Excuse #1: We've never had a serious injury or lawsuit in our sports organization. Besides, we're extremely safety conscious.
Reality #1: Such a shortsighted attitude is dangerous -- serious
injuries and lawsuits can happen in any sports organization. It's impossible to predict the future and the risks of being wrong are just too high.
Excuse #2: Our sports organization's volunteers are "bullet-proof" against lawsuits because our state has recently passed a law that provides immunity for volunteers. Also a new federal act gives similar protection if our state doesn't have such a law.
Reality #2: While definitely a step in the right direction, state immunity laws and the
Federal Volunteer Immunity Act doesn't prevent the lawsuits from being filed and it may cost over $10,000 in legal fees to attempt to prove that you are protected. Also, both have loopholes for gross negligence, willful and wanton behavior and acting with reckless disregard for the safety of others. Of course, all lawsuits allege behavior, which falls within the loopholes.
Excuse #3: Our sports organization is protected against lawsuits because we require our players and their parents to sign waiver/release forms.
Reality #3: As far as minor participants are concerned, few courts will immediately dismiss a lawsuit on summary judgment because of the existence of a waiver/release. Even if you were to win on summary judgment, your legal defense costs would still be in the $10,000 to $20,000 range. Therefore, waiver/release agreements won't prevent a lawsuit and do not take the place of General Liability insurance.
Nevertheless, we recommend their use anyway as they can reduce the ultimate settlement amount if the waiver/release is well written to avoid common pitfalls and if the injury is more accidental in nature and not characterized by obvious negligence.
Excuse #4: Our sports organization doesn't need to buy a General Liability policy to protect against lawsuits because each volunteer can provide his/her own protection through Homeowner's Liability, Personal Umbrella Policy, or a Coach Certification Policy.
Reality #4: Many Homeowner's Liability and Personal Umbrella Policies don't cover lawsuits arising out of your actions as a sports volunteer -- read the fine print! Most Coach Certification policies only protect the coach while undertaking "coaching duties" -- this can still leave the coach exposed to lawsuits arising out of injuries to spectators and to players while on nonsport team outings. Also, even if these policies were to provide total protection for the individual, not all volunteers will carry one! Furthermore, none of these policies protect the sports organization itself which may have tens of thousands of $$$ in funds and property that can be lost in a lawsuit.
Excuse #5: Our league and our directors, officers, and volunteers are automatically covered through the insurance offered by the recreation department or municipality.
Reality #5: The standard
General Liability policy carried by a rec. dept. or municipality only covers the rec. dept. and its directors, officers, and employees. However, leagues are a different story. In order for the leagues and their personnel to be covered, the rec. dept.'s General Liability policy must have a special rider or endorsement adding such leagues and their respective directors, officers, employees and volunteers as named insured.
Incredibly, over 50% of the rec. dept. policies that we review leave their leagues and their hard working personnel out in the cold. Even more incredible is the fact that most rec. depts. and leagues aren't even aware of this blunder. Insurance can be so confusing and complicated that it's often easier to bury your head in the sand and just assume that everything is OK!
Excuse #6: Our league doesn't need to buy Accident Insurance to pay for medical bills on its participants since they are all already covered under their parent's health insurance.
Reality #6: National statistics indicate that up to 25% of all children in the U.S. aren't covered by health insurance. Most of these uninsured children come from middle class backgrounds where their parents are self employed and don't have access to affordable group plans. Even in affluent neighborhoods, parent's health policies are subject to cancellation due to layoffs. Even if health insurance is in force, it may be subject to large deductibles of up to $2,500 and coinsurance penalties that require payment of up to 40% of all medical bills.
Also, many HMOs won't pay for medical expenses incurred out of network. This can be a big problem for teams that travel out of town to participate in tournaments. Remember, unpaid medical bills often result in a lawsuit being filed by the injured participant.