Archive for the ‘Risk Management’ Category

Transfer the Risk of Loss to Others

Don’t bear the responsibility that belongs to others

There are two common situations in which local sports organizations need to be careful to protect themselves from assuming the risk of loss (Ex: bodily injury to a spectator or player and property damage liability) that should fall upon the other party. These situations occur with field/facility owners from whom practice and playing fields are leased and with vendors who provide critical services to the sports organization.

When the negligence of these parties is the cause of injury to a third party, you want them and their insurance carriers to be responsible for providing legal defense and paying any damages. One of the best ways to achieve this result is to make sure that you have a contract in force with them that specifies this outcome. Of course, this simply requires a review of  your lease and vendor services agreements and occasional negotiation of provisions regarding insurance requirements and hold harmless/indemnification.

Below are two articles that provide clear instructions on how to deal with these two situations:

Before You Sign the Sports Facility Lease Agreement

Collect Certificates of Insurance from Your Vendors

Medical Emergencies in Youth Sports

CPR and first aid training for coaches is critical

Sadler Sports and Recreation Insurance has always been a strong advocate of youth sports coaches and volunteers receiving first aid and emergency training. Injuries and medical emergencies can occur anywhere, at anytime to anyone, especially in a sporting environment. Coaches and other adults in attendance during practices and play have to be able to respond in such cases. Unfortunately, only 40 percent of youth coaches have any safety training, according to a 2012 SafeKids Worldwide survey.

There’s really no excuse for such lack of training because certification classes in first aid and CPR are offered in every community for free or very little cost. It’s the responsibility of the sports organization and local community to ensure that coaches and volunteers have access to the training needed to respond appropriately to an injury or life-threatening event.

Empowering your volunteers

In particular, the education of volunteers in safety procedures strengthens the sports program. Volunteers offer their time and energy in so many capacities. They should be given the tools they need to be an even greater help, which means safety training or recertification at no cost to them. And it’s important to remember that coaches and volunteers serve as safety role models for the youth with whom they’re working. Older athletes should be encouraged to register for CPR and first aid certification courses, as well.

No matter what sport you’re involved with, the unexpected can occur. Here are a few examples of emergency situations where immediate administration of first-aid made all the difference to the injured person.

  • An Alabama high school football player collapsed during the first practice of the season. Coaches and the athletic trainer sprang into action, quickly determining a case of cardiac arrest after seeing no signs of concussion, heat stroke or dehydration. The trainer used the school’s AED while waiting for EMTs to arrive on the scene. The teen survived, thanks to the safety training his coaches had received.
  • An Oregon varsity high school basketball game was unexpectedly interrupted when an official collapsed on the court. Quick thinking staff, students and medical professionals in the stands rushed to his aid, administering CPR until an ambulance arrived.
  • An 8-year-old youth baseball player collapsed after being hit in the chest by a batted ball. It was his good fortune that two off-duty paramedics who were in the stands were able to administer CPR until paramedics arrived and transported him to the hospital.

You can’t count on there being someone nearby who will know what to do in a medical emergency. Whether the injured person is one of the athletes, a trainer, an official or a fan in the stands, the coaches are who people will look to for help in an emergency.

Getting the necessary training

The American Red Cross offers CPR/AED training as well as specific first aid, health and safety training for sports coaches. Because CPR techniques and use of AEDs on children and adults differ, it’s important that coaches receive training for medical assistance for both age groups

The National Alliance for Youth Sports encourages all volunteer coaches get CPR training. Their website offers member coaches access to a first aid and CPR section full of safety information, including how to develop an emergency action plan. NAYS also offers free concussion training for coaches and volunteers.

Special Events May Require Special Coverage

Safety should be priority No. 1

Many for profit and not for profit organizations hold special events throughout the year. These can be tournaments, banquets, marathons, fundraisers, award ceremonies or simply family days that include fun activities and entertainment. A lot of planning and organization are required to ensure these events are successful. One element of the planning stage that should never be overlooked is determining whether your insurance program includes the coverage needed for a safe event for everyone involved – hosts, participants, volunteers, vendors and guests.

There are risks involved in hosting and managing special events that may require either added short-term or annual coverage. Beyond checking with your agent as to whether your event is adequately protected, below is a list of areas that require particular attention during the planning stages.

