While liability insurance protects your organization after an incident occurs, there are some steps that sports organizations may consider in order to reduce the risk of a claim.
Waiver and release agreements are one tool that sports organizations may use to reduce the risk or severity of claims. Signing a waiver warns the participants of risks inherent to the activity in which they choose to participate and triggers the assumption of risk defense; the participant essentially relinquishes the right to file a claim. Having a signed waiver in place protects the organization by concluding a claim early in the process, reducing the expense defense costs and the stress of a potential lawsuit. Sounds simple, right? Unfortunately, it’s a bit more complicated.
A waiver and release is a contract put into place to excuse a party for injuries to a participant that arise out of the known and unknown risks in an activity, such as risks that arise from a sports organization’s ordinary negligence. However, waivers are interpreted by the courts and those decisions can vary widely by state, so it is extremely important to use waivers that are crafted by an attorney with a thorough understanding of sports law.
While the use of a waiver and release may result in the dismissal of a lawsuit on summary judgment, certain criteria must be included in the waiver in order to be upheld by the courts. The waiver should state that the injury arises from risks stated in the waiver and release or from the organization’s simple negligence. The waiver should also be written according to the specific law in the state of the sport in which the activity is taking place and should be crafted so that it does not violate any state law or public policy. The waiver and release should also include types of risk that are known and unknown along with a description of the worst case injury scenario such as permanent disability or death.
Additionally, waivers must be in a font easy to read and in 10-point type; the waiver should be a single document separate from any registration or information forms. Each participant should sign his or her own waiver and have plenty of time to read and comprehend the document; signing a group form in a rush at registration before an event may not give participants adequate time to comprehend the waiver and release. Make sure that a new waiver and release is signed for each registration period; don’t assume that one on file will be valid for a new session.
There are limitations to even the most well-crafted waivers when minors are involved. Minors are not considered legally competent, requiring a parent’s signature on the waiver and release; however, most states will not allow a parent to contractually waive their minor children’s right to sue for a sports-related injury. Again, this concept varies by state and continually changes over time; for a waiver and release to be considered valid, the minor must understand the risk and sign the assumption of risk section for the courts to uphold the waiver. If the sports organization can show that other steps to explain risks to youth participants have occurred, it may help support a waiver and release. Safety should be emphasized and risk of injury explained thoroughly to minor participants.
Additional steps may be taken to show that minor participants understand and assume the risk of sports participation and can help protect the organization. For example, emphasizing safe play techniques and injury avoidance skills as well as providing written safety handouts to minors and parents may support the assumption of risk concept. Signs that encourage safety may also help prove to the courts your minor participants have an understanding of the inherent risk in sports participation. Of course, while bolstering the viability of your waiver is important, the safety of sports participants should always be the number one goal of any sports organization.
Again, hiring an attorney to craft a waiver and release designed for your specific sports organization and including language specific to any state requirements is well worth the expense as a generic waiver and release may not protect your organization adequately. A sports law specialist will understand the specific language that should be included for your unique circumstances, providing peace of mind to your organization and a better understanding of risk to your participants.
The use of a waiver and release document should NEVER take the place of purchasing adequate liability insurance. Purchasing appropriate coverage not only protects you and your organization from financial disaster; it may also provide needed liability coverage for bodily and property damage that occurs to participants, spectators and the facility owner and is often required by the facility. For example, if a spectator trips and is injured while attending your event or if the facility is damaged during setup, liability insurance should cover the damages for which you are legally liable.
Commercial general liability protects the insured against liability lawsuits or claims, from a third party, for bodily injury and property damage arising out of the insured’s operations. Defending your organization against and paying for a liability claim can be extremely expensive. Liability insurance not only pays for damages for which you are held legally liable, but should also cover the cost of investigation and defense of claims, even if they are groundless. Always ask your insurance provider if defense costs are outside of your limits of coverage; if they are included, legal costs may quickly burn through your coverage limits. Commercial general liability may include:
Legal Liability to Participants protects against bodily injury liability claims brought by persons participating in covered sports activities. Professional liability provides protection for claims arising out of the rendering or failure to render instruction, demonstration, direction or advice relating to the sports activity.
Products completed operations generally protects the organization from claims related to the manufacture or sale of products to the public. One common area of concern for sports organizations are concession stands that carry the potential for food-related illness claims.
Personal and advertising injury (covers an injury to a third-party brought about by the insured business advertising its goods and services).
In addition to general liability, some insurance providers offer additional coverages. For example, inland marine coverage, sometimes called equipment and contents coverage, provides coverage for direct loss or damage to sports equipment, field maintenance equipment, concession stand equipment and portable storage sheds.
Other providers may offer medical payments coverage. Medical payments for participants coverage pays medical and dental expenses incurred by a participant when accidental injury occurs while participating in covered sports activities (this coverage is usually on an excess basis, after all other medical coverage available to the participant has been exhausted). This coverage may be included as a coverage offered within the general liability policy or as a separate participant accident policy; make sure to review coverage options to verify where (or if) this insurance is provided in your insurance quote.
Because it is often excluded in standard commercial general liability policies, sports organizations may also consider adding sexual abuse and molestation (SAM) coverage to their general liability policy when purchasing insurance for their teams and events. Purchasing coverage specifically developed to protect sports organizations is an important financial protection and provides liability coverage for sums the insured becomes legally obligated to pay as damages because of loss arising out of actual or threatened sexual abuse or molestation.
Depending on the size and activities of the organization, additional liability coverage and other insurance products such as property, commercial auto, crime, and excess liability may be needed. Working with a licensed insurance professional is always the best option when making decisions regarding complex insurance coverages; an experienced provider will understand how various types of insurance interact to provide adequate coverage.