Over 90% of sports and recreation insurance policies contain at least one fatal coverage flaw. I do not say that to frighten anyone. I say it because in 35+ years of placing and reviewing sports insurance, I have watched too many league presidents, treasurers, board members, and facility owners find the flaw the hard way: after the claim came in, when the policy did not respond the way they had assumed it would.
A fatal flaw is not a typo on the declarations page. It is a missing coverage, a buried exclusion (ex, an exclusion for participant injuries), a low sublimit, or the wrong policy form, and any one of them can leave your organization and its directors, officers, employees, and volunteers paying a six-figure claim out of their own pockets. The good news is that you do not have to become an insurance expert to catch them. You just have to know what to look for.
Here are seven of the most common, and how to check your own policy for each one. For a deeper catalog, see our blog on problem exclusions for sports and recreation organizations.
Fatal Flaw #1: An exclusion for the injuries you most need covered
Some sports liability policies leave your organization without coverage for the one claim you bought the policy to handle: lawsuits arising out of an injury to a participant. It is called the Athletic Participant Exclusion, sometimes the Sports Participant Exclusion, and a participant injury is one of the most common claims in youth sports.
This exclusion is not common, and a program built for sports should not carry it. But it appears often enough, and does enough damage when it does, to belong at the top of this list. The way to confirm it is not hiding in your form is to look for Participant Legal Liability on your policy. That coverage is the evidence that an Athletic Participant Exclusion does not apply. If you cannot find it, ask the question in writing.
Fatal Flaw #2: A Sexual Abuse & Molestation limit that is really no limit at all
This is the exposure no youth organization wants to think about, and the one most likely to end it. Sexual Abuse & Molestation is normally an optional coverage rather than a standard one, so the flaw comes in two forms: the coverage is missing entirely, or it is there at a sublimit so low that a single claim blows right past it. One Sexual Abuse & Molestation claim against a coach settled for $321,000. In claims like these, the board members who never met the accused are routinely named in the lawsuit too, on the theory that they failed to screen or failed to supervise. And that duty is no longer just good practice: the federal Safe Sport Act put abuse prevention and reporting obligations on youth sports organizations nationwide.
Here is the part that reassures a board, and it is important to get right. Carrying this coverage does not mean you are insuring an abuser. Many abuse policies stop covering a specific individual once it is determined that person was the perpetrator, but the organization and the innocent board members and volunteers stay covered. Covering the league never means covering the offender.
Check one thing above all: that Sexual Abuse & Molestation is on the policy at $1M/$2M or higher if available, not missing and not buried under a token sublimit. That limit is what protects the organization and the board members and volunteers most likely to be named when a claim comes.
Fatal Flaw #3: No coverage when a volunteer drives on league business
Ask yourself a simple question: does anyone ever drive on your league’s behalf? To and from a game or practice, to make a deposit, to pick up equipment from the sporting goods store, to haul gear to a tournament? The coverage that responds when a volunteer uses her own car or a rented van on league business is called Non-Owned & Hired Auto liability, and it is usually an optional coverage. That means it is only on your policy if someone added it. “Ignoring Non-Owned & Hired Auto coverage” is one of the common mistakes I warn about, because the day you need it is the day a volunteer is in an accident running a league errand. Every league needs this coverage.
Ask for Non-Owned & Hired Auto by name and confirm it is on your policy.
Fatal Flaw #4: A cap, or an exclusion, on brain injuries
Brain-injury claims are among the most expensive in all of sports. A single high school football head injury settled for $4.4 million. In another case, a player was returned to the field after a concussion with no written medical clearance, took a second hit before the first injury had healed, and that claim settled for $5.8 million. That second story is why every state now has a return-to-play law, and why the CDC’s HEADS UP program trains coaches to hold a player out until the medical clearance is in writing. Now picture those numbers landing on a policy that carries a total brain injury exclusion, or a sublimit that caps concussion claims at a fraction of what they cost.
Some sports policies are written exactly that way. For a contact sport, a $1M limit is a floor, not a ceiling, and a brain-injury exclusion is a flaw you cannot afford to carry. Confirm your policy contains no total brain injury exclusion and no concussion sublimit, and where the coverage is narrow, attempts should be made to negotiate alternatives where available.
Fatal Flaw #5: Coverage that clocks out when the game ends
This one is, in my experience, one of the major coverage flaws, and most boards have never heard of it. If your organization owns its field, or holds a long-term lease that makes you responsible for the premises, your liability does not stop when practice is over. Many policies are written to respond only during scheduled games and practices, which leaves the other twenty hours of the day uninsured.
A claim from years before I joined the firm makes the point. A young trespasser rode a motorcycle onto a field after midnight, hit a chain that had been stretched across a road, and was badly hurt. He sued the field owner under the legal theory of attractive nuisance, the principle that you can be held liable to someone who was never supposed to be on your property in the first place. He won. And remember this: the legal defense costs alone are often greater than the settlement. Paying for that defense is one of the main reasons you carry liability insurance in the first place.
If you own or control your field, confirm your liability coverage applies around the clock, not only during scheduled activities. Sometimes it is built in. Sometimes it takes a special endorsement. Either way, you want to know before the claim, not after.
Fatal Flaw #6: An exclusion that waits for the biggest crowd of the year
Some General Liability policies carry a bleacher-collapse exclusion, and others a broader collapse-of-a-temporary-structure exclusion. Read that twice, because the timing is cruel: bleachers are most often built or expanded on a temporary basis for championships and big events, which is exactly the moment a larger-than-expected crowd is sitting on them.
A bleacher collapse at a sports event injured several spectators and settled for $363,000. That claim paid for one reason: the policy did not contain a bleacher-collapse exclusion. A league whose policy carried that exclusion would have been on its own. If you have bleachers, or you set up temporary seating for your big games, confirm your policy has no bleacher-collapse and no temporary-structure-collapse exclusion.
Fatal Flaw #7: The wrong policy form
This one is quieter than the others, and it is the kind of thing an attorney notices. Sports liability comes in two forms. An occurrence policy covers an injury that happened while the policy was in force, even if the lawsuit does not arrive until years later. A claims-made policy responds only if both the injury and the claim happen while the policy is active.
For a youth organization, that difference can be everything. A child injured this season may not sue until the age of majority (18 in most states), plus another two years for the statute of limitations to run. If you were on a claims-made policy, switched carriers, and never bought tail coverage, the gap can swallow the claim. An occurrence policy is preferred. Check which form you have, and if it is claims-made, ask about tail coverage before you change anything.
What broader looks like
If you ran your policy through those seven and did not like what you found, you are in good company. It is why I have spent my career building sports programs that leave these flaws out. Our coverage is usually broader than what you will find on the open market: we leave out the dangerous exclusions, we add custom enhancements, and we let you buy back the protections that matter most, from Sexual Abuse & Molestation and Non-Owned & Hired Auto to around-the-clock facility coverage, Directors & Officers, Crime, and Equipment. Where a coverage is not included, your written proposal says so in plain language, so you are never guessing. We protect more than 15,700 sports and recreation organizations each year, and the policy is only half of it. The other half is catching the flaw before it catches you.
So do this before your next renewal: download our Sports Organization Insurance Coverage Checklist and run your current policy through it, line by line. If you would rather a specialist do the comparison, you can review our General Liability coverage built for sports and recreation organizations and get an instant quote. The worst that can happen is you will have spent a few minutes learning something new.