Chapter 13 – Legal Liability, Risk, and Insurance Management

1. Chapter 13 – Legal Liability, Risk, and Insurance Management Skylar Lewis Charles Dunbar Carlos Bolanos

2. Legal Liability In Physical Education and Sport • Establishing procedures for health status and preparticipatory medical exams, assessment of baseline fitness levels, prephysical activity and sport orientation, skill progression, and use of protective gear • Educating and reminding the participants of the risk of the activity

3. Legal Concepts Impacting Physical Education and Sport • Tort • A legal wrong resulting in direct or indirect injury to another individual, to property, or to one’s reputation • Negligence • Carelessness; doing something a reasonable person would not be expected to do, or doing something a reasonable person would be expected to do

4. Elements of Negligence • Duty (legal standard of care) • Breach of duty owed • Breach of the duty causing the injury (causation) • Proximate cause (foreseeable consequences) • Damage or harm that is measurable in terms of monetary compensation

5. Defenses to Negligence • Contributory Negligence • When the injured party has done something to contribute to the cause of their injury • Comparative Negligence • The allocation of fault on a percentage basis • Parties are liable for financial resources according to their percentage of fault • Assumption of Risk • The athlete’s knowledge of the risk they’re taking

6. Negligence and Supervision • Reasonable supervision includes the duty to establish minimum and maximum levels of supervision for each supervