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.
There are three basic scenarios that can arise under excess Accident insurance:
- If existing family insurance pays for 100 percent of all medical bills, the excess Accident policy will not make payment for any benefits.
- 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.
- 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 will ultimately result in nasty dunning letters and collection phone calls being made 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 – the sports organization and its directors, officers, and volunteers.
This is why the few General Liability carriers willing to insure sports organizations require the existence of Accident insurance as a precondition of coverage.