Legionnaires’ Disease at Health Club

Source: sadlersports.com - Legionnaires’ Disease at Health Club
Author: John Sadler

The CDC estimates that 8,000 to 18,000 Americans are hospitalized each year after contracting Legionnaires’ disease. Legionnaires’ is a bacterium that thrives in water that is warm, stagnant and unsterile. An individual can only contract the disease by breathing in vapors that carry the bacteria; it cannot be transmitted from person to person. As a health club owner, you can decrease the risk of infecting your patrons by conducting regular water system maintenance.

A 24 Hour Fitness USA located in east Memphis is currently embattled in a $2 million lawsuit filed by Jerome Walsh after he contracted Legionnaires’ disease at the facility. He is one of three persons hospitalized between May 21 and June 21 of this year.

Corporate spokeswoman Robin Rootenberg however, maintains that the 24 Hour Fitness USA facility was regularly cleaned and maintained to industry standards. She also states that the chemicals used for cleaning are industrial grade. A third party has been brought in to conduct testing on the infected area, which currently remains closed. The company is engaged in environmental remediation with a firm approved by the health department.

Health Club and Fitness Club Insurance

Proper insurance is paramount to protecting your health and fitness club in the event of devastating claims such as this.  Which can involve multiple individuals alleging extreme damages.  However, many General Liability policies for health clubs include two exclusions which most eliminate coverage.

 Pollution Exclusion

All General Liability policies include the standard Pollution Exclusion.  A pollutant is defined as an irritant or contaminate in any form (solid, liquid, or gaseous).  So far most courts are reluctant to deny coverage for Legionnaires’ lawsuits when carriers invoke this exclusion as they don’t consider the bacterium to be a pollutant.

Fungi Or Bacteria Exclusion

Many General Liability policies include an endorsement that excludes Fungi or Bacteria which are present within a building or structure with the exception of those that are contained in a good or product intended for bodily consumption.  Since Legionnaires’ Disease is a bacterium, this exclusion could be invoked by the insurance carrier to deny coverage.  However, some courts have upheld coverage depending on the exact location in the facility where the disease was contracted.

Ensure your health club stays protected by adhering to all environmental and industry standard guidelines for the cleaning and maintenance of for your water systems, including Jacuzzis, saunas, and pools.

Visit the Health Club General Liability Insurance   page for website to get a quick quote.  We don’t require you to join an association to qualify for this coverage.

Source – Tennessee Health Club Sued Over Legionnaires’ Disease 

Read Full Story: http://www.sadlersports.com/blog/legionnaires-disease-health-club/

Swim Club Tragedy: Need For Accident and General Liability Insurance

Source: sadlersports.com - Swim Club Tragedy: Need For Accident and General Liability Insurance
Author: John Sadler

Tragedy at North Carolina Swim Club                                          

An accident can happen anywhere, at any time. Recently, 11-year-old Lauren Cecil of North Carolina was electrocuted when a surge of current from a downed power line passed through the pool in which she and two teammates were practicing.

Julie Rhodes, president of the swim club, witnessed the wire fall and land in a parking lot. She described a “popping” noise and puff of smoke, prompting her to send lifeguards to stand guard around the pool and encourage swimmers to exit.  While Cecil’s teammates were able to safely jump out of the pool, she attempted to leave using a ladder. Unfortunately, the ladder served only as a conductor sending a large shock throughout her body.

Lifeguards were initially unsuccessful in retrieving her from the pool as the water continued to transmit electric shocks. Using a body board and kick board to prop her head up, Cecil was eventually removed from the pool and underwent CPR. Attempts to resuscitate her however proved fruitless and she was later pronounced dead at a local hospital.

The Importance of Accidents and General Liability insurance

In the insurance industry we are in the business of expecting the unexpected. Crazy things happen every day. Tragedies such as those that befell Lauren Cecil are not unheard of, and it is important to protect your swim club or fitness facility in the event of an accident. General Liability and Accident insurance are the best form of protection for ensuring that your organization and its administrators, staff, and participants do not suffer a serious financial loss as the result of unforeseen circumstances.

