or Errors & Omissions for sports organizations

Some sports and recreation organizations don’t realize that they have liability exposures that can only be covered by a Professional Liability insurance policy, which is also known as Errors & Omissions insurance. These two terms were once distinguishable, but are now almost interchangeable in the insurance industry. When discussing their impact on sports and recreation organizations, they are considered to be one in the same.

Which policies cover what

A General Liability policy covers certain lawsuits alleging bodily injury and property damage. A Directors & Officers Liability policy covers certain lawsuits alleging managerial negligence. A Professional Liability policy covers certain lawsuits alleging purely economic damages arising out of the performance of member services with no accompanying bodily injury or property damage.

The following are examples of exposures that make a Professional Liability policy beneficial for a sports and recreation organization:

• A player alleges that improper instruction by a coach resulted in the loss of an athletic scholarship or professional sports career.
• A player alleges that mistakes made in his/her recruiting service profile resulted in the loss of an athletic scholarship or professional sports career. Sports organizations that publish player statistics or strengths and weaknesses may have this exposure.
• A member team/league alleges financial losses due to negligent management or financial advice provided by the sanctioning sports organization. This exposure is common when the relationship between the sanctioning body and team/league is that of franchisor-franchisee in a for-profit model.
• Certification or accreditation of an applicant or member is denied or revoked and, as a result, alleges economic damages.

Some General Liability carriers may be willing to add a Professional Liability endorsement for minor Professional Liability exposures for no charge or a small charge. Otherwise, a stand-alone Professional Liability must be purchased. The premium for such a policy will be based on revenues and minimum premiums start in the $1,500 to $2,500 range.

Contact Sadler Sports & Recreation Insurance at 800-622-7370 if you would like to further discuss these exposures for your organization