Posts Tagged ‘Accident Insurance’

Is a League Liable for Faulty Sports Equipment?

Concerns regarding older equipment

We received a phone call from a youth lacrosse club coach who was concerned about the use of 20-year-old helmets that haven’t been reconditioned or re-certified. He wanted to know if he could be liable in the event of a head injury to a player since it his responsibility to verify to the referee prior to the game that all equipment is in safe operating condition. He also wanted to know if his General Liability policy would cover any potential lawsuit.

 The short answer is that league administrators and coaches are responsible for the following aspects of equipment safety:
  • Long-range planning for the repair, refurbishment, and replacement of helmets. These decisions need to be made far in advance as they can take time to budget and complete.
  • Confirming helmets meet current National Operating Committee on Standards for Athletic Equipment (NOCSAE) requirements, as well as the requirements of the sports governing body.
  • Helmets should be inspected for defects in post season, pre season, weekly, and prior to any game or practice.
  • Maintaining repairing, and conditioning equipment on a regular basis.
  • Reconditioning to “like new” basis of safety equipment such as helmets should be performed by a reputable reconditioning business as opposed to an on staff trainer. NOCSAE may require re-certification.
  • Replacing helmets on a periodic basis per manufacturers recommendations.
  • Record keeping for documentation purposes on all of the above.Lacrosse equipment
There is no doubt that many of the above outlined principles may have been violated and the coach is justified in his concerns about liability.
General Liability policies generally don’t have an exclusion for lawsuits arising from of injuries due to failure to follow proper equipment safety protocol as outlined above. Therefore, coverage is likely to exist under most policies. However, a minority of policies may have a punitive damages exclusion. Willful disregard of known safety protocol could result in punitive damages. In addition, any litigation, even if covered by General Liability insurance, results in a black eye for the program and pretrial discovery and litigation is an emotional drain on league administrators and coaches.
For a more detailed resource on Equipment Safety, see our Risk Management Program for Sports Organizations

Swim Club Tragedy

Freak accident highlights need for Accident and General Liability Insurance

An accident can happen anywhere at any time. Recently, 11-year-old Lauren Cecil of North Carolina was electrocuted when an electric surge from a downed power line passed through the pool in which she and two teammates were practicing.

The swim club president witnessed the wire fall and land in a parking lot. When she heard a “popping” noise and saw a puff of smoke, she sent lifeguards to stand guard around the pool and encourage swimmers to exit.  While Cecil’s teammates were able to safely jump out of the pool, she attempted to leave using a ladder. Unfortunately, the metal ladder served as a conductor that sent a shock through her body.

Lifeguards were unable to retrieve her from the pool immediately because the water continued to transmit electric shocks. They eventually used a body board and kickboard to remove Cecil from the pool and begin CPR. Their attempts to resuscitate her were unsuccessful and she was later pronounced dead at a local hospital.

In the insurance industry, we are in the business of expecting the unexpected. Crazy things happen every day. Tragedies such as the one that befell Lauren Cecil are not unheard of, so it is important to protect your swim club or fitness facility in the event of an accident. General Liability and Accident insurance are the best forms of protection for ensuring that your organization and its administrators, staff, and participants do not suffer a serious financial loss as the result of unforeseen circumstances.

Source: 11-year-old North Carolina Girl Electrocuted While Swimming in Pool

Parties settle wrongful death lawsuit

No acknowledgement of liability in death of Kentucky high school football player

The wrongful death lawsuit for 15-year-old Max Gilpin has been settled for $1.75 million. Gilpin collapsed at Pleasure Ridge High School in August of 2008 and died three days later.

After Max’s death, his parents sued head coach Jason Stinson and five of his assistants for negligence.

The settlement, which has been confirmed to the Courier-Journal by attorneys from both sides, states that there is no acknowledgment of liability by the defendants.

Source: Insurance Journal 

Participation n Sports Accident Insurance

Mandatory vs Optional

Mandatory participation by all participants under an Accident policy is superior to optional participation by some participants.

Most Accident policies covering sports and recreation organizations require a premium to be paid on behalf of and coverage to be extended to all participants.  Since most Accident coverages are excess or secondary, mandatory participation by all participants results in a representative spread of participants whether or not they are covered by family health insurance.

On the other hand, some Accident policies covering sports and recreation organizations allow each participant or his or her parent to elect whether or not they want coverage.  Optional participation results in adverse selection against the insurance carrier since only those who don’t have existing family health insurance will normally opt to purchase Accident coverage.

Because most of the participants purchasing coverage under an optional participation plan don’t have existing family health insurance, the Accident policy will be paying most claims on a primary basis, which will be very expensive for the insurance carrier.

As a result, optional participation Accident policies tend to be very expensive and often unaffordable.  In order to make them more affordable, the insurance carrier will water down the benefits by either lowering the medical limit or inserting internal payout limitations or sublimits.

Watered-down benefits under Optional participation Accident policies don’t adequately cover medical bills in the event of a moderate to serious injury.  If all the medical bills of the injured party are not paid, the result can be a lawsuit against the sports organization in search of a deep pocket.

In addition, many General Liability carriers that cover sports organizations require that Excess Accident Insurance is carried on all participants on a mandatory participation basis.  Otherwise, General Liability coverage can be voided in the event of a participant injury lawsuit.

Don’t Underprotect Your Sports Organization

Minimum medical limits for Sports Accident Insurance

An Accident Insurance policy covering sports and recreation organizations such as teams, leagues, camps, and recreation departments should have a medical limit of at least $25,000.

A limit less than $25,000 won’t adequately respond to a moderate to serious injury. For example, an ACL injury is a common injury in sports and the costs of surgery and rehab can easily exceed $25,000. An Accident policy with a limit of $5,000 or $10,000 will only protect against nickel-and-dime claims.

When Accident limits are not high enough to fully cover the medical bills, the sports organization and its administrators (officers and directors), employees, and volunteers will likely be shotgunned into a lawsuit as a deep pocket.

Disclaimer: The minimum recommended medical limits should be exceeded if higher limits are available and affordable.

Recreation Department Accident Insurance

Individual or Blanket?

A recreation department administrator recently asked us if the Accident insurance on their sports programs should be offered on an individual or blanket basis. He also wondered if the recreation department would have any remaining liability if a player refused individual insurance.

I teach the courses on sports insurance and risk management for the National Alliance for Youth Sports’ Academy for Youth Sports Administrators. The standard for sports insurance as set by the AYSA is to offer blanket Excess Accident insurance where a premium is paid on behalf of and coverage provided for all participants. Accident insurance on every participant is the first line of defense against lawsuits resulting from participant injury. Accident insurance, if properly written, can almost guarantee that the parent will have no out of pocket medical bills.