaten
  • Socially isolate

Prohibited cyberbullying behavior also includes attempts to diminish or exclude another participant physically, emotionally or sexually.

According to the most common places where cyberbullying occurs are:

  • Social Media, such as Facebook, Twitter, Instagram, Snapchat, and Tik Tok
  • Text messaging and messaging apps on mobile or tablet devices
  • Instant messaging, direct messaging, and online chatting over the internet
  • Online forums, chat rooms, and message boards, such as Reddit
  • Email
  • Online gaming communities

State laws address cyberbullying

While there is no Federal law that specifically applies to cyberbullying, individual states have laws to protect people from bullying. Click here to see your state’s laws.

Often, it is not the staff, but other participants – such as parents or guardians – who perpetrate bullying. School sports and activity programs need to be aware that good sportsmanship applies, whether in the sport or activity itself, or online.

It is important to note that bullying does not include group or team behaviors to encourage a culture of team unity and/or harder training effort. To learn more about what constitutes bullying, see the Sadler Child Abuse Protection Program.

A participant or parent/guardian who participates in any act of bullying should be subject to appropriate disciplinary action including but not limited to suspension, permanent ban, and referral to law enforcement authorities.

League organizers, sports complex managers, board members, coaches, athletes, umpires and performers involved in youth sports face unique risks.

Types of cyberbullying lawsuits

As the ease of digital communication evolves, an environment conducive to cyberbullying flourishes. A single inappropriate post or action can put you and your organization at risk. At any moment, an accusation of negligence, abuse, neglect or misconduct can be alleged, along with a lawsuit alleging bodily injury, emotional distress, personal injury, or failure to follow your own rules and bylaws if you don’t take action to address a prohibited activity.

Protect Yourself

The best way to protect yourself is to formally adopt and implement a Child Abuse Protection Plan such as the one that we have customized for our clients. In addition, you should protect yourself and your organization with the purchase of both General Liability and Directors & Officers Liability insurance. Call Sadler Sports & Recreation Insurance at (800) 622-7370 to learn more or click on “get quote” in the top navigation bar above to find the custom program which best fits your needs.


COVID-19 and Return-to-Play Webinar

Sadler Sports Insurance and Go4Ellis Webinar Recording

Sadler Sports Insurance partnered with Go4Ellis (on demand per diem access to athletic trainers) to produce a fantastic webinar on COVID-19 and return to sports. It was very well received by the live audience. Many of the participants said they received real value for the first time in the form of an actionable return to sports plan.

In the webinar, John Sadler covers the major COVID-19 issues to be considered:

  • Liability risk for transmission
  • Difficulty in proving a case
  • Legal defenses that are available
  • COVID-19 waiver/release
  • COVID-19 warning signage
  • Will General Liability cover a transmission lawsuit?

Coronavirus protocol in sports organizationsEllis Mair, the chief medical officer for Go4Ellis, presented the role that an athletic trainer can provide as you factor the COVID-19 risks into planning and implementation of your events. Athletic trainers are not only experts in sports injuries, but also in dealing with diseases such as COVID-19. Their ability to be your COVID Coordinator in executing the safest events possible could be immeasurable.

Below is the Zoom meeting link to the the previously-recorded webinar:

Outline of Topics Covered

COVID-19 Risk Assessment



Follow the Lead of Authority Sources

Risk Identification Checklist

  • Sport
  • Age Group
  • Event Type
  • Expected Attendance
  • Location
  • Local or Interstate

Insurance and Liability

  • Legal Theories of Recovery for COVID-19 Transmission
  • Elements Of COVID-19 Negligence Claim
  • Legal Risk Compared with Child Abuse or Concussions
  • Does General Liability Cover COVID-19 Transmission Lawsuits?
  • COVID-19 Waiver/Release
  • COVID-19 Warning Signage
  • Other Legal Defenses
  • Homeowners Liability and Personal Umbrella

How Hiring an Athletic Trainer helps Sports Organizations Execute Mitigation Strategies and Support Event Operators

  • COVID Coordinator
  • Pre-event Communication
  • PPE
  • Temperature Screening
  • Monitoring
  • State / Local Compliance Documentation
  • Participant Evaluation And Response



Dogs, Disabilities, and Discrimination at the Sports Facility

People with disabilities frequently use sports facilities

Disabled patrons use sports facilities and have the same rights to use them under the law as able-bodied patrons. But questions may arise from facility staff when a patron uses a service animal. Staff may have concerns over discrimination policies with regard to animals or if animals may pose a hazard to other patrons.

Every facility should train their staff on the balancing act between these potentially conflicting interests.

Avoid liability by being discrimination and service-dog savvy

It’s important to determine whether the sports facility or center in question is, in fact, a place of public accommodation. The answer is almost always yes. Places of public accommodation are subject to the Americans with Disabilities Act (ADA). It’s vital that sports facility owners and operators know and be in compliance with the anti-discrimination and reasonable accommodation laws at the federal, state, and city levels.

 Legal obligations and boundaries

Allowing persons with disabilities the same opportunities as others to partake in everyday life is the primary purpose of anti-discrimination laws. In the case of service animals, knowing what to do and what not to do in potentially discriminatory situations will help to significantly reduce the risk of liability.

Service animals are, by law, allowed in places of public accommodation. They must be specifically trained with a set of skills designed to aid a classified disability under the ADA. Animals intended for emotional do not qualify. Facility owners are not legally obligated to let a comfort or emotional support dog accompany a disabled individual. Such animals may be disallowed without fear of liability or lawful obligation.

To determine whether the animal is specifically trained for service, ask if a disability requires an accompanying animal and if so, ask what tasks the animal is specifically qualified to do? Tasks typically questions of discrimination service animalsare help with stability or navigation, assistance with seizures and providing allergen or sound warnings.

However, when approaching the issue, be sure to exercise caution. Questions about the individual’s disability, whether or not the animal is certified to help with that disability or insisting that the animal exhibit proof of its disability training are all considered discrimination. 

The rights of a service dog

Most city laws state that the dog needs to be leashed or harnessed, in control and supervised by the dog’s owner. The ADA does not classify service animals as pets, and grants them access to places of public accommodation even where pets are not allowed.

Furthermore, there is no federal, state or municipal law stating that the needs of a service animal must be accommodated. Supplying the animal with water or food is not required. Should the animal pose any americans with disabilities act discriminationthreats to the safety of the patrons of a sporting event or place of public accommodation, the animal should not be allowed on the premises. 

Reducing liability

Facility owners and their employees must be up to date and properly educated on discrimination laws. in order to best protect themselves from a complaint. Remember that wherever the public is permitted, service animals are, too. And significant liabilities and fines can result from a discrimination dispute.

All individuals with disabilities have protection under federal law. That level of protection may increase further at the state and city levels. A person can receive remedies under the ADA for injunctive relief, monetary damages, and even punitive damages. And take into consideration the effects of dispute on the facility’s image and reputation.

Sports facilities must carry Directors & Officers Liability Insurance

A Directors & Officers Liability policy (D&O) should be carried by all sports facilities. D&O policies may cover certain violations of the ADA and similar laws. The coverage would consist of legal defense costs and monetary damages. It would not pay for the expense of the public accommodation to bring the facility up to code. Contact Sadler Sports Insurance if you would like to discuss further or to receive a D&O proposal.

Source: Carla Varriale; Havkins, Rosenfield, Ritzert & Varriale. “Going to the Dogs: Keeping Your Liability on a Leash.”; Sports Facilities and the Law; September-October 2019.

Leading Causes of Sports Lawsuits: Improper Supervision & Instruction

Supervision: It’s more than just keeping an eye on things.

