Liability, Safety, Insurance & Risk

• We design programs to be safe, but injuries are going to happen

• More than just children are at-risk– Organization– Players– coaches– Officials– League officers and directors– Municipalities– League sanctioning bodies– Spectators– Public– Others who have contractual relations with program

Types of Injuries

• Bodily injury• Emotional injury• Property damage• Violation of individuals rights under the

state• Federal or constitutional laws• Breach of contract

* All usually result in an expensive lawsuit!

Legal Terms Defined• Liability – state of being legally obligated &

responsible

• Standard of Care – act as a prudent person would in the same situation; responsibly

• Tort – a civil act that; basis for a lawsuit

• Negligence – at fault for accident; not following stand of care

4 Elements of Negligence

1. Duty owed – obligation is owed to protect against unreasonable harm (must perform “reasonable person standard”)

1. Breach of duty – the duty that is owed is breached

2. Causation – the breach of duty is the cause of the injury

3. Damages – an actual loss or damage must result

5 Defenses to claims of negligence

1. Prove that any one of the 4 elements of negligence is not valid

2. Assumption of risk

3. Contributor negligence

4. Comparative negligence

5. Act of god

Again, you should have had all of this in Rec Law!

• Damages

• Bankruptcy

• Breach of contract

• Vicarious liability

• Sovereign immunity

• Charitable immunity

• Volunteer immunity– Note Volunteer Act of 1997

Knowing Who Can Be Sued

• Attorneys are required to sue any and all entities and individuals whom their client could possibly have a legal claim– “Shot-gun”– Most settle out of court to avoid all of the legal

fees

• List of who can be sued (6 “areas”):

• Where can lawsuits arise from?

Automobiles

• Bad idea, but we do it anyway

• If an accident occurs resulting in injury – – Who can be named in the lawsuit?

• Org, driver, owner of vehicle• Org can be sued for negligence in failure to screen

out drivers with poor driving records

What to do:• MVR’s should be run every year on all personnel

who will be transporting passengers (own car or orgs car)

• Drivers with unacceptable MVR should be put on “non-driver” status and prohibited to drive for any reason for the org.

• MVR’s can be obtained from state highway dept.– Present driver’s full legal name, date of birth, state’s

driver’s license number.– Make clear what disqualifies a driver such as:

• More than 3 minor violations or accidents in past 3 yrs• 2 at-fault accidents within 3 years• ANY serious violations in past 3 years (DUI, reckless driving

or 20 mph over speed limit)

Hosting Tournaments/Events

• Require visiting teams to provide a Certificate of Insurance with the following coverage– Accident insurance

• Maximum medical limit of at least $25,000

– General liability Insurance• Certificate should indicate an Each Occurrence limit of at

least $1,000,000, clearly stating coverage exists for participant legal liability

– If visiting team has no insurance you can:• Purchase a special Accident and General Liability Policy for

the event and charge each participating team for their share of the cost

Hold harmless and Indemnification Provisions

• If you lease it…you can be sued!

• Hold Harmless – youth org (the ones leasing) agrees not to bring the facility owner into any lawsuit against they youth org.

• Indemnification – youth org agrees to pay the lawsuit costs (all) of the facility owner if the injured third party sues the facility owner (remember, everyone can be sued!)

– Watch out for facility owners that are too “heavy headed”…they expect too much

• Ex:

– If org is responsible for upkeep and maintenance of facility other than during sanctioned and supervised activities ----make special arrangements with your insurance!

• Usually, a General Liability policy must be purchased for 25/365 coverage• ** Most regular sport org. insurance policies only cover injuries during

sanctioned and supervised activities!

15 most common ways to be sued:

• Spectator Injury

• Participant injury

Help Prevent Losses

• Avoidance

• Prevention

• Reduction

• Contractual Transfer

Techniques used to pay for losses

• Insurance (most common) – safest and most expensive way to pay for losses– .60 for every $1.00 is available to pay for

losses

• Funded Reserve

• Out-of-Pocket

Accident vs. General Liability Insurance

• Accident Policy pays the medical bills on behalf of injured participants– Coverage is usually “excess” meaning pays

what the parents insurance does not.

– 1st line of defense to lawsuits b/c lawsuits are usually about $$

Accident Insurance Cont.

• Max limit should be at least $25,000– Doesn’t cost much more to increase premium

to even $50,000 or even $250,000

• Watch for internal schedule of benefits that further limit certain categories of expenses– Surgeons fees $1000– Daily hospital room $100 per day– Doctor’s visits $20These are poor quality as the pay out is often

50% or less….talk about some upset parents!

Accident Insurance Cont.

• The problem with primary Accident policies.– They seem good b/c they pay without regard

to other collectable insurance BUT,• Rarely effective because:

– Expensive and water down pay out which often results in only about 50% of coverage

Accident Insurance Cont.

• Deductions– Commonly range from $0 - $250 per claim

– If a policy has a deductible, clearly explain to the parents THEYTHEY are responsible for the deductible

• Payout period – the time period the ins. Company will pay incurred bills from the date of the injury– All accident policies have at least a 1-year payout period– When you have a max medical limit of at least $100,000 request

a 2-year payout period.• This should cost an additional 10% of premium, but well worth it

• Most only pay medical bills determined to be usual, reasonable, and customary

Accident Insurance Cont.

• Should cover all adult supervised and league sanctioned (not sponsored) activities– Most do NOT cover non-sporting activities!

• Ex: pool parties

• Should cover everyone, not just athletes– Be careful some companies will try to charge

you extra for volunteer coverage…..– The best ones will cover all volunteers for no

additional charge

General Liability

• Provides an attorney and will pay up to the policy limits for settlement or an adverse jury verdict

• Even if NO negligence is found, the legal defense costs can range from $5000 to $50,000 in many cases

General Liability Policy Cont.

• Should have– Each Occurrence or Per Claim limit of at least

$1,000,000 b/c it only costs about 15% more to increase coverage from $500,000 to $1,000,000

– Watch out for “aggregate limits” that limits the pay out for multiple lawsuits in a 12-month period

• The better policies will not have these

• You need to buy BOTH Accident and General Liability insurance.

– One of the biggest mistakes of youth org is to think you only need one or the other!

• 4 most popular excuses for not purchasing both Accident and General Liability Insurance:

1. Our neighborhood is very affluent and all parents have health insurance

2. We don’t need GL because we have waiver/release forms

3. We don’t need GL because we have waiver/release forms

4. We don’t need GL because a coach certification, homeowners, personal umbrella already protects our volunteers