Coaches and General Liability Insurance

Having general liability insurance coverage is something every coach should seriously consider. Apart from insurance being a sensible risk management tool, it is clear that in our increasingly litigious climate, the coach is not immune to lawsuits. There are many examples in case law where coaches have been included in the initial documents of a lawsuit even though they may later be absolved of allegations of negligence. In fact, most of the recent cases involving injuries in hockey have named the coach of the offending player as a defendant.

A liability insurance policy typically covers costs which one might be legally obligated to pay as a result of bodily injury or property damage suffered by others. Should you be sued, liability insurance can cover the costs of your legal defense as well as any award for damages (up to the limits of the policy) if a court finds you negligent. At the discretion of the insurer, liability insurance might also pay out any settlement which the parties might agree to, in order to avoid the expense of a lawsuit.

Liability insurance can also cover much more than just negligent actions. One can purchase insurance to cover all kinds of situations including business interruption, wrongful dismissal, liability resulting from discrimination or sexual harassment, automobile liability, directors and officers liability, and host alcohol liability, to name but a few.

The coach should ask him or herself two important questions: am I covered, and if so, for what? Unless the coach is self-employed and lacks a provision in their contract requiring the sport organization to provide insurance coverage, most coaches can look to the organization's policy for insurance. But often the organization's insurance is inadequate to properly cover the coach. Check it out by looking at a copy of the policy.

Am I Insured?

The first page of the insurance policy will typically tell who is covered under the policy. It includes the declarations of the policy; that is, the facts and figures of the policy including the broker, the insurer, time period of the policy, expiry date, deductible limits, who's insured and so on. Pay particular attention to the wording for who is insured (also called named insured and additional insured). The named insured will be the organization and perhaps its affiliated associations such as member clubs. Additional insureds should include employees, directors, volunteers, members and participants of the named insured, and perhaps others depending on the circumstances. Make sure the coach is included as an additional insured on the organization's policy. (If, as a coach, you're also a member of the organization, being insured as a member is not sufficient. The insurance coverage goes to the scope of your responsibilities - and your responsibilities as a coach will be quite different than your responsibilities as a member.)

If you don't find yourself covered as a coach in the declarations, look to the endorsement section of the policy. Endorsements typically modify terms or clauses of the policy and you may find yourself included through the wording of an endorsement. For example, the term employee may have been defined under an endorsement to include a coach. At the same time check the exclusions part of the policy. Exclusions are clauses which explicitly exclude certain things or circumstances from coverage. You want to make sure you have not been excluded from coverage, perhaps because of the independent nature of your coaching contract.

What Am I Insured For?

The essence of liability insurance is that the insurer is taking on the financial consequences of a certain risk. Whatever that risk is defines the scope of the insurance coverage. That coverage can be limited by geographic location (i.e., competition outside the country or province may not be covered), by the nature of the activity (only competition may be covered, not training) or by the role of the individual (coaches may be covered but not other volunteers, such as physiotherapists, who are helping out). It is essential to make sure the full scope of coaching activities is covered - a simple way to do this is to have a complete job description.

There is one final thing you should look for in your organization's insurance policy. Many general liability policies cover liability to third parties only. However, for the majority of sport and recreation organizations this is not adequate. A third party liability policy only protects the organization against claims from outside parties - that is, parties who are not named as insureds or additional insureds in the insurance contract. This would mean that if the policy covered different categories of people within the organization such as employees, directors, volunteers, members or coaches, it would not cover a claim by a person in one category against a person in another.

For example, a lawsuit by a volunteer against the organization, by a player against a coach or by a member against an employee would not be covered by liability insurance which is intended strictly for third party claims, where third parties are those who are not named as insureds under the policy. To close this gap the organization must purchase cross-liability coverage. This coverage can also be referred to as a severability of interests or separation of insureds clause in an insurance contract. Such a clause basically allows each insured under a policy to be treated as if he or she had a separate policy with the insurer. This way, the insurance policy will cover a claim or action being brought against any insured by any other insured under the same policy (up to the limits of the policy).

We have touched on only a few aspects of the topic of insurance. If you want to read more, refer to the handbook Insurance: A Risk Management Approach, available through the Centre for Sport and Law.

Originally published: Coaches Report (1997) Vol. 3(4)

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