Archive for the ‘Teams/Leagues’ Category

Insurance for Youth Sports Leagues

The purchase of quality sports insurance policies, including Excess Accident, General Liability, Directors & Officers Liability, Crime, and Equipment,  is an essential element of a broader based risk management program. The purchase of these policies has become the standard in youth sports. Failure to do so subjects the entity and its directors, officers, employees, volunteers, and other stakeholders to uncovered liability and property losses. By purchasing quality insurance, the board of directors fulfills its fiduciary responsibility to act in the best interests of the organization and those who serve the organization, as well as the members who are benefited.

Quality sports insurance policies are now widely available in the marketplace from many different sources. They may be obtained through the sanctioning body or association to which a league belongs, if any, or from an independent source. Policies are available through local insurance agents or insurance agencies that specialize in sports insurance that operate on a national basis. However, there can be a wide discrepancy in the quality of coverages and some programs and carriers may offer substandard limits or unacceptable exclusions that can result in unexpected claim denial.

When comparing competing insurance plans, most decision makers tend to concentrate on price as the major differentiating factor. However, the quality of coverage is much more important. It is often difficult for decision makers to compare the coverages of one policy to another to determine which one offers the broadest protection. Insurance agent marketing materials, such as proposals, brochures and web page descriptions, often don’t include complete information about all policy coverages and exclusions. The only way to really know what is offered is to enlist the assistance of an experienced business insurance professional to review the actual policy forms. However, most leagues won’t go to that trouble. As an alternative, we offer a coverage checklist that can be presented to an insurance agent for completion and signature. This checklist will require the insurance agent to disclose how the policy deals with critical coverage elements and whether it doesVolleyball insurance or doesn’t meet recommended minimum standards for quality sports insurance.

Below is a brief summary of the most essential sports insurance policies with a brief overview of important coverage considerations.

Excess Accident: Pays medical bills on behalf of injured participants (players and staff) to the extent that such bills are not already covered by existing family health insurance, if any. This policy is usually required by General Liability carriers as a pre-condition of General Liability coverage. An Excess Accident policy should have a medical limit of at least $25,000, and higher limits should be strongly considered.

General Liability: Responds to certain claims or lawsuits alleging that the negligence of the sports organization resulted in bodily injury, property damage, personal injury (i.e. slander, libel, invasion of privacy) or advertising injury (disparaging statement made about a competitor in advertising materials) to a third party. The typical claim is bodily injury to a spectator or athletic participant. The “each occurrence” limit should be at least $1,000,000 and coverage enhancements should be considered for sex abuse and molestation and non-owned and hired auto liability. Dangerous exclusions to avoid include athletic participants’ exclusion, punitive damages exclusion, assault & battery exclusion, contractual liability limitation, and collapse of a temporary structure.

Directors & Officers Liability: Responds to certain lawsuits that are not covered by a General Liability policy involving managerial negligence or employment practices Basketball Insuranceviolations. Examples include financial mismanagement; violation of rights under state, federal, or constitutional law; failure to follow own rules or bylaws when making a decision; wrongful suspension, termination, or discipline of staff or players; and discrimination based on race, sex, age or disability. The “each claim” limit should be at least $1,000,000. An important coverage extension to consider is Cyber Risk coverage to protect against losses resulting from data breaches of confidential information by hackers and for libelous statements posted on websites or social media.

Crime: Employee Dishonesty covers a financial loss due to embezzlement, theft of property, or unauthorized personal charges by an inside officer, director, or staff member. Coverage extensions should be added for forgery and alteration, as well as theft of money & securities. Sports organizations should implement financial controls to make such occurrences less likely to occur. The policy should be endorsed to extend Employee Dishonesty coverage to non-compensated officers and volunteers.

Equipment: Covers a financial loss from damage to sports organization equipment (i.e. sports equipment, field maintenance equipment, concession equipment, etc.) and small structures, such as bleachers, fences, and scoreboards from perils such as fire, wind, theft and vandalism. Coverage should be purchased on a replacement cost basis with equipment valued at 100% of replacement cost to avoid any co-insurance penalties in the event of a partial loss.

Other Policies: Larger sports organizations with more complex operations may require the following additional policies: Workers’ Compensation to meet requirements of state law pertaining to injured workers, Commercial Property to cover permanent structures such as larger buildings and their contents, and Commercial Auto to cover owned vehicles.

For more information on why each insurance policy is important and pitfalls to avoid, see the special report entitled “7 Critical Mistakes to Avoid When Buying Sports Insurance”.

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.

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.

Coach Certification Liability Insurance

Several of the coach certification training organizations offer General Liability insurance as a membership benefit to the coaches. This is a great benefit that is designed to act as a safety net in the event that the sports organization neglects to provide its own insurance or if its insurance contains unacceptable exclusions.