The need for amateur sports administrators to understand their legal responsibilities with regard to supervision and instruction can’t be stressed enough. In the arena of amateur sports, lack of supervision is the most common cause of action in lawsuits. Injuries resulting in these types of lawsuits are typically avoidable if proper supervision occurs. Below are the three most important reasons to stress supervision as a way to avoid legal liability.

  1. Injured people suffer and miss time away from playing the game, school, or work.
  2. If a serious injury occurs, negative media attention can have a significant impact on the success of your sports program.
  3. The loss record of your insurance program must be protected against serious losses to prevent future rate increases.

Supervision in the context of amateur sports is defined as overseeing the activities of the sports program. This includes recognizing potential hazards, implementing risk management measures, and monitoring for compliance. For our purposes, we break supervision down into two categories: general supervision and specific supervision.

General Supervision

The responsibility of general supervision falls on your risk management officer and other administrators (such as officers and board members). It is their duty to oversee the big picture of your risk management Instruction in amateur sportsprogram. They do this by instructing, training, and monitoring staff members on how to carry out their own duties of supervision.

Meeting the standard of care

The basic steps required to be taken under general supervision include appointing a risk management officer and adopting a written risk management plan. We offer templates on our risk management page to help you accomplish this task. Also important is selecting suitable staff and monitoring staff performance of their duties. This means screening staff with applications and background checks. Staff training or certification is key. We recommend seeking out a credible organization such the National Alliance for Youth Sports for such training. An integral part of any risk management plan is being able to document everything you’re doing. This certainly holds true for your policies and procedures regarding supervision.

Specific Supervision

Administrators should consider three basic questions regarding supervision.

  • What is the player to coach/trainer ratio?
  • In which area(s) are coaches/trainers trained and certified, if any?
  • Are policies in place regarding supervision, and if so is there accountability regarding current policy?

The liability risk of any sports program can be reduced greatly if the following guidelines regarding supervision are followed:

Rowdiness: Horseplay and roughhousing of participants and those on the sidelines ends in a great number of senseless and avoidable injuries in youth sports. Injuries can range from a player falling/jumping off bleachers to a teen athlete having an accident in the parking lot while showing off. Nonetheless, it is the coach’s responsibility to properly supervise players and keep them safe. Staff should be aware of this, recognize these activities, and put a stop to them using appropriate means. The first step in doing so is having an adequate number of coaches and staff members present and alert. Getting the buy-in from parents is also key to keeping such behavior to a minimum.

Supervisor-to-Participant Ratio: The ability to adequately observe, instruct, supervise and correct only occurs when an appropriate number of staff supervisors are present at an activity. Arrange ahead of time for sufficient team supervision during practices, games and extracurricular activities.

Supervisor Location: The staff supervisor should always be in close proximity to an activity. This means he or she should be able to personally observe, instruct, supervise and correct. This applies to sports activities and non-sports extracurricular activities, i.e. team outings, backyard cookouts, etc. One example of this type of situation is the drowning of a player who attended a team picnic. Another is children causing damage while climbing on a water fountain at an awards banquet.

Participants Size, Age, and Skill: Never mix participants of various sizes, ages, and skill levels. All too often we’ve seen injuries result when a younger team scrimmages an older team outside of age range. The sports organization should be restricting age range categories and prohibiting any play against outside competition if participants fall outside of these categories. Staff members of individual teams should not match players of different skill levels or sizes in dangerous drills. And staff should, of course, never personally injure participants during practice instruction.


Instruction goes hand-in-hand with supervision because the instructor is a supervisor. Many sports organization require formal training for their coaches through organizations such as the National Alliance For Youth Sports. The training covers general topics that are common to all coaches such as the psychological needs of youth and how to respond to injuries as well as a sport specific segment. Such training can also be required by state legislative law and by municipalities as a pre condition of being able to use the fields. Such formal programs may satisfy the legal requirement for instruction training. Again, following the guidelines below greatly reduces the risk of liability.