Source: 11 year old North Carolina Girl Electocuted While Swimming In Pool

Read Full Story: http://www.sadlersports.com/blog/swim-club-tragedy-accident-general-liability-insurance/

General Liability Basics For Sports / Recreation Associations

Source: sadlersports.com - General Liability Basics For Sports / Recreation Associations
Author: John Sadler

General Liability is perhaps the most important insurance policy for sports and recreation organizations due to the prevalence of spectator injury and participant injury claims. Likewise, it is the most difficult policy to place due to the limited number of insurance carriers in the marketplace that offer quality coverage forms. There is a perception in the insurance industry that sports and recreation organizations generate a higher than normal risk of severity claims and are difficult to underwrite. However, in recent years, several new carriers have entered the marketplace resulting in more options than in past years.

General Liability policies cover certain lawsuits alleging “bodily injury” (ex: spectator injury or participant injury) or ”property damage” caused by an “occurrence” which are not subject to the standard policy exclusions or non-standard exclusions that may be added by policy endorsements. In addition, the policy responds to certain lawsuits alleging “personal injury” (ex: slander, libel, invasion of privacy, false imprisonment, etc.) and “advertising injury” (ex: disparagement of a third party in advertising material). The policy provides an attorney for legal defense and will pay up to the policy limits in the event of settlement or adverse jury verdict.

Occurrence vs. Claims Made 

A sports / recreation organization should always purchase an “occurrence” policy form instead of a “claims made” policy form whenever possible. The superior “occurrence” policy form pays covered claims as long as the policy is in force when the injury occurs. It does not matter if the policy is subsequently cancelled and if a claim is later filed after the policy expiration date. On the other hand, the inferior “claim made” policy form pays covered claims only if 1) the policy is in force when the injury occurs and 2) the same policy, a renewal policy with a properly set “retroactive date”, or an expired policy with an “extended reporting period” is in effect when the claim is filed. A “claims made” policy is risky for a sports / recreation organization because a participant who is a minor can wait until the age of majority (usually 18 in most states) plus an additional two years for the statute of limitations to run before filing a lawsuit. In some cases, this could be a period of 15 years. “Claims made” policy forms provide too many opportunities for problems to arise if a new carrier is selected upon renewal (and if the insurance agent does not know how to coordinate the “retroactive date”) or if the policy is non renewed or cancelled due to nonpayment of premium. See prior blog post on issue of occurrence vs claims made.

Definition Of Bodily Injury

The standard ISO definition of “bodily injury” is “…bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.”

Some carriers offer an important General Liability endorsement to broaden the definition of “bodily injury” to include mental anguish, mental injury, shock, fright, humiliation, or emotional distress or death resulting from bodily injury, sickness or disease.

Common Policy Limits

A General Liability policy should include the following basic limits of coverage at a minimum:

Each Occurrence:  $1,000,000

General Aggregate: $2,000,000

Products / Completed Operations Aggregate: $1,000,000

Personal / Advertising Injury: $1,000,000

Damage To Premises Rented To You: $300,000 (also known as Fire Damage Legal Liability on older policy forms)

Premises Medical Expense Payments: $5,000 (does not apply to injury to athletic participants)

The following additional limits may appear on some policies: 

Participants Legal Liability: $1,000,000

Sex Abuse / Molestation Each Claim: $1,000,000

Sex Abuse / Molestation Aggregate:   $1,000,000

Non-Owned And Hired Auto Liability:  $1,000,000

Employee Benefits Liability: $1,000,000

Subsequent posts will explore policy limits and component coverages in more detail.