Vendors

Vendors can include caterers, tent and equipment rentals, concessions, security, and parking attendants. It’s important to research your vendors well because poor service or a mishap on their part can spoil an entire event – think of the potential consequences of a collapsed tent or food poisoning. It’s critical that each of your vendors provide you with a valid certificate of insurance evidencing General Liability with a limit of at least $1 million each occurrence and that they can add your organization as an additional insured on their policy.

Venues

It’s not unheard of for the actual venue of an event to be a factor that causes an accident or injury claim. Stages can collapse, fire exits get blocked, and severe weather can trigger the need for fast evacuations. The more knowledge you have about the number of people attending the event, the electrical equipment needed, and potential for severe weather, the better prepared you will be. For indoor events, make sure you know the emergency protocols of the building, which includes knowing where all the fire extinguishers, exits and stairwells are located. For outdoor events, be sure the terrain and any light/sound rigging are properly installed. Monitor the weather in the days leading up to the event as well as during the event – storms can pop up unexpectedly with disastrous results. There are weather apps for smartphone that can alert you to severe weather watches and warnings.

Emergency Planning

Every event should have a unique emergency plan which all staff and volunteers receive and sign that they have read it. The emergency plan should include who has the authority to shut the event down or ask a vendor to vacate. Sudden storms, a shooter in the area, or a vendor with a lapsed permit are only a few examples of when someone may need to make an on-the-spot decision.  The emergency plan should also include a protocol for announcing a closing or changes in the event programming. It goes without saying that all event staff and volunteers should be familiar with the event emergency plan, to include medical emergencies, lost children, crime and severe weather.

Security

Security often is something that tends to get “overlooked” because it doesn’t generate income. However, security should be considered an investment that reduces your risk of liability, which is just as good or even better than income. Below are some security tips that can make for a much safer event for everyone involved.

  • Volunteers are a great resource, but don’t use them for security enforcement purposes, such as dealing with unruly people, enforcing parking or alcohol regulations, or providing first aid. It’s best to have trained medical and law enforcement professionals handling these duties.
  • Using teachers, senior/varsity athletes and other community leaders is also not a good idea when it comes to maintaining order in the crowd. These temporary-authority figures aren’t always respected by others when they’re out of their element.
  • If you pay for professional security, don’t scrimp. Going with the cheapest security service may not be your wisest decision. Are their employees simply hired staff or trained personnel? Ask what types of sports events and what size crowds can they handle. Ask for examples of situations they managed to control and get references.

Sadler offers Special Event insurance and one of our insurance experts would be happy to help you determine what coverage your event needs. Call us today at (800) 622-7370 or simply request a quick special event insurance quote online now.

The Positive Impact of Concussion Awareness

Reporting and treatment in youth football on the rise

Injury data taken from the county’s largest youth football organization, American Youth Football (AYF) paints a bright picture. The data indicates that recent increased awareness and education of administrators, coaches, parents, and players is resulting in greater concussion identification and more aggressive medical treatment and follow up.

According to claims data from the AYF-endorsed Accident insurance plan, the rise in incidents of concussions to total injuries reported began in 2011. This coincides with the media’s first reports on high profile concussion lawsuits and alarming injury studies. The trend continued in 2012 and 2013.

Percentage of concussions to total injuries:

2005 – 2010       6.7%  average
2011                11.5%
2012                16.4%
2013                16.4%

What the numbers mean

This is concrete evidence that educational awareness and concussion recognition, treatment, removal, and return to play protocols Concussion diagnosisare having a positive impact on protecting youth, according to John Sadler, president of Sadler Sports Insurance. In the past, many concussions were missed or ignored. When concussions were identified, parents tended to self-treat with a wait-and-see approach. Now, many more concussions and potential concussions are being identified with more emergency room visits, diagnostic tests, and follow ups with concussion experts who are critical in helping parents and athletes making return-to-play decisions.

Education is critical

We believe and statistics prove that the more you know about concussions, the better prepared you are to deal with them. We encourage you to read our other articles on concussions, which include information on American Youth Football’s concussion risk management initiatives.

Electronic Signatures on Waiver and Release Forms

Clients ask if they work as well as paper waiver/release forms

Clients often ask if electronic waiver/release forms will be upheld by a court to the same extent as paper waiver/release forms? The concern is that a forged signature may more likely on an electronic release or the language is not conspicuous enough.

