Insurance Considerations Must Include Transportation Risk Management | Sports Destination Management

Insurance Considerations Must Include Transportation Risk Management

Jan 01, 2024 | By: John Sadler

A major part of the responsibility of event owners is insurance. Much has been written about the various types of insurance (Accident Insurance, General Liability, Directors & Officers Insurance, Crime Insurance, Equipment Insurance and more); however, there may be some areas that are overlooked. One such example is the transportation of athletes.


One of our youth sports clients was involved in a serious charter bus crash. One child was tragically killed and some 45 others were hospitalized. In addition to the unimaginable pain and suffering of the families, sports organization and community, it resulted in extensive national media coverage.


The use of charter buses is a relatively safe mode of transportation for sports organizations compared to other options. However, catastrophic crashes do occur and can result in serious passenger injuries and/or fatalities. In most cases, the charter bus company carries sufficient auto liability limits to cover the damages. However, that is not always the case, and if an accident should occur, the sports organization can find itself in serious legal jeopardy.


Sports organizations can take steps in advance by adopting the simple risk management precautions discussed here. It is essential to take into consideration these steps (and document that you have taken them) prior to designating a company as your chosen means of travel, official charter partner or anything else.


Photo © Bacho12345 |
Photo © Bacho12345 |

National statistics indicate that traveling in a charter bus is safer than other common forms of travel. A charter bus is 50 times safer than a cari , and twice as safe as air travel. However, serious charter bus accidents always capture intense media exposure, which may inflate the risks in the minds of the public.


ESPN’s “Outside the Lines” studyii found that almost one-third of NCAA Division I schools at the time of the survey used charter bus services that had one or more deficiencies in federal safety scores. Of these 85 schools, approximately 35 used companies with an overall safety rating of “conditional.” This is one step under “satisfactory.”


The U.S. Department of Transportation (US DOT) ratings range from “satisfactory” to “conditional” to “unsatisfactory.” These ratings are issued based on drug testing, record keeping, bus maintenance and driver qualifications. It is recommended that a charter bus service should not be hired unless it has a rating of “satisfactory.”


Most athletic department administrators hire charter buses on the basis of price and availability, rarely paying attention to safety records. However, experts recommend giving safety records top priority, as will be explained later in this article.


Examples of common safety violations that raise red flags include reports of crashes, driver violations, worn tires, unqualified drivers, failure to record entries in logbooks, driving without adequate rest, allowing drivers to operate before passing drug tests and inoperable emergency exits.


The owner and the driver of the charter bus bear most of the legal brunt if something goes wrong. However, the sports organization still owes a legal duty of due diligence in managing the hiring of the company and the supervision of passengers. Charter bus accidents often result in serious injuries or fatalities to multiple passengers. This means it is possible for the auto liability limits of the charter bus company to be exhausted.


Sports organizations and their insurance policies may also be a deep-pocket target of plaintiffs’ attorneys. What if the charter bus company allows its auto liability coverage to lapse or the limits of the policy are breached? Creative plaintiffs’ attorneys will find a way to identify other deep pockets, such as the sports organization or event owner. The following insurance policies could potentially be tapped:


Accident Insurance:iii Participant Accident Policies often provide coverage for not only practice and games, but also group transportation to and from practices and games. Accident policies include medical limits that commonly range from $25,000 to $250,000. However, medical coverage is usually excess to other collectible insurance, such as family health insurance. Accident policies also may include an accidental death & dismemberment benefit which commonly ranges from $5,000 to $20,000.

Non-owned and Hired Auto Liability (NOHA):iv A NOHA policy may be a standalone policy or may be endorsed into a General Liability policy. NOHA liability provides coverage to the sports organization for its vicarious liability arising out of the use of a hired auto, such as a charter bus. Accident victims often allege that the sports organization was negligent in the hiring of a charter bus company with an inadequate safety record, with no insurance, or that they did not adequately supervise the wearing of safety belts by the minor passengers.

To lower liability, take a few additional steps before designating any company the transport service of choice.

1. Select a charter bus company with a satisfactory safety record. Before signing the contract of hire for the charter bus, request the DOT number. Then perform a Safety and Fitness Electronic Records (SAFER) Systemsv search to determine the carrier’s safety rating (satisfactory, conditional or unsatisfactory). This will also verify the carrier is authorized to transport passengers for hire; if the permissible territory of operation is interstate or intrastate; inspection records of vehicles, drivers, and HAZMAT; the crash record, and the date of the last compliance review. Only carriers with a satisfactory safety rating should be hired.

2. Verify adequate insurance. Use the carrier’s DOT number to perform a Licensing and Insurance Verify the required limit of liability insurance and if the carrier currently carries a limit high enough to meet that requirement. A $5,000,000 limit is required by federal lawvii for charter buses that cross state lines and carry 16 or more passengers. The report will provide a list of policies in force from present to past including effective date, cancellation date, insurance carrier name, policy number and limit of coverage.

3. Verify a 24-hour emergency dispatch system. The charter bus company should have a 24-hour emergency dispatch system with live representatives on duty to respond to last minute changes, emergencies and any other unexpected problems that may arise.

4. Wearing seat belts. Sports organizations traveling with youth participants should always provide adequate supervision to avoid lawsuits for negligent supervision. If the bus has seat belts, staff should make sure that all minor passengers are wearing their seat belts. Since November 2016, all newly manufactured buses are required to be equipped with lap and shoulder belts for each driver and passenger seat. viii The sports organization should make its best efforts to select a charter bus with seat belts.

5. Verify driver qualifications. Check that the charter bus company requires drivers to meet these qualifications:

• Possess a commercial driver’s license (CDL)

• Pass a qualifying physical exam within the past two years

• Undergo drug and alcohol testing

• Adhere to DOT out-of-service regulations as follows: drive a maximum of 10 hours after being off duty for eight consecutive hours and not drive more than 70 hours in an eight-day time period. SDM







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