Sport-specific techniques

Administrators should require coaches to follow best-accepted practices for teaching sport-related techniques. Coaches should receive continuing education on the latest techniques on how to run a practice and how to teach technical skills.

Put particular emphasis on the more hazardous areas of the specific sport. For example, the position of the player’s head during a tackle is a fundamental area of instruction. Likewise, in baseball/softball, it’s critical that athletes are taught the proper method for avoiding a wild pitch or how to slide  into a base.

Review of Safety Rules and Procedures

The governing/sanctioning body or sports organization should require a pre-season a review by administrators and staff of any rule changes. Likewise, a review of rules and policies with players should take place before every season and a review of specific rules prior to every practice and game.


The vast majority of lawsuits filed against clients of Sadler sports and recreation insurance allege lack of supervision and instruction. The alleged negligence is both at the administrator level due to lack of planning/oversight and the staff level as well. In particular, we have seen a number of serious injuries and resulting lawsuits arise from mixing participants of different sizes, ages, and skill levels.

NAYS Presents 16th Annual Youth Sports Congress

Guest post by the National Alliance for Youth Sports*

The National Alliance for Youth Sports is proud to announce the 16th annual Youth Sports Congress scheduled for November 8 to 11 in Orlando, Florida.  Registration is currently underway.

This four-day comprehensive educational experience is developed specifically for youth sports administrators. Registrants will attend the welcome reception, NAYS Congress, Athletic Business Expo and keynote address. They will also have the opportunity to earn or maintain their credentials as a Certified Youth Sports Administrator (CYSA).

The keynote address on day one focuses on professionalism for youth sports administrators. We’ll also be presenting the Excellence in Youth Sports Award, and recognizing the NAYS Volunteer Coach of the Year and the NAYS Youth Sports Parent of the Year.

Other sessions include:

  • Building Your Shield Part 1: Screening and Protecting from Adults Who Bully
  • Building Your Shield Part 2: Emergency, Crisis and Conflict Readiness
  • Developing Character via Youth Sports
  • Coaching the Coaches on Mental Toughness
  • A Roundtable Discussion of Current Youth Sports Issues
  • A Moral Compass Guiding Youth Sports Programs
  • Embracing Youth Sport: Attack the Issues
  • Positioning Yourself as the Leader in Youth Sports – Creating Partnerships that Work!

The keynote speaker will be Charles Duhigg, bestselling author of “The Power of Habit: Why We Do What We Do in Life and Business.” Duhigg is also a New York Times Pulitzer prize-winning investigative reporter. His talk will focus on the science of habit formation in individuals, businesses and societies.

Over 250 exhibitors will be displaying their products at the Athletic Business Expo. NAYS sponsors will be in a separate pavilion where attendees can meet and greet supporters of the NAYS program.

Lafayette’s Restaurant and Bar is hosting the Athletic Business welcome reception. Attendees can connect with one another, exhibitors and speakers while enjoying live music and Southern-inspired dishes.

Register now to be a part of this event. If you have questions please email us at or visit Youth Sports Congress.

* Sadler Sports Insurance and NAYS have been long-term partners for over 20 years. I can personally attest to the high quality of all their programming. We provide an endorsed insurance program for teams/leagues that choose to have their coaches trained by NAYS. We also provide separate coach liability insurance for the trained coaches.
—  John M. Sadler


Most Youth Sports Organizations Don’t Have 501(c)(3) Tax-Exempt Status

Don’t assume yours does

According to Kids Non Profits USA, 75 percent of all youth sports organizations qualify for Internal Revenue Service 501(c)(3) status, but fail to apply for it as required by federal law. Unfortunately, many sports organizations have been under the mistaken belief for many years that they were tax exempt under federal law.