The answer is that electronic releases are no longer an issue and courts readily uphold them. To the best of my knowledge, no court has ever invalidated a release merely because it was electronic.

As to the issue of forgery, electronic releases are more reliable than paper releases and have the advantage of authentication to match the signer of the web form either by email address, ISP, URL, IP address, and/or by the name on the credit card used for registration.

Court Cases Upholding Electronic Waiver/Release Agreements

Waiver/Release Should Be Conspicuous on the Web Page

The waiver/release language should not be buried or hidden on some obscure part of the web page or written using small font. We suggest a conspicuous header that is bold, in all caps, and/or underlined. An example would be WAIVER/RELEASE OF LIABILITY AND ASSUMPTION OF RISK AGREEMENT. The body of the release should be in a normal-sized font.

Make Sure the Minor Signs the Electronic Waiver/Release

Parental signatures are only upheld in about 10 states at this time. Therefore, for the other 40 states, it is critical that the minor is informed of the risks of participation and provides his/her consent to be subjected to those risks.

A well-drafted understanding of risk section in a waiver/release along with the accompanying name and signature of the minor may be introduced into evidence for an assumption of risk defense in many states. Therefore, always require the minor to sign the electronic release form. It might not be beneficial in all cases but it certainly won’t hurt.

Since the parent is typically the party that completes the online registration form, there could be some argument as to whether or not the parent signed “I Agree” on behalf of the minor.

To combat this, the waiver/release should include language that the parent agrees to explain all risks to the minor, the minor’s personal responsibilities for adhering to the rules, and to get the minor’s consent to be subjected to the risks. And the parent’s section of the release should state “I have read and understand and agree on behalf of myself and my minor child/ward to be bound by the terms of this agreement.”

This can provide additional protection but you should still require the minor to sign a separate “I Agree” box for the understanding of risk section.

Avoid Using a Paper Waiver/Release to Back Up an Electronic Release

Some organizations have electronic registration which includes a waiver/release form. But they worry that the electronic signature won’t be upheld by a court so they also require a paper waiver/release to be signed. This is entirely unnecessary as electronic releases are no longer an issue and readily upheld by the courts.

Having a back-up waiver/release can cause a novation, which may actually invalidate both releases. Novation is a legal term which means to substitute one contract in the place of another.

The bottom line: avoid a back up waiver/release in all circumstances.

Electronic Waiver/Release Forms Must Still Avoid Normal Pitfalls

Our article Are Waiver/Releases Worth the Paper on Which They Are Written? provides a list of pitfalls that should be avoided within a well-drafted waiver/release.

Of course, a custom waiver/release drafted by an attorney to be sport- and state-specific is always the best course of action. However, we provide the following sample waiver/release agreements that incorporate many of the principles discussed in this article:


Source: James H. Moss, J.D., Recreation Law 

Controlling the Non-owned Auto Exposure in Sports

Coverage for a serious risk

It’s a must for most sports and recreation organizations to carry Non-owned and Hired Auto Liability insurance, which can be a stand alone policy or part of the General Liability policy. Very few sports administrators understand the importance of this coverage and what they should be doing to protect their insurance carrier from ever having to pay a claim.

A non-owned auto is one that is not owned by the sports or recreation organization, but is instead owned by an employee or volunteer or borrowed from an organization such as a church. If a non-owned vehicle is involved in an accident while on association business, the following parties can normally be sued: the vehicle owner, the driver, and any organization for whose purpose the errand is being run. In other words, the sports organization can be sued for their vicarious liability of their staff member.

Its important to note that Non-owned Auto Liability insurance does not cover the driver or damage to the vehicle. It only covers the association that is the named insured on the policy. The driver will have to rely on his or her own Personal Auto Insurance olicy to provide liability and physical damage protection.

I came across some excellent loss control material from Philadelphia Insurance Company on the topic of controlling the Non-owned Auto Liability risk in the sports and recreation context. This exposure represents an infrequent but high severity risk where damages can easily exceed $1 million. The insurance carriers that insure sports and recreation organizations are concerned about this exposure because it’s difficult to collect the proper premium for a low frequency/high severity risk. Sports organizations need to take this risk very seriously and implement the recommended controls.

