Posts Tagged ‘sports accident insurance’

Who’s Covered Under Sports Accident Insurance?

It depends on who is considered a participant

An Accident policy customized for sports and recreation organization should cover all players and staff, whether paid or volunteer.

Staff typically includes all head coaches, assistant coaches, managers, umpires, referees, concession workers, scorekeepers, field Youth football accident insurancemaintenance workers, and league officials such as directors and officers.  Our statistics indicate that approximately 6% of Accident claims occur to non-player staff.

Your General Liability carrier may require that Excess Accident insurance is carried on all “participants.” Otherwise, General Liability coverage may be voided in the event that the injured participant files a lawsuit.  The definition of participant must be included in the General Liability policy.  Typically, the definition will include all persons who are granted access to restricted areas where the public is normally not permitted.  Therefore, your Accident insurance policy must cover all players and staff.

Some may argue that paid staff should be covered by Workers’ Compensation. However, Workers’ Compensation laws vary from state to state and most state laws exempt certain employments where payment is less than a certain threshold.  In addition, very few private sports organizations carry Workers’ Compensation.


Covered Activities Under Sports Accident Insurance

An Accident insurance policy customized for sports and recreation organizations such as teams, leagues, camps, and recreation departments should cover all activities sanctioned by the organization, including tryouts, practices, games, tournaments, non-sport outings and authorized group travel to and from the above events.

It is also important for an Accident insurance policy to cover non-sport outings such as awards banquets, celebration trips for ice cream, backyard cookouts, swimming parties, trips to see college or pro ballgame, etc.  Some of the most serious injuries in youth sports can arise out of these non-sport activities.Sports tournament

Coverage for travel to and from covered activities is a controversial subject.  At a minimum, coverage should be provided for authorized group travel to and from these events.  Examples of group travel would be in single vehicles such as a bus, mini van, or a caravan of vehicles.

Some sports organizations would like to see coverage extended to individual travel to and from the covered events.  However, many Accident insurance carriers will balk at providing this coverage due to the high severity exposure as they argue that the sports organization is not responsible for injuries arising from individual travel for which it does not direct, control or supervise.

Sports Accident Insurance Deductibles

Understand your choices

Accident insurance deductibles for sports and recreation organizations commonly range from $0 to $500 per claim.

Accident Deductibles can result in significant premium savings.  For example, going from a $0 to $100 deductible may result in a 20% discount on many Accident policies.

Reasonable deductibles on Accident policies can be beneficial to sports organizations. However, it should be explained to participants and/or parents that they are responsible for paying the deductible out of their pocket.

There are two types of common Accident deductibles under an Excess Accident policy: corridor and disappearing.  A corridor deductible applies even if existing family health insurance has made payments on a primary basis.  On the other hand, a disappearing deductible is satisfied to the extent that existing family health insurance has made payments.


Sports Accident Insurance Payout Period

Understanding the details of your policy

Under an Accident insurance policy for a sports or recreation organization, the payout period is the time period for which incurred medical bills will be paid from the date of the injury.

The most common payout period under an Accident policy is one year.  However, for a small additional premium, the payout period may be extended to two or three years.

If the medical limit is $100,000 or higher, it is recommended that the payout period be amended to a period of two or three years. This is because if the bills are greater than $100, 000, it is more likely that bills will continue to be incurred for more than one year.

In addition, there are other situations where medical surgeries and treatments to injured minors may be delayed until they reach certain growth or developmental benchmarks.  Such delays can result in no coverage if the surgery or procedure occurs after the expiration of the payout period.  This is another reason for extending the payout period to two or three years.

Excess Coverage For Sports Accident Insurance

The difference between excess and primary insurance

Excess Accident insurance is superior to primary insurance for Accident insurance policies for sports and recreation organizations such as teams, leagues, camps, and recreation departments.  This is especially true if the purpose of the Accident policy is to cover moderate to  serious injuries.

Excess Accident insurance is also known as secondary insurance.  Excess Accident insurance requires other collectible insurance such as family health insurance to respond first.  As a result, the typical case involves initial payment by the family health carrier less any deductible and coinsurance.  The Excess Accident policy should provide payment for such deductible or coinsurance so that the injured participant or parent incurs no out of pocket expenses.

There should be a coordination of benefits between the two policies so that the injured party does not owe a debt to the medical service providers.  If a debt is not owed, there will be no dunning letters or calls from collection agencies and as a result there will be little need for the injured party to visit an attorney.

Also, due to the coordination with existing family health insurance, an Excess Accident policy will be much less expensive than a Primary Accident policy.

On the other hand, Primary Accident insurance pays without regard to other collectible insurance.  For this reason, Primary Accident insurance is generally unaffordable.  In order to make it more affordable, the insurance carriers that sell Primary Accident insurance will water down the payout by either selling medical limits less than $25,000 or by inserting internal payout limitations which are also known as allocated benefits or sublimits.  See prior blog posting on Internal Payout Limitations under Accident Insurance for a description of how they significantly reduce payouts.

The use of either reduced medical limits under $25,000 or internal payout limitations under Primary Accident insurance will result in only a partial payment in the event of a moderate to serious injury.

Partial payouts can result in lawsuits by injured parties in search of a deep pocket.  This is bad news for sports organizations and their directors, officers, employees and volunteers.  Therefore, high limit Excess Accident insurance that does not contain internal payout limitations is far superior to low limit Primary Accident insurance that contains internal payout limitations.

Internal Payout Limitations

Accident insurance policies that cover sports and recreation organizations such as teams, leagues, camps or recreation departments should not include internal payout limitations which are also known as allocated benefits or sublimits.
Examples of these unacceptable internal payout limitations, allocated benefits, or sublimits include:
  • Limiting surgeons’ fees to $2500
  • Limiting daily hospital room and board to $100
  • Limiting doctors’ visits to $20
  • Limiting physiotherapy to $10
These internal payout limitations effectively reduce the payout for moderate to serious injuries to 50%  of total medical bills in many cases.  A reduced payout leads to unpaid medical bills which can result in a lawsuit against a sports organization and its administrators, employees, and volunteers in an effort to find a deep pocket.
These internal payout limitations should always be avoided for normal sports and recreation activities.  However, in the case of high risk adult sports and activities, it may not be possible to negotiate affordable terms with an Accident carrier without such provisions.

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.