Some sports organizations that require all of their coaches to be certified mistakenly interpret this membership benefit as a green light to forgo purchasing their own General Liability insurance. This is a dangerous mistake. Individual coach certification General Liability insurance will not provide protection under the following circumstances:

  •  It won’t cover the sports organization as an entity. As a result, the assets of the entity are unprotected if a lawsuit results in legal defense costs, settlement, or an adverse jury verdict. This can be catastrophic; even small sports organizations can have many thousands of dollars of asset value in their bank accounts, equipment, real estate, etc.
  • It won’t allow for the issuance of a certificate of insurance under the name of the sports organization, which may be a property owner’s requirement for field or facility access.
  • When a youth participant is injured, it is customary for all adult volunteers in close proximity to the injury to be shotgunned into the lawsuit based on negligent supervision. This includes the head coach, assistant coach, manager, umpire, referee, team mother, etc. In addition, the organization’s board members and officers will normally be included based on lack of general supervision. It’s likely that not all these volunteers are certified coaches and therefore won’t be protected.
  • Most coach certification liability policies only cover lawsuits arising out of direct coaching activities. However, many lawsuits in the youth sports context arise out of non-sport activities and outings such as swimming parties, restaurant celebrations, backyard cookouts, banquets, fundraisers, etc.

The bottom line is that all sports organizations need their own General Liability policy. If you have questions, or want assistance in determining your insurance needs, please call us at (800) 622-7370.

 

Copyright 2002-2014, Sadler & Company, Inc.

 

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.

The Gamble of Being Underinsured

The risks can be catastrophic

Being underinsured is just as big a mistake as being uninsured. It’s no secret that insurance is one of those necessary purchases that buyers resent. But it’s also no secret that purchasing the correct coverage has protected countless people and organizations from potentially catastrophic financial circumstances.

Sports organizations are often run by volunteers who aren’t aware of the potential risks to which their league and players are exposed. This often results in lack of coverage – for all the wrong reasons. Thinking ahead is your insurance agent’s job. He or she has seen it all and knows anything can happen to anyone at any time.

What’s behind the lack of insurance?

Many sports administrators mistakenly believe that they don’t need to buy Accident and General Liability insurance to cover their sports programs for various reasons. After more than 25 years in the sports insurance industry, I’ve heard every excuse in the world for such decisions. Here are the top four:

  • “We’ve never experienced a serious injury or lawsuit.”  The fact is that sports lawsuits tend to be infrequent but have a high potential for severity in terms of potential damages owed. Some sports organizations may go over five years without a serious incident, but it’s just a matter of time.
  •  “Our waiver/release forms will prevent lawsuits.” The use of a well-drafted waiver/release form is a great tool under some circumstances. However, it won’t prevent a lawsuit from being filed. Even if the waiver/release does result in the lawsuit eventually being dismissed, it may still cost $10,000 to $20,000 in legal defense fees to get to that point.
  •  “Volunteer immunity statutes will prevent lawsuits.” State and federal volunteer immunity statutes are a positive step in the right direction. However, they typically have too many loopholes and exceptions that limit their effectiveness. For example, most immunity statutes exempt protection in the event of grossly negligent behavior, willful or wanton conduct, or the reckless disregard for the safety of others. Most lawsuits make these allegations and the judge has to sort out if they have any merit. All this takes time, and the more time it takes to sort this out, the greater the legal fees. In addition, these statutes don’t protect paid staff and the sports organization as an entity itself.
  •  “Our employees/volunteers/administrators provide their own liability policies.” Many sports organizations will leave it up to the individual volunteers or administrators to protect themselves through Homeowner’s Liability, Personal Umbrella, or Coach Certification Liability policies. This can be a dangerous strategy for many reasons. Homeowner’s Liability and Personal Umbrella policies may include an exclusion for lawsuits arising out of activities of the insured person as a sports volunteer. Furthermore, they won’t protect against the non-bodily injury or non-property damage lawsuits that a Directors & Officers policy may protect against such as discrimination, wrongful termination, failure to follow own rules or bylaws, etc.

The insurance policies sports organizations need

Below is a list of the most important insurance policies that most community-based sports organizations such as teams, leagues, and municipal recreation departments should carry.

  • Accident insurance pays medical bills on behalf of injured participants.
  • General Liability responds to lawsuits arising from bodily injury, property damage, and personal/advertising injury.
  • Directors & Officers Liability (or Trustees Errors & Omissions for municipal recreation departments) responds to certain lawsuits not covered by General Liability, such as discrimination, wrongful suspension or termination, failure to follow your own ruGambling diceles/bylaws, and violation of rights of others under state, federal, or constitutional law.
  • Property/Equipment insurance covers buildings, contents and equipment against loss due to fire, vandalism, theft, etc.
  • Crime insurance 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.
  • Workers’ Compensation may be required by state law for organizations with three or more employees. It pays benefits to injured workers for on-the-job injuries including medical bills, lost wages, disability lump sums, disfigurement lump sums, and death benefits.
  • Business Auto insurance covers liability and physical damage to owned, non-owned, and hired autos.