Below are the most common reasons that many sports organizations mistakenly believe that they are 501(c)(3) tax exempt:

  • On their application for a Federal Employer Identification NumbeTax exempt status for sports organizationsr, they indicate that they were a nonprofit and thought that this was all that was required.
  • They received state nonprofit corporation status, but they neglected to apply for federal 501(c)(3) status as a tax exempt organization.
  • The assumed that they were automatically tax exempt as a volunteer-run organization.
  • They assumed that the prior administrators properly applied for tax-exempt status many years ago.

The benefits of 501(c)(3) tax-exempt status are as follows:

  • Exempts the sports organization from paying federal income taxes
  • Allow a federal tax deduction for donors of cash, property, or equipment.

The risk of not properly applying for 501(c)(3) tax exempt status are as follows:

  • Sports organization is responsible for filing and paying federal and state income taxes as a taxable business.
  • The sports organization is subject to federal and state penalties as well as back taxes.
  • Donors may have taken improper tax deductions on their personal tax returns thinking that the sports organization was tax-exempt.

In addition,  the IRS revoked the tax-exempt status of some 250,000 organizations in 2010 for failure to file an annual information return for the three prior years. Such organizations are required to refile for tax-exempt status.

Directors & Officers liability policies may cover certain lawsuits alleging that managerial negligence led to loss of tax-exempt status and resulting damages. However, such insurance should not be relied upon due to common policy exclusions for knowing violation of the law.

Kids Non Profits USA offers a special 501(c)(3) application package starting at $399 (plus an IRS application fee).


Insurance Policies Needed by Sports Organizations

The minimum needed for maximum benefit

Because many sports organizations are run by volunteers, they are often under-insured. Insufficient insurance coverage may be a by-product of money-saving efforts or simply a matter of not understanding the risks of exposure to the athletes, coaches, staff and volunteers, and board members

Below is a list of the most important insurance policies that may be needed by community-based sports organizations such as teams, leagues, and municipal recreation departments.
  1. Accident: Pays medical bills on behalf of injured participants such as players and staff.
  2.  General Liability: responds to lawsuits arising from bodily injury, property damage, personal/advertising injury.
  3. Directors & Officers Liability (AKA Trustees Errors & Omissions for municipal recreation departments): Responds to certain lawsuitSports orginizationss not covered by General Liability such as discrimination, wrongful suspension or termination, failure to follow your own rules or bylaws, and violation of rights of others under state, federal, or constitutional law.
  4. Property/Equipment: Covers your buildings, equipment, and contents against loss due to fire, vandalism, theft, etc.
  5. Crime: Covers employee or volunteer embezzlement of funds or theft of property; forgery or alteration of checks by outsiders, and theft of money and securities by outsiders.
  6. Workers’ Compensation: May be required by state law if three or more employees and pays benefits to injured workers for “on the job” injuries including medical bills, lost wages, disability lump sums, disfigurement lump sums, and death benefits.
  7. Business Auto: Covers liability and physical damage to owned, non owned, and hired autos.
  8. Consult with your insurance agent about other types of policies such as Liquor Liability, Cyber Liability, Media, etc.

We provide more detailed information on each of these policy types and insider tips on purchasing insurance in our article, 7 Critical Mistakes to Avoid When Buying Sports Insurance. If you have questions or want assistance in deciding which policies your organization needs, call us at (800) 622-7370.

Copyright 2002-20014, Sadler & Company, Inc.

Employment Practices Liability

Understanding risks as an employer

Employment Practices Liability insurance (EPLI) is an important insurance policy for sports and recreation organizations to cover expensive claims. This policy is usually purchased either in combination with a Directors & Officers Liability policy or can be purchased on a standalone basis.

What’s covered

Employment Practices Liability insurance covers liabilities that can out of the employer – employee relationship. The primary types of covered liabilities include wrongful discipline or termination, discrimination, and sexual harassment. The better coverage forms typically Sports Employment Practice Insurancecover a number of other workplace liabilities that are created by state and federal statutes and case law.