Read Full Story: http://www.sadlersports.com/blog/general-liability-basics-sports-recreation-associations/

Transfer The Risk Of Loss To Others In Your Sports Contracts

Source: sadlersports.com - Transfer The Risk Of Loss To Others In Your Sports Contracts
Author: John Sadler

There are two common situations that arise where local sports organizations need to be careful to protect themselves from assuming the risk of loss (ex: bodily injury to spectator / player and property damage liability) that should fall upon the other party. These situations occur with field / facility owners from which practice and playing fields are leased and with vendors which provide critical services to the sports organization. When the negligence of these parties is the cause of injury to a third party, you want them and their insurance carriers to be responsible for providing legal defense and paying any damages. One of the best ways to achieve this result is to make sure that you have a contract in force with them that specifies this outcome. Of course, this requires a simple contract review (lease agreement and vendor services agreement) and the need for occasional negotiation of provisions as regards insurance requirements and hold harmless / indemnification.

To follow are prior blogs that provide clear instructions on how to deal with these two situations:

Before You Sign The Sports Facility Lease Agreement

Collect Certificates Of Insurance From Your Vendors

Read Full Story: http://www.sadlersports.com/blog/transfer-risk-loss-sports-contracts/

Products / Completed Operations Limit For Sports And Recreation Organizations

Source: sadlersports.com - Products / Completed Operations Limit For Sports And Recreation Organizations
Author: John Sadler

The primary General Liability exposure for most sports and recreation associations and their members is for injuries to spectators and participants. However, another important exposure that needs to be addressed is the lawsuit potential that arises from the sale of products and from completed construction operations at the facility.

The General Aggregate limit is an annual cap on covered “bodily injury” or “property damage” losses that occur on owned or rented premises. On the other hand, the Products / Completed Operations Aggregate limit is an annual cap on covered “bodily injury” and “property damage” losses that occur away from premises owned or rented and that arise out of “your product” or “your work”.

Products that are typically sold by sports organizations include concession foods / drinks, t-shirts, equipment, and fundraising products. On occasion, such products are defective and result in injuries to purchasers and other members of the public. Examples include food poisoning (off premises) and injuries from the sale of sports equipment such as helmets, kayaks, etc.

Work (ex: construction operations) performed by staff or by hired contractors may include the building of sheds, bleachers, fences, and other structures. Such work may initially be on premises owned or rented by the sports organization but the sports organization may later sell the premises or discontinue the lease. Completed construction operations may later result in injuries such as from bleacher collapse, electrocution from faulty wiring, and fire from faulty wiring.

Products / Completed Operations is an important coverage as most sports and recreation organizations do have an exposure for product sales and work.

Read Full Story: http://www.sadlersports.com/blog/products-completed-operations-limit-sports-recreation-organizations/

Each Occurrence vs General Aggregate Limit For Sports / Recreation Organizations

Source: sadlersports.com - Each Occurrence vs General Aggregate Limit For Sports / Recreation Organizations
Author: John Sadler

The difference between the Each Occurrence vs General Aggregate limits is often a point of confusion for sports / recreation sanctioning / governing associations and their members. If the General Aggregate limit is larger, it is tempting to think that such limit is the actual amount of coverage for any one lawsuit. However, that is not the case. Also, some carriers may quote a policy showing “none” under the General Aggregate limit. In this case, “none” is actually a good thing for the insured.

The Each Occurrence limit caps the payout of losses arising from any one occurrence or accident. A single occurrence could involve injuries to a single claimant or to multiple claimants (ex: lightning strike, bleacher collapse). The General Aggregate limit caps the payout of losses that arise throughout the policy year from multiple occurrences. It is the insurance industry standard that the General Aggregate limit should be twice the Each Occurrence limit.

To follow is an example to illustrate how these limits work:

Assume that the Each Occurrence limit is $1,000,000, the General Aggregate limit is $2,000,000, and three claims occur sequentially in the policy year with total liabilities owed of $1,200,000, $600,000, and $800,000 respectively. As regards the $1,200,000 claim, the carrier would only pay $1,000,000 of this claim due to the $1,000,000 Each Occurrence limit and the sports organization (and possibly its administrators and staff) would be “out of pocket” for the balance of $200,000. As regards the $600,000 claim, it would be paid in full as it is under the Each Occurrence limit and has not tripped the General Aggregate limit. As regards the $800,000 claim, the carrier would only be responsible for paying $400,000 of this claim since any amounts in excess of $400,000 would trip the General Aggregate limit of $2,000,000 for all claims during the policy period.

