When a General Liability policy isn’t enough
Directors & Officers Liability insurance for sports organizations covers certain types of lawsuits that are not covered by the more common and better known General Liability policy. General Liability covers certain lawsuits alleging bodily injury, property damage, personal injury, and advertising injury. Directors & Officers Liability typically covers the following broad classes of lawsuits:
- Discrimination based on race, sex, age, or disability
- Wrongful suspension or termination of league personnel or players
- Failure to follow own rules or bylaws when making an administrative decision
- Violation of rights of others under constitutional, federal, or state law
- Financial mismanagement
The Directors & Officers Liability policy pays covered legal defense costs. It also pays up to the policy limit in the event of settlement or adverse jury verdict.
Over the past 10 years, the types of claims that are potentially covered by the Directors & Officers Liability policy have increased dramatically as the public has become more litigious. The most common categories of lawsuits include disability discrimination under the Americans With Disability Act (ADA), player eligibility disputes, and league administrators not following their own rules or bylaws when making decisions. We have also seen claims involving breach of contract (usually excluded by most policy forms), race discrimination, violation of expression of religious freedom, failure to make all-star team, improper coaching resulting in loss of college scholarship, violation of Sherman Anti-Trust/Restraint of Trade, internal board disputes (usually excluded by most policy forms), injunctive relief to halt a tournament due to player eligibility issues (often not covered by most policy forms), etc.
The Directors & Officers policy form varies greatly from one carrier to the next. As a result, a detailed review is required to uncover dangerous exclusions that would take away essential coverages. Some important policy provisions include employment practices liability and 3rd-party liability, including discrimination. Unfortunately, most insurance agents are not competent in this area. The insurance experts at SADLER SPORTS & RECREATION INSURANCE can easily guide you through such a review.
Call us today at (800) 622-7370.