There are other types of policies that some organizations may require. For much more detailed information on this topic, please see 7 Critical Mistakes to Avoid When Buying Sports Insurance.

For assistance in determining which policies your organization needs, to have your questions answered, or to receive a quote, please call us at (800) 622-7370.

 

Intentional Under Reporting of Sports Teams Insurance

 It’s not just fudging the numbers, it’s fraud.

The risk manager of a large municipal rec department called me recently. He had a league’s certificate of insurance in his hands that was issued by us. He was concerned that the league using his fields had over 30 teams, but our certificate indicated that coverage was only purchased for five. He asked if the coverage would be in force in the event of an injury. I had to break the news to him that coverage may not be in force – and that we had a big problem if his facts were correct.

Sports teams or leagues purchase Accident and General Liability insurance that is typically priced on a per team basis. The authorized representative of the sports organization completes an online or paper application and reports the number of teams in each age group. Accurate reporting, which is a fundamental part of the rate structure, depends on the “honor system.”  Intentional under reporting is flat out insurance fraud, and can result in claim denial, and definitely results in unwarranted rate increases.

The best way for the insurance carriers to scientifically predict the dollar amount of likely losses and needed rates is to study past loss history and assign expected losses per team. When the number of teams is intentionally under reported, the insurance carriers don’t collect the premium necessary to offset the risk of loss. When losses increase as a percentage of premiums collected, the insurance carriers must apply rate increases across the board.

Steps being taken to prevent under reporting

In an effort to maintain competitive sports insurance programs, the following steps are being taken to keep under reporting of teams in check:

  1.  The number of teams reported on insurance applications will be cross referenced with association membership registrations.
  2. The number of teams reported on the insurance application will be cross referenced with the team/league website.
  3. At the time a claim is reported, claims adjusters may investigate the proper reporting of team figures before a claim is paid.
  4. Sports insurance programs may require a roster of team names.

Please do your part to make sure that all of your teams are reported and accounted for when you apply for coverage. And remember, intentional under reporting of teams hurts not only those who depend on the claims being paid, but also drive up rates for everyone.

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.

 

What’s the Most Necessary Evil in Youth Sports Today?

A guest post by Jon Goldman of Reaching Our Goal

The answer is, of course, fundraising.  No one wants to do it, everyone needs to do it and rarely is it done well. That’s because while we’re all racing around texting, posting on Facebook, tweeting and downloading apps to our to cloud-connected smart phones, the typical fundraiser is a throwback to the ’70’s and 8-track tapes!

At a time when youth sports has never been more competitive or demanding, why are so many travel teams still selling candy, standing in front of a Walmart shaking a can or in a parking lot washing cars?

In the good old days, we lived in a zip code-driven fundraising world.  Raising some money by canvassing the people who lived nearby was simply what everyone did. On the menu: magazine subscriptions, tubs of cookie dough, Christmas wreaths, scented candles, printed cups, banners and discount cards – you name it.  Chances are, at one time or another, some youngster rang your doorbell hoping you would buy some, right?

But that just isn’t going to cut the mustard any more.  For so many reasons, starting with the fact that the average adolescent today lacks the desire or time to knock on doors, parents definitely don’t have the time to chaperone junior around the block. Sales efforts often generate hundreds of dollars, but the teams needs thousands. Giving companies such as Nestle or Coke 50% of your heard-earned sales just doesn’t seem right. And, most importantly, who really wants to buy that stuff aElectronic fundraisingnyway?

Today, fundraising for sports teams is best done electronically and is based on relationships, not geography.  After all, who’s going to be more generous toward your young baseball player today? The neighbor who barely knows him or an aunt or family friend who lives two counties or hundreds of miles away?  It’s the people who know and care about your athlete —regardless of how far away they live — who will be more supportive every time.  The challenge simply is how to ask.

Companies like Reaching Our Goal are making it easier and easier for teams to raise thousands of dollars in just minutes by using the Internet to reach people around the corner and around the world. Think mouse clicks instead of footsteps. The joy of giving instead of the burden of buying.  College teams have been at the forefront of this trend for awhile now. They don’t have the time or the desire to move through neighborhoods near campus.  Folks today probably wouldn’t be excited to see a 19-year-old university student on the stoop with a clipboard and outstretched hand!

Today, the very same approach that’s worked for collegiate squads in every sport and at every level, is now easily available to travel teams or organizations just like yours. And that’s good news because, if we’re really being honest, fundraising has never really been anyone’s idea of a good time.  But now, it can be accomplished safely, painlessly and profitably from a keyboard.  So, yes, fundraising really is a necessary evil, but doing it well and getting real results has never been more crucial.