Here are some links that you will want to check out:

Case studies on actual Non-owned Auto Liability losses in the non profit association context where damages exceeded $1 million

Personal vehicle usage precautions

Driver eligibility criteria

Driver training and motivation

Source: Philadelphia Insurance Company, Hired And Non-owned Automobiles, Large Loss Lessons Learned

Spectator Injuries at the Ballpark

Does the “Baseball Rule” need to be revisited?

Spectators and baseball stadium employees occasionally suffer injuries from home run balls and shattered bats flying into the stands. However, foul balls were the most frequent cause of the 1,750 spectator injuries that occurred last year in major league baseball, according to Elias Sports Bureau.  That number translates to about two injuries for every three games. That’s more than the 1535 occurrences of batters being hit by pitches in the 2013 season.

What’s worse is the rising trend in foul ball injuries. Contributing to the increase in incidents are seats in the new and renovated ballparks being seven percent closer to the field, stronger players, and spectators who are increasingly distracted by smart phones and the flashing messages and graphics on enormous electronic scoreboards.

Hard-hitting facts

Fans have almost no time to respond to foul balls driving into the stands, sometimes at more than 100 mph. A ball traveling at 80 mph is traveling 117 feet per second. Spectators sitting 150 feet from home plate have only a second to dodge the missile.

In response to the 2002 death of a fan by a flying puck, the National Hockey League required netting behind the goal and taller Plexiglas shields over the side boards. Major League Baseball has done almost nothing to reduce such risks and maintains that individual teams are responsible for the safety of spectators. Following the death of a minor league first-base coach in 2007 after being hit by a line drive into foul territory, it was mandated that all base coaches must wear helmets.

The “Baseball Rule” culture

The courts are apparently paying attention:  judges hearing appeals in Georgia and Idaho this year rejected arguments invoking the “Baseball Rule.” That’s a long-standing principle that absolves stadium owners and teams from liability as long as the spectators in the seats behind home plate are protected by netting.

MLB teams are responsible for their stadium backstop designs, display of warning signs and following local safety ordinances. Injuries this year took place in seating in field level and 2nd-tier seats, as well as the higher sections that are typical landing grounds for home run balls.

Source: David Glovin, bloomberg.com, 09 Sept. 2014.

Sexual Abuse/Molestation Insurance for Sports Organizations

The risks organizations face and the preconditions for coverage

Child Abuse in Youth SportsSexual abuse and molestation is, unfortunately, a major topic of conversation within youth sports insurance in the past decade.  The sports insurance carriers that write General Liability have been decimated with a number of large settlements and adverse jury verdicts.

As a result, most carriers are not willing to extend coverage for abuse/molestation unless risk management controls are in place.  In other cases, the coverage is only available by tapping into custom programs for larger governing and sanctioning bodies that have significant negotiating power.

Coverage for abuse/molestation is important because all directors and officers will be sued along with the alleged abuser.  The directors and officers will be sued for failure to screen out staff with criminal backgrounds, failure to respond to an allegation, and failure to implement policies and procedures such as the use of a “buddy system” and prohibition of overnight sleepovers.

As a precondition of coverage, many insurance carriers will require mandatory background checks on all staff with access to youth, as well as the adoption of a risk management awareness program.

We have more detailed information on the various types of background checks and the strengths and weaknesses of each, as well as a free and simplified Abuse/Molestation Protection Program on our risk management page.

Crime Insurance for Sports & Recreation Organizations

Employee/volunteer theft are more prevalent than many realize

Sports and recreation organizations can have significant assets at risk from the traditional employee or volunteer embezzlement and the modern perils of electronic fraud. Most sports organizations are not properly insured for these exposures and don’t have adequate risk management controls in place.

The Commercial Crime policy form (ISO CR 00 20 05 06 and CR 00 21 05 06) offers the following coverage parts that may be individually purchased:

Employee Dishonesty Provides coverage for employee theft of money, securities, or other property such as equipment. Employees are defined as regular employees, temporary workers, leased workers, trustees of employee benefit plans, interns, managers, directors, or trustees.

If applicable, it is critical that sports and recreation organizations request special endorsements to extend coverage to theft from volunteers, non-compensated officers and members of specified committees, specified directors and trustees on committees, partners, LLC members, computer software contractors, agents, brokers, or independent contractors.

