Posts Tagged ‘general liability’

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.

Stricter Underwriting Guidelines for Colleges

Sandusky scandal prompts carriers to reassess policies

Due to the Penn State scandal over Sandusky and the incidents of sexual abuse/molestation, insurance carriers are now more apt to tighten underwriting and require more information from schools regarding their preventive measures.

“Insurers will require more data from colleges to find out what other programs they may offer. I think insurers will pay more attention to what takes place during summer months, all the camps that take place, what procedures are in place and how schools are monitoring the environment,” said Bill Waldorf, president of a brokerage that offers insurance for schools.

Waldorf also pointed that all higher education facilities have  exposures to children because they provide daycare, childhood learning programs, athletic activities and/or summer camps.

In addition, msexual abuse/molestationany high school students who are either taking advanced placement courses or visiting for recruitment purposes , and other youth on campus for athletic events, concerts, and faith-based programs are all vulnerable.

Most General Liability underwriters in the sports and recreation niche will be looking for the following elements as a precondition for offering sexual abuse/molestation coverage:

  • Criminal background checks on all paid and volunteer staff with access to youth
  • Written policies and procedures to make an incident less likely to occur
  • Written allegation response plan including a requirement to notify law enforcement

Also, many college and university insurance carriers may no longer underwrite camp exposure and may require camps to take out their own General Liability including coverage for sexual abuse and molestation. Here is the link to the Sadler Camp Insurance Program.

We have more information on sexual abuse and molestation risk management in our library.

Source: Insurance Journal, East, 2012/07/19

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 

UGA Athlete Settles Insurance Dispute

Cornerback blames incomplete paperwork

Former cornerback Decory Bryant finally reached a settlement of $400,000 with the University of Georgia Athletic Association. UGA athlete settles injury caseA neck injury ended Bryant’s career in 2003.  The settlement was reached after an Athens-Clarke County judge dismissed the lawsuit that claimed the association failed to secure Bryant a $500,000 athlete disability insurance policy that would have paid him in the event he suffered a career-ending injury.

Ed Tolley, the association’s attorney, noted that the settlement was a sign that the athletic association was always committed to helping Bryant.

However, Bryant claimed that an official of the school failed to complete the paperwork for the $500,000 policy.


League Insurance Carrier Tries to Deny Injury Claim

Certificate of insurance was key in court ruling

A General Liability policy was taken out under the name of Northeast Youth Football League and its member teams. A certificate of insurance evidencing “additional insured” status was issued on behalf of a member team to the field owner as required by agreement. Another member team wanted to use the fields and the same certificate of insurance was submitted. A spectator was injured in a fall from a bleacher during a game played by the second team. Great American E&S Insurance Company denied the claim and sought a declaratory action for its responsibility to pay for the injury.

Certificate of INsurance

Sample Certificate of Insurance

Great American unsuccessfully argued that the certificate of insurance did not apply to the second team since its name was not listed on the certificate of insurance. The Supreme Court, Appellate Division, Third Department, New York disagreed by reasoning that neither the certificate of insurance nor the policy included the names of any of the teams, but instead listed only the league and its member teams.

Great American also argued that two separate policy exclusions would be applicable. The first was a Design Defect and Structural Maintenance Exclusion and the second was an exclusion stating that Additional Insureds were not covered for their sole negligence. However, the court reasoned that the latter exclusion could apply but said that the insurance carrier waived its right to use it as a defense since no written disclaimer was sent specifically mentioning their intent to use such exclusion.

In my opinion

Had the carrier given proper notice, it is likely that they could have properly denied the claim for the additional insured field owner, who was likely solely negligent in the slip and fall accident. The only way for the team to have shared in this negligence would have been due to lack of supervision or if the liability had been contractually assumed in a lease or license agreement.

Source: Rough Notes, February 2010

HIV/AIDS in Youth Sports Leagues

| Health

Policy-making on infected youth athletes

Should players with HIV/AIDS be allowed to participate in youth sports leagues?  We have seen an increased number of phone calls requesting direction as to whether or not teams and leagues should allow players that are infected  HIV/AIDS to participate.  Although this is a controversial subject, we hope you find our article, HIV In Youth Sports, both useful and informative.

Automatic External Defibrillators in Ballparks

Does General Liability provide coverage for negligent use?

Several states have enacted legislation requiring sports organizations to make available automatic external defibrillators (AEDs) at the ballpark and training staff in their location and use.The question that often arises is “Does our General Liability policy provide coverage if something goes wrong and the sports organization and the person administering the AED are sued?”
The applicable provisions in most General Liability policy forms are as follows:
  • Does the policy have a professional medical services exclusion that applies to the sports organization as an entity itself and to all other insured persons?
  • To what extent does the policy limit the scope of coverage for employees and volunteers as follows:

Section II — Who Is An Insured

2. Each of the following is also an insured:

a. Your “volunteer workers… or your employees” However, none are insureds for:

(1) “Bodily Injury” or “personal and advertising injury”:

(d) Arising out of his or her providing or failing to provide professional health care services.

According to K&K Insurance Group, the simple answer is that the standard General Liability policy form will likely respond to such a lawsuit if the AED is administered by a lay person. This situation is considered to be more like the rendering of first aid rather than a professional health care service. On the other hand, if the AED is administered by a nurse or doctor, their own Professional Liability policy would likely provide primary coverage.  Of course, they add the normal disclaimer that coverage for any claim will stand on its own unique circumstances and all policy coverages, exclusions, limitations, conditions, and definitions will apply.

Apparently, AED technology is greatly improved to the extent that it is almost impossible to make an error in its use. The newer models will only activate if no heart beat is detected or if the heart is so out of rhythm that the patient is in a life threatening situation.

Please see our article on AEDs in public schools.

Purchasing Sports Insurance

Don’t rely on certificates, brochures, or proposals

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 is adequate to protect against some of the most common types of devastating lawsuits?

Sports and recreation administrators often rely on a simple review of the wrong types of documents. It is a mistake 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 which 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 polices 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.

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.

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

  1. If 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 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.