Archive for the ‘Sports Camps/Clinics’ Category

Teams/Leagues and Facility Owners: Beware of Low-Quality Sports Insurance

Insurance certificates, brochures, and proposals that can put teams/leagues and their respective directors, officers, employees, and volunteers at financial risk of uncovered lawsuit

Many sports team and league administrators hope or believe that they have adequate protection under their Accident and General Liability policies. They usually place their trust in their local insurance agent – or even a so-called sports insurance specialist. Some that have their insurance provided by their municipal recreation department may rely on their risk manager.

But, how do they know for sure that their insurance adequately protects against some of the most common types of devastating lawsuits?

Many would like to think that their insurance will never be tested. Perhaps they can get by for several years, but eventually something bad will happen.

What are the risks?

We created an article, “Horror Stories About What Can Go Wrong,from claims that were filed by our own clients. Most of their experiences are the expected spectator slips/trips/falls, more serious player injuries resulting in lawsuits, and a number of bizarre and unexpected occurrences. You just never know where risk lurks. Some of the largest sports claims usually arise outside playing the sport itself. We’ve seen large lawsuits arising from the following areas:

  • Falls off parade floats
  • Bleacher collapse
  • Heat illness deaths
  • Charter bus crashes
  • Electrocutions from shorts in light poles
  • Burns when cooking in concession stand
  • League signage blocking view of driver resulting in fatal car crash
  • Large slander/libel lawsuits
  • Fights between umpires and parents

With so much risk abounding within sports and recreation organizations, the quality of insurance must be taken very seriously.

Where the problem begins

Sports and recreation administrators often rely on a simple review of the wrong types of documents. It is a Injury claimmistake for a sports administrator to depend on the review of a certificate of insurance, brochure, or proposal from an insurance agent. None of these documents contain complete details on all policy coverages, definitions, conditions, and exclusions. Dangerous exclusions that take away coverage are often hidden in the fine print.

For example, a certificate of insurance may disclose that a General Liability policy contains a limit of $1 million. However, that same policy may have an exclusion for Athletic Participants. The certificate of insurance will not necessarily disclose the existence of this devastating exclusion, which has a huge bearing on protection.

The  only source for finding the answers on coverage is the actual insurance policies themselves. The problem is that the policies can be exhaustive to review. A typical Accident policy may be 70 pages long, and a typical General Liability policy may be 90 pages long.

Adequate sports insurance checklistProtect yourself with our Insurance Coverage Checklists

We provide the following checklists that can be given to insurance agents for their completion. That way, signing their name to any wrong information on the document could mean that their Errors & Omissions insurance is on the hook.

  •        Sports Organization Insurance Coverage Checklist (Printable PDF)
  •        Recreation Department Insurance Checklist (Printable PDF)

Facility owners at risk when permit holders and facility users carry inadequate coverage

Facility owners such as recreation departments and schools are also at risk when they lease or permit their facilities to facility users. These may be teams, leagues, tournament hosts, camps, instructors, etc. Many facility owners blindly rely on certificates of insurance thinking they tell the whole story.  However, many facility owners are surprised when their own insurance takes the hit instead of the facility user’s insurance they relied upon.

See Insurance for Facility Users of Rec Departments and Schools for more information on how facility owners can protect themselves. Learn how you can offer a referral source so that facility users can quickly and affordably obtain high-quality sports insurance from an industry leading source.

Buyer beware: With just a little effort you can confirm the quality of your sports insurance

With just a little due diligence and use our our checklist tools, teams/leagues and facility owners can verify that they are adequately protected. Your organization and respective directors, officers, employees, and volunteers are counting on you to make the right decision regarding their protection.

If you have questions about the adequacy of your current sports insurance policies, we can provide a no-obligation review. Contact us with your questions.

Excess Accident Insurance

The first line of defense against lawsuits 

Sports Accident insurance pays covered medical expenses of injured participants such as players, coaches, managers, umpires, etc. The coverage is normally excess or secondary, which requires other insurance such as family health insurance to respond first.

How Excess Accident Insurance coordinates with family health insurance

There are three basic scenarios that can arise under excess Accident insurance:

  1. When existing family insurance pays for 100 percent of all medical bills, the excess Accident policy will not make payment for any benefits.
  2. If existing family insurance pays for only 80 percent of all medical bills (due to deductibles or coinsurance provisions), the excess Accident policy will pay for the remaining 20 percent less any deductible or other policy limitations.
  3. If no family insurance exists, the excess Accident policy becomes primary and pays covered benefits less any deductible or other policy limitations.

The existence of Excess Accident insurance on all participants is the first line of defense against lawsuits arising from injuries to sports participants. Much of the incentive for an injured participant or parent to file a lawsuit is removed if either existing family health insurance or the excess Accident policy will guarantee that no out-of-pocket medical bills will be incurred.

Uncovered medical bills = lawsuits looking for deep pocket

Uncovered medical bills will ultimately result in nasty dunning letters and collection phone calls to the responsible party. This usually leads to consultation with an attorney. Of course, the attorney will recommend filing a lawsuit against a deep pocket. That’s the sports organization and its directors, officers, and volunteers.