Below are samples of the types of employment offenses that are covered by one of the broader forms on the marketplace through Chubb:

  • Breach Of Employment Contract can refer to an oral, written, or implied contract, including policy obligations listed in employee handbooks, manuals, etc.
  • Employee Discrimination is any violation of employment discrimination laws including wrongful termination, demotion, denial of tenure, refusal to hire, and refusal to promote based on person’s race, religion, creed, national origin, disability, sex, HIV status, sexual orientation or any other status protected by local, state, or federal  or common law.
  • Employment Harassment includes sexual harassment, unwelcome sexual advances, or requests for sexual favors as a condition of employment, basis for employment decisions, to create an intimidating and hostile work environment. In addition, non-sexual workplace harassment that creates an intimidating and hostile work environment.
  • Retaliation against an employee for exercising rights under law, refusing to violate law, or disclosing or threatening to disclose a violation of law.
  • Workplace Tort includes employment-related defamation, invasion of privacy, negligent evaluation, wrongful discipline, retention, supervision, hiring, misrepresentation, infliction of emotional distress/mental anguish/humiliation, failure to consistently enforce corporate policies and procedures.
  • Wrongful Employment Decision unsubstantiated demotion, denial of tenure, or failure to promote.
  • Wrongful Termination unsubstantiated termination, dismissal, discharge, or constructive termination.

 Third-party Discrimination/third-party liability

Many of the modern policy forms break out an optional coverage for third-party discrimination or third-party liability. A third party is often defined as someone other than an employee, which can be a customer, vendor, service provider, or other business invitee of the insured. In order to trigger coverage for third-party claims alleging discrimination  or sexual harassment, this coverage option must be triggered.

Common EPLI Policy Exclusions for Liability Or Benefits Arising Out Of:

  • Employment Retirement Income Security Act (ERISA)
  • Consolidated Omnibus Budget Reconciliation Act (COBRA)
  • Occupational Safety & Health Laws (OSHA)
  • Fair Labor Standards Act
  • National Labor Relations Act
  • Benefits under Workers’ Compensation, Unemployment Insurance, Disability Insurance or similar local, state, federal, or common law benefit laws
  • Racketeer Influenced And Corrupt Organizations Act (RICO)
  • Sherman Anti-Trust Act or similar laws
  • Punitive or treble damages
  • Intentional or criminal acts
  • Assumption of contractual liability (ex: indemnification / hold harmless provisions in PEO or employee leasing contracts)
  • Costs to modify building under Americans With Disabilities Act
  • Employee benefit stock options
  • Any employment practices wrongful acts that occurred prior to any “retro date” or “pending or prior date”
  • Prior employment practices claims subject to any notice given in any application for coverage

Important EPLI Underwriting Considerations

Some important underwriting considerations for acceptability of a risk or for pricing discounts include recent terminations, turnover rate, layoffs, mergers/acquisitions, salary ranges, incident and loss history, and risk management practices that have been implemented including the existence of an employee handbook.

Contact Sadler Sports Insurance at 800-7622-7370 if you are interested in getting a quote for this important coverage. We have existing programs for local sports and recreation organizations where Employment Practices Liability can be purchased in combination with a Directors & Officers Liability policy for as little as $300.

Directors & Officers Liability (D&O) Insurance

Sports and recreation organizations face common lawsuit exposures that require Directors & Officers Liability insurance

Sports Insurance policyOne of the most common misconceptions is that a Directors & Officers Liability policy covers directors and officers against all types of lawsuits. The fact is Directors & Officers Liability insurance protects the insured organization, its directors, officers, employees, and volunteers against lawsuits based on claims of financial mismanagement, discrimination, violation of rights of others under state, federal, and constitutional law, and failure to follow rules or bylaws when making an administrative decision.

These types of lawsuits are not covered under a General Liability policy, which only responds to lawsuits alleging bodily, property, advertising, or personal injury Likewise, a Directors & Officers Liability policy specifically excludes coverage for the types of lawsuits  covered by a General Liability policy.

