The High Cost of Being Underinsured: A Risk You Can’t Afford
Being underinsured can be just as dangerous as having no insurance at all. While insurance is often seen as a necessary but frustrating expense, it’s undeniably a critical safety net. The right insurance coverage has protected countless individuals and organizations from financial disaster.
Many sports organizations, especially those run by volunteers, often underestimate their exposure to risk. Unfortunately, this lack of awareness can lead to dangerous gaps in coverage. These aren’t just oversights—they’re miscalculations that can result in catastrophic consequences.
That’s where your insurance agent comes in. Their job is to anticipate the unexpected. With years of experience, they understand one essential truth: anything can happen to anyone, at any time.
Why So Many Sports Programs Are Underinsured
After more than 25 years in the sports insurance industry, I’ve heard virtually every reason for skipping Accident and General Liability insurance. Here are the four most common misconceptions—and why they’re flawed:
1. “We’ve never had a serious injury or lawsuit.”
Just because it hasn’t happened yet doesn’t mean it won’t. Serious incidents in youth and amateur sports are relatively rare, but when they occur, they can be legally and financially devastating. A clean record today doesn’t guarantee protection tomorrow.
2. “Our waiver and release forms protect us.”
A well-crafted waiver/release form can help—under the right circumstances. But it won’t prevent someone from filing a lawsuit. Even if the case is eventually dismissed, you could still rack up $10,000 to $20,000 in legal defense costs.
3. “Volunteer immunity laws will cover us.”
While volunteer immunity statutes exist at both the state and federal levels, they’re often filled with exceptions. These laws typically exclude protection in cases involving gross negligence, reckless conduct, or willful disregard for safety. Worse still, they don’t cover paid staff or the organization itself.
4. “Our volunteers have their own liability insurance.”
This is a risky assumption. Homeowner’s Liability and Personal Umbrella policies frequently exclude coverage for sports-related volunteer activities. Plus, these policies won’t respond to non-bodily injury claims like discrimination, wrongful termination, or failure to follow bylaws. For those issues, you need a Directors & Officers Liability policy.
Essential Insurance Policies for Sports Organizations
If you’re part of a community-based sports organization, such as a local league, team, or municipal recreation department, these are the core insurance policies you should have in place:
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Accident Insurance
Covers medical expenses for injured players or participants, regardless of fault. -
General Liability
Protects against lawsuits related to bodily injury, property damage, or personal/advertising injury. -
Directors & Officers Liability
Also known as Trustees Errors & Omissions for municipal rec programs, this policy covers lawsuits stemming from internal mismanagement—like discrimination, wrongful suspension, or failure to follow rules and bylaws. -
Property/Equipment Insurance
Covers facilities and sports equipment against losses due to fire, theft, vandalism, and more. -
Crime Insurance
Protects against embezzlement, check fraud, or theft of funds by employees, volunteers, or outsiders. -
Workers’ Compensation
Required in most states for organizations with three or more employees, it provides benefits for work-related injuries, including medical bills, lost wages, and even death benefits. -
Business Auto Insurance
Covers vehicles owned, leased, or rented by your organization, including liability and property damage.
Plan Ahead, Protect Your Organization
There may be additional insurance needs based on the unique nature of your sports program. To learn more, we recommend reviewing “7 Critical Mistakes to Avoid When Buying Sports Insurance.”
Need help assessing your coverage or want a quote? Call us today at (800) 622-7370—we’re here to help you get the protection you need.