Why General Liability carriers in the sports niche insist on Excess Accident as the first line of defense

This is why the few General Liability carriers willing to insure sports organizations require Accident insurance as a precondition of coverage. Most General Liability policies include a warranty provision. This means coverage is voided unless a minimum amount of Accident insurance is in force (usually $25,000). For higher-risk sports, some General Liability carriers may require a $100,000 limit.

What if Excess Accident insurance is too expensive?

In these situations, there is really no way around purchasing Accident insurance if it is a requirement of General Liability coverage. However, one solution is to seek a high-deductible Excess Accident policy.  Accident insurance is discounted highly at certain deductible points, such as $500, $1,000, or $2,500. And some General Liability carriers will accept Accident insurance with these higher deductibles.

Different types of deductibles: corridor and disappearing

Most Accident policies have what is called a corridor deductible.  This means the deductible is owed regardless of the existence and contribution of other collectible insurance, such as family health insurance. However, some Accident polices have a disappearing deductible. This means the deductible is satisfied to the extent that other existing insurance has paid medical bills.

Has the Affordable Care Act had an impact on Accident Insurance?

Excess Accident policies pay claims both on an excess and primary basis. If no existing family health insurance is in force, the Excess Accident claim becomes primary. The extent to which the Affordable Care Act increases the percentage of participants covered under family health insurance decreases claim payouts under Excess Accident. However, the high cost of health insurance under the Affordable care act results in higher deductibles and coinsurance. As a result, Excess Accident insurance takes a higher hit than in the past. The two forces tend to balance each other out. However, most of my clients, overall, experienced fewer claims on their Accident loss history. This resulted in premium discounts on some larger experience-rated accounts.

When Youth Sports Teams Move Up One Year

Is it safe in all age categories?

What liability exposure exists for administrators and coaches who allow a younger sports team to play up in an older age category? That question was asked by a visitor to our website:
“I am struggling with a team playing up a year in age U12 Boys moving to U13 Boys in soccer. What are your thoughts? And do you know of any lawsuits. I am on the board and I want to be able to answer any questions.”
 
We invited a guest expert to respond to that for us. Gil Fried is an attorney and professor at the University of New Haven who provided the following answer:
“I am not familiar with any lawsuits from a younger group moving up one age category.  If they moved up several years the proportional difference in skill and size could open a door to liability.  Since the potential for in jury exists at all soccer levels, I would suggest that the children in the 12-year-old group and their parents be sent a letter indicating the potential concern that since younger kids are playing against older kids there could be a chance for injuries. The letter should be clear and allow parents to pull their child if they are concerned without any retribution.”
 

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.

Is Your Team/League Adequately Insured?

Find out with our minimum requirement checklist

How do you know for sure that your team/league sports insurance policies provide the coverage you need to protect against devastating lawsuits? Many local insurance agents and even so called sports insurance specialists are guilty of offering inadequate coverages.

Minimum standards for sports insurance have been set by a sports insurance expert, risk manager, and attorney John Sadler of Sadler Sports and Recreation Insurance. These standards are outlined in two separate checkChecklistlists, one for private teams/leagues that purchase their own insurance one for teams/leagues with insurance provided by a municipal recreation department. Feel free to use our Sports Organization Insurance Checklist and Municipal Recreation Department Insurance Checklist.

Sports administrators no longer need to frustrate themselves trying to determine what coverage and limits are necessary. They can simply submit the checklist to their insurance agent for completion. The insurance agent then checks off whether each standard has been met and signs his or her name.

Once the completed checklist has been received, administrators then can decide what to do based on the results. If your team/league hasn’t met the the mandatory standards, your insurance agent should  remedy the problem or you should find a new insurance agent who can offer policies that meet the minimum standards.

Visit our team and league insurance page for more information on coverage or to get a quote. Or call us at (800) 622-7370!


Copyright 2017, Sadler & Company, Inc. All rights reserved.

 

AEDs and Liability in Public Schools

Will sympathy impact legislation?   

Too many communities have grieved debilitating injuries or premature deaths of high school athletes due to cardiac events. Many schools maintain automatic external defibrillators (AEDs) in an effort to prevent such tragedies.

 There are no federal mandates regarding AEDs in public schools. Colorado, Florida, Georgia, Illinois, Iowa , Maryland, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Virginia and Wisconsin have passed legislation requiring some schools to maintain portable defibrillators.  California and Tennessee encourages placement in public schools.

But a debate has started over whether public schools can be held liable if the AEDs are not used. This stems from a lawsuit that will go before the Florida Supreme Court sometime this year.

What set the ball in motion

When an East County High School soccer player collapsed on the field, school personnel called 911 and performed CPR while waiting for emergency responders. The AED on campus was not utilized. Although paramedics were able to revive the student with a defibrillator and medication, he suffered severe brain damage and is in a vegetative state.

 The lawsuit argues that that the school district is liable. Lower courts found in favor of the school district, acknowledging that the school is legally obligated to try to help any student who becomes injured or ill on school grounds but not to authorize or direct specific treatment such as the use of an AED.