Claims Made Coverage Form Challenges

Directors & Officers Liability is written on a “claims made” form instead of an “occurrence” form. Under the claims made form, coverage problems can arise in the event that the policy is cancelled, non-renewed, or transferred to a new carrier. The insurance agent must provide guidance on how to handle these situations, including advice on retro dates, pending or prior dates, and extended reporting periods.

Non-profit vs. for profit organizations

Directors & Officers Liability policies for non-profit sports organizations are relatively inexpensive and typically include broad coverage terms. Minimum premiums may start out at $300 for smaller local organizations and $1500 for larger associations or sanctioning bodies. Of course, pricing will increase with higher revenues, weak financial statements, high-risk nature of operations, if members are to be included under a group program, or if there is a past history of losses. On the other hand, the premiums for profit sports organizations tend to be more expensive with less favorable coverage terms.

Favorable D&O coverage provisions:
  • The insurance carrier must “Pay On Behalf Of” instead of “Indemnify”.
  • Broad definition of “Wrongful Act” as “any” error, misstatement, misleading statement, act, omission, neglect, breach of duty, etc. instead of “negligent” error, misstatement….
  • Defense is included outside of the limits of coverage
  • Broad definition of insured persons to include the entity and its directors, officers, trustees, managers, employees, volunteers, committee persons, etc.
  • Addition of coverage for “personal injury wrongful act” and “publishers wrongful act”.
  • Loss prevention and consultation services.
Common D&O policy exclusions:
  • Deliberately fraudulent act or willful violation of statute or regulation
  • The gaining of any in fact profit or advantage to which the insured person was not legally entitled
  • Any wrongful acts that occurred prior to any “retro date” or “pending or prior date”
  • Prior claims subject to any notice given in any application for coverage
  • Violation of certain securities laws such as Securities Act of 1933
  • Bodily injury or property damage (should be covered under General Liability)
  • Release of pollutants
  • ERISA violations (should be covered under Fiduciary Liability)
  • Employment related wrongful acts (should be covered under Employment Practices Liability)
  • Punitive or treble damages exclusions
  • Insured vs. Insured exclusions are common to provide a disincentive for internal lawsuits between insured persons. Some insurance carriers will eliminate or modify this exclusion.
  • Breach of contract (should try to negotiate removal of exclusion or defense only)
  • Liability assumed under contract
  • Claims arising from serving on board of any outside entities
  • Non-monetary damages such as injunctive relief
Problem D&O exclusions for sports organizations to avoid:
  • Breach Of Contract:: If this exclusion is on the policy, attempt to remove it or amend it so that it does not apply to legal defense for breach of contract. Some lawsuits filed against sports organizations for failure to follow their own rules or bylaws are framed as breach of contract with members.
  • Antitrust Or Restraint Of Trade: This type of litigation occurs in the sports context when a sports organization implements rules that inhibit participation in other sports organizations.
  • Certification, Accreditation, and Peer Review: Many sports organization have training programs where coaches, umpires, or instructors are certified or accredited. Even if this exclusion is not on the policy, a strong argument could be made for a Professional Liability policy to cover this exposure.
  • Non-Monetary Relief or Injunctive Relief Claims: If this exclusion is on the policy, an attempt should be made to amend it so that coverage applies for legal defense. Many lawsuits arise in the sports context when a player is disqualified from participation in a tournament and such player files an action with a judge for injunctive relief to have the tournament postponed until a determination can be made.

Directors & Officers Liability Insurance can include coverage for Employment Practices Liability (EPLI) or EPLI can purchased as a separate component coverage depending on how the policy form is written. EPLI will be discussed in a subsequent blog.

Sadler Sports & Recreation Insurance provides an existing D&O program for local community based sports and recreation organizations for as little as $300 and we can customize a policy for sanctioning/governing associations which will of course be more expensive.