There are almost 77,000 amateur sports organizations in the U.S., and now is a busy time for sports leagues, clubs, and organizations. Registration for spring sports like baseball, softball, soccer, track, lacrosse and tennis is just around the corner. Other sports crazes that are growing in numbers are pickleball and adult leagues. Now is the time to go after youth and adult sports organizations, leagues, clinics and camps. Training begins during the winter months to prepare for the season, but before these organizations can begin to register participants and being training and workouts, they need to have the right coverage in place to protect them.
These organizations should have the following coverages in place:
Directors and Officers Coverage
This important coverage should not be overlooked because it is one of the most critical coverages that will protect your organization and your board of directors.
Why Buy Directors and Officers Coverage?
In our litigious society, an organization can be sued whether there is merit to the allegations. Sports organizations can be sued for discrimination, wrong termination of a player or for not following the rules and bylaws of the organization. Many of these organizations do not have the resources to defend these costly claims. The premium for this coverage is minimal compared to the cost to defend a lawsuit. Coverage that includes defense costs outside the limits is optimal, so limits are not exhausted by expensive defense costs.
Many board members for sports organizations are volunteers and parents of the participants. Individual board members’ assets may be at risk. An organization may not be able to indemnify individual board members in the event of a costly lawsuit, which most volunteer board members would not be able to afford. Coverage with additional limits to protect the personal assets of individual board members in the event the underlying policy limits are exhausted is an extremely valuable coverage.
Claim scenario: A team sued their league for not enforcing the rules and bylaws regarding participant eligibility, claiming these rules were breached by another team. The defense costs alone can exhaust the funds of the organization. If the organization’s funds are depleted, they may not be able to indemnify individual board members.
Employment practices can be included along with directors and officers coverage. Many sports organizations do not have employees, but they have volunteers and other individuals who represent the organization. These volunteers interact with other organizations, such as other sports leagues, teams and facility owners. The organization can be sued for the wrongful acts of individuals that do work on behalf of the organization. These lawsuits can come from participants, parents or third-party organizations.
Claim scenario: A volunteer at a sports venue sued the organization for alleged sexual harassment by one of their coaches. Even if the allegation was meritless, the organization will be required to pay costly defense costs to defend the claim. Parents put time, energy, and money into their children’s sports. The impact of the decisions the board makes and how this affects their children and their participation in sports can lead to costly allegations of wrongful acts and decisions against the organization.
- General liability: Includes coverage for spectators, assault and battery and damages to facilities that are rented or leased.
- Claim scenario: A spectator was watching a baseball game and was hit in the face with a foul ball. They needed to get stitches.
- Claim scenario: An organization leased a field and damaged the grass during their practice.
- Abuse and molestation: This is an extremely important coverage for youth-focused organizations. Many carriers are reducing or no longer offering or reducing their capacity. USLI also has resources available to help the organization put procedures in place to protect against these claims.
- Claim scenario: A youth participant alleged a coach engaged in inappropriate contact.
- Accident and medical: This insurance provides financial protection in case of injuries or accidents during sports activities and can help offset expenses and prevent individuals or teams from facing financial burdens.
- Claim scenario: During practice, a participant sprains her ankle and requires medical attention.
- Property and inland marine: Includes coverage for sports equipment, field maintenance equipment and concession stands.
- Claim scenario: An organization’s storage shed was broken into, and the league’s uniforms and expensive sports equipment was stolen.
