Shifts responsibility to leagues to pay for concussion lawsuits arising out of Heads Up course content and instruction
USA Football (USAFB), the governing body of youth football and potential deep pocket target in future lawsuits involving brain injury and concussions, has imposed onerous contractual requirements on member leagues that have adopted USAFB’s Heads Up Football (HUF) tackle training course. The potential effect of these contractual requirements is to shift the responsibility to pay for brain injury lawsuits away from USAFB/HUF and to the leagues in cases where both parties are named as defendants in a lawsuit.
Read fine the print for objectionable insurance and indemnification/hold harmless provisions
Prior to being able to access the 2015 HUF training course, leagues must first sign an 8-page contract with USAFB which includes objectionable sections dealing with both insurance requirements and hold harmless/indemnification transfer of liability. This is a classic example of “risk transfer 101” where the party in power imposes its superior strength and bargaining power on the weaker party. Furthermore, in this case, the party that is being shielded (USAFB|HUF) is providing a high-risk service that could be a lightning rod for potential litigation.
Without getting deep into the technicalities, to follow is a brief summary of the objections:
The insurance requirements section is worded to require the league to name USAFB|HUF as an additional insured under the league’s General Liability policy and furthermore states that the league’s insurance is to be primary to USAFB|HUF’s policy. The intent appears to be to shift the responsibility to pay for legal defense and settlement from USAFB|HUF’s insurance carrier to the league’s insurance carrier in cases where negligence is alleged against both parties.
The indemnification/hold harmless provision requires the league to assume the liability of USAFB|HUF in the event that the league breaches or defaults on any one of the 10 member obligations when implementing the HUF program. Leagues that can’t prove that they have implemented all 10 requirements may unknowingly be assuming liability that would normally belong to USAFB|HUF.
Complaints by leagues, insurance carriers, insurance agents
These requirements have resulted in numerous complaints by local leagues, national youth football sanctioning bodies, and insurance agents and carriers that specialize in this niche. At least one prominent insurance carrier that serves the sports niche has refused to comply with the additional insured requirement for many of its clients.
Example of how many brain injury lawsuits may play out
Any concussion/brain injury lawsuit filed by an injured player is likely to name multiple defendants including the league and its directors, officers, and staff as well as the vendor that provided the tackle training instruction, i.e. USA Football|Heads Up Football. Under the legal theory of contributory negligence, for example, the league may be found to be 50% negligent (for negligent supervision and instruction) and USAFB|HUF may be found to be 50% negligent (for negligent course content and instruction).
Normally in such cases the insurance carriers of both parties would pay for the respective parties’ own legal defense and the court apportioned negligence percentage of settlement or adverse jury verdict costs. However, with the addition of the objectionable insurance requirements and indemnification/hold harmless provision, it is feared that the outcome would be altered so that the league would be responsible to pay for all of USAFB|HUF’s legal defense and settlement costs. In other words, the league could be responsible to pay for 100% of all legal defense costs and settlement costs for both parties. At least that is the opinion of several experienced and reputable insurance and risk management experts who have reviewed the terms of the contract.
4 reasons why the objectionable requirements are unfair and detrimental to leagues, insurance carriers, and youth tackle football as a whole
- In cases where both the league and USAFB|HUF are named in a lawsuit, the General Liability insurance carrier of USAFB|HUF should be responsible for paying for its own legal defense and any settlement or adverse jury verdict costs to the extent that a court apportions negligence to USAFB|HUF. USAFB|HUF should have enough confidence in its own course content and instruction to be willing to assume the risks of its own negligence.
- The insurance requirement is backwards in that it should be the league that requests USAFB|HUF to issue a certificate evidencing that it carries $1,000,000 in General Liability and in naming the league as “additional insured.” After all, USAFB|HUF is the vendor that is providing the high-risk service in exchange for a fee. Leagues should require all their vendors to provide such insurance protection including umpire crews, concessions, field maintenance, janitorial, fireworks, etc., instead of the other way around, as is the case here.
- Any time a league names another party as an additional insured, the league is sharing its limits with the additional insured. This results in a reduction of limits available to the league and its directors, officers, employees, and volunteers. In a situation where a vendor is providing a high-risk service, additional insured status should only be granted when absolutely necessary to protect an additional insured against the sole negligence of the league.
- By deflecting the claims to the local leagues and their carriers, USAFB|HUF could be damaging the leagues’ loss records and jeopardizing their access to affordable insurance or any insurance in the future. In the relatively small niche of youth tackle football insurance, adverse claims history can quickly snowball and impact the few underwriters of this coverage.
Leagues should demand that USAFB | HUF amend the contract
Leagues should demand a more equitable contract with amended insurance requirements and an indemnification/hold harmless provision that restores fairness to the equation. In cases where negligence is alleged against both parties, each party should be responsible for its own negligence. One acceptable solution would be alter the current contract to drop the additional insured requirement and the indemnification/hold harmless obligation on the part of the league should not be triggered by failure to comply with all 10 of the member obligations.
Recent discussions with USAFB over these concerns have resulted in incremental improvements for our American Youth Football clients; however, the provisions are still troublesome in my opinion.
USAFB|HUF should be commended on its development and implementation of the Heads Up tackle training program. However, leagues should think twice about signing the contract as it now exists.