Florida ruling could have huge impact

If the Florida Supreme Court overturns the lower court ruling, there is potential for every youth sports facility or program to be affected. This includes both public and private facilities and programs, such as those run by school districts, local and state governments, parks and universities.

If this occurs, the next question will be whether AED training will be required of paid and volunteer coaches, referees, and organizers or risk being sued in the event of an episode such as the one in the current suit. And will these organizations be required to purchase other medical devices and provide training to avoid liability? And, of course, this could affect the cost of Liability Insurance, as typically is the case when claims are made.


Source: Mark Miller and Deborah J. LaFetra, “Fla. Lawsuit Set to Define Schools’ Legal Duty to Use AEDs,” Tampa Tribune.  16 Apri 2014

Covered Activities Under Sports General Liability Policies

General Liability policies for sports and recreation organizations should cover the following activities that are supervised by adults and sanctioned by the sports organization:

  • Tryouts
  • Games
  • Practices
  • Tournament
  • Non-sport Outing

It is critical that coverage is included for non-sport outings such as swimming parties, backyard cookouts, trips to restaurants, etc.  Some of the most serious injuries and largest lawsuits that I have witnessed over the past 20 years have come from non-sport outings – particularly swimming parties.

Some General Liability policies that are deficient may restrict coverage to owned and leased premises that are scheduled on the policy.  This could be a big problem if the sports organization has travel teams or if non-sporting outings occur away from the premises.

Some General Liability policies include endorsements that restrict coverage to the time periods when officially sanctioned events take place.  This is a big problem if a sports organization owns its field or facility or is responsible under the terms of a lease on a 24/7 basis.

Named Insureds Under Sports General Liability Policies

The named insureds under a sports organization’s General Liability policy should include the legal entity itself and its directors, officers, managers, employees, and volunteers.

All of the above mentioned parties are covered by most late edition General Liability policy forms.  However, many prior policy forms that are still in use neglect to add coverage for volunteers.

It is of critical importance to correctly list the name of the legal entity for the sports or recreation organization.  For example, if the organization is incorporated or is a limited liability company, Inc. or LLC should appear in the name.  In other words, the name should be listed exactly as the entity was chartered with the appropriate state governmental office.  Failure to correctly list the name of the legal entity could result in coverage denial based on a technicality.

Independent contractors who perform services for your sports organization and are paid on 1099s are not covered under the standard policy forms unless specifically endorsed. However, the sports or recreation organization and other insured persons are covered if the negligent acts of the independent contractor result in a lawsuit against any named insured.

Occurrence vs Claims-made Insurance for Sports Organizations

An occurrence policy form is superior to claims-made coverage under a General Liability policy for a sports or recreation organization such as a team, league, camp or recreation department.

Claims-made coverage is far more complicated to administer as opposed to an occurrence coverage form for the following reasons:

  • When renewing a claims-made policy, the agent must be careful to set the retroactive date back to the original inception date for the first claims made policy.
  • If a claims-made policy has been canceled or non-renewed due to neglect, the retroactive date must be properly set upon renewal.
  • When changing from a claims made policy form to an occurrence policy form, “tail coverage” or an “Expended Reporting period” must be purchased so that coverage will remain in force for delayed reaction lawsuits that are filed for covered injuries that occurred during the claims made policy period(s) but that are not reported until after the last claims made policy has expired.
  • When a sports organization is going to shut down its operations, the same “tail coverage” or “Extended Reporting Period” must be purchased to protect the past administrators and volunteers against future delayed reaction lawsuits.

Sports organizations present the perfect opportunity for delayed reaction lawsuits that can be extremely dangerous under claims made policy forms.  For example, a minor who is injured at age 5 can wait until the age of 18 plus 2 years for the statute of limitations to run out, which is age 20, before filing a lawsuit.  During this 15-year time span there is too great a chance that a technical mistake will be made under the claims-made policy form which could void the coverage.

Always buy the occurrence policy form instead of the claims-made policy form under General Liability for a sports or recreation organization.

 

Sports Insurance for Sexual Abuse and Molestation

Check if you’re covered under General Liability

Insurance carriers that write General Liability insurance for sports and recreation organizations take two approaches to covering lawsuits alleging sexual abuse and molestation.  Some carriers’ policy forms remain silent on the issue under the theory that it is covered if it is not excluded.  This is usually true, but some state case law may reach a contrary conclusion.  However, most policy forms provide an affirmative grant of coverage for sexual abuse and molestation through a special endorsement.

For example, many carriers provide an endorsement that provides sex abuse and molestation coverage in the amount of $1 million Each Occurrence and $1 million Aggregate.  Furthermore, the endorsement will usually include a laundry list of exclusions. An example of an exclusions would the perpetrator for remaining passive after an incident has come to the attention of management, etc.

Some policy forms may void sexual abuse and molestation coverage if the sports organization has not implemented a written procedure requiring a background check on all staff with access to youth. program or separately to each individual named insured, such as a league or club.  It’s obviously best if the Aggregate applies separately to each league or club.