Sports organizations with large number of participants or teams would be better served by not having a General Aggregate on their policy (designated by a showing of “NONE” on the policy) or by having a special endorsement that reinstates the General Aggregate per team, league, or event.

It is also common to see a single master General Liability policy covering an entire sports association or sanctioning body and its member teams / leagues under a single General Aggregate limit. This is dangerous since those filing claims later in the policy year may find that they have no General Aggregate limits left to pay their claims.

It is critical to understand the difference between the Each Occurrence vs General Aggregate limits when designing a protection program.

Here is a prior blog post on Each Occurrence vs. General Aggregate that describes this issue in a little different terms.

Read Full Story: http://www.sadlersports.com/blog/occurrence-general-aggregate-limit-sports-recreation-organizations/

Selection Criteria For Insurance Agents / Brokers: Sports / Rec Orgs

Source: sadlersports.com - Selection Criteria For Insurance Agents / Brokers: Sports / Rec Orgs
Author: John Sadler

A prior blog posting explained why it is not a good idea for a sports and recreation organization such as a sanctioning / governing body association to follow the traditional insurance bidding process of allowing multiple agents to approach the limited marketplace of insurance carriers and MGAs. Now, to follow is some suggested selection criteria to choose the most qualified agent / broker so that such agent can approach the entire marketplace.

Insurance Agency Qualifications:

* Special department dedicated to sport and recreation insurance risks

* Number and names of similar sports / recreation organizations insured

* Premium volume of similar sports organizations insured

* Carriers or MGA’s represented for each policy type

* Premium volume and special relationships with each carrier / MGA to be approached

* Resumes of key servicing staff including experience in sports / recreation insurance niche

* Specific staff that will be assigned to service account

* Claims management services

* Loss analysis, forecasting, and rate justification services

* In house authority to issue certificates of insurance

* Injury tracking services and automation

* Training on employee injury reduction, premises safety, auto safety, special events safety, etc.

* Special risk management services for sports and recreation organizations

* Agency license for both Property & Casualty and Life, Accident, & Health for all states of  organization’s operations

* Web site services including online enrollment; self-issuance of certificates of insurance; educational blogs; risk management reports, forms, articles, programs, etc.

Insurance Agent Qualifications:

* Resume of insurance agent

* Number of years of experience in insurance industry

* Number of years dealing with sports and recreation accounts

* Title or position within insurance agency

* Ownership in insurance agency

* Special training and designations such as CPCU, CIC, etc.

* Producer license for both Property & Casualty and Life, Accident, & Health for all states of organization’s operations

* Carriers / MGA’s to be approached for each policy type

* Names and contact information of similar sports / rec organization clients for reference check

* Membership in professional trade organizations in insurance industry

* Board of director positions or committee assignments on behalf of sports / recreation organizations

* Publications on insurance and risk management on behalf of sports / rec organizations

* Number of proposed client meetings throughout year to review insurance and risk management programs

* Renewal strategy philosophy

* Disclosure of commissions and fees earned

* Meetings / trade shows / speaking engagements on behalf of organization

Carrier / MGA Qualifications:

* AM Best rating for financial strength

* Number of years in sports / recreation insurance niche

* Number of similar sports / rec insurance clients

* Premium volume of similar insurance clients

* Names of similar sports / rec insurance clients

* Philosophy on acceptable loss ratios

* Claims services offered

* Risk management services offered

* Licensed in all states where organization operates

* Other services provided

** MGA is an abbreviation for Managing General Agency. An MGA is an insurance organization that provides some of the services that are normally provided by insurance carriers in exchange for a fee. Examples of common MGA services include underwriting, policy issuance, loss control, claims administration, and marketing. The MGA as a middleman does not increase the cost of doing business since they provide services that the insurance carrier would be required to otherwise provide. Therefore, the existence of MGA’s reduces the expenses of the insurance carriers.

 

Read Full Story: http://www.sadlersports.com/blog/selection-criteria-insurance-agents-brokers-sports-rec-orgs/