It is also important to purchase Employee Dishonesty coverage on a blanket basis that protects against theft from all employees or others in a designated class as opposed to specified employees or others who must be individually named on the policy. Sports and recreation organizations experience a high rate of personnel turnover. It’s not uncommon for an organization to fail to update the list of specified employees.

Forgery and Alternation Provides coverage for forgery or alteration of a check, draft, or promissory note drawn against the insured’s accounts.

Money and Securities Provides coverage for theft, disappearance, or destruction of money and securities from either inside the premises/banking premises or outside the premises. Coverage may also be extended to robbery or safe burglary of other property.

Computer Fraud Provides coverage for financial loss due hacker access effecting a fraudulent transaction. An example of computer fraud occurs when company A sells services to company B. An employee of company B hacks into the computer of company A and changes the bank routing and account numbers. The next time a payment is made foElectronic crimer services, the funds are fraudulently transferred to the employee instead of company A. According to a 2008 survey by Computer Security Institute, the average financial loss due to computer fraud was $289,000.

Electronic Funds Transfer Fraud Provides coverage for financial loss due to a hacker access to a financial institution, accessing an online account, and circumventing normal online authentication controls to affect a fraudulent wire transfer. An example of this type of fraud occurs when a hacker gains bank account and password information by planting a Trojan virus in an email attachment sent to a company bookkeeper. When the attachment is opened, a keyword logger is launched that secretly obtains account and password information. The hacker accesses the online banking system and completes a fraudulent electronic wire transfer. According to a 2008 survey by Computer Security Institute, the average financial loss due to funds transfer fraud was $500,000.

Money Orders and Counterfeiting Provides coverage due to loss by good faith acceptance of money orders that are not honored or counterfeit money.

Traditional Crime Risk Management Controls

Many smaller organizations are not run as serious businesses and as a result don’t have strong risk management controls to protect against employee and volunteer dishonesty. The key to preventing insider dishonesty is separation of duties so that no single person has total control over any one process or audit procedure. Below are recommended controls:

  • Require a countersignature on all checks or on checks over a certain amount.
  • The person who reconciles the bank account should not be authorized to deposit or withdraw funds.
  • If credit cards or debit cards are used, authorized users should not be tasked with reviewing the monthly statements.
  • Keep detailed inventory records of all equipment and require a log to be maintained when equipment is assigned or checked out.
  • Create an audit committee to review all financial records, account statements, and to take an inventory of all equipment.
  • Collect checks instead of cash during fundraisers.

Electronic Crime Risk Management Controls

Pfishing scams, Trojans, key loggers, and similar techniques allow hackers to gain access to online banking transactions and to circumvent standard online authentication controls. Internal controls such as antivirus software, firewalls, and employee training are critical but don’t offer 100 percent protection. Computer Fraud and Electronic Funds Transfer Fraud coverages are strongly recommended.

Get a Quote

Contact Sadler Sports & Recreation Insurance at 800-622-7370 for a Crime Insurance quote. We have an existing Crime Insurance program available for smaller, locally-based organizations for as little as $175, which includes coverage for Employee Dishonesty, Forgery and Alteration, and Theft of Money and Securities. Larger sanctioning and governing bodies will be asked to complete an application that outlines your financial risk management practices and we will be able to provide a proposal within several days in most cases.

Injuries at Gyms and Homes

Thousands suffer in pursuit of fitness

Fitness Instructor Insurance and Health Club Insurance is in high demand due to frequent gym injuries.

According to the U.S. Consumer Product Safety Commission, the following injury statistics occurred in 2009:

  • 1500 emergency room visits resulting from equipment related
    mishaps in gyms
  • 50,000 emergency room visits from home exercise equipment incidents including treadmill falls, exercise ball falls, elastic stretch band hits to face, and dropping free weights on feet.
  • Treadmills are the number one cause of equipment related injuries with 575 occurrences of falling off and tripping
  • Weight machines and free weights caused 224 injuries.
  • Common gym equipment related injuries include broken ankles,fractured arms, fractured legs, and fingertip amputations.

Fitness instructors cite the following reason for gym/exercise related injuries:

  • Inattention due to Ipods, cell phones, and reading
  • Using equipment for the first time without proper instruction
  • Working out too hard, too soon after a period of inactivity.

Source: http://www.msnbc.msn.com/id/35127528/ns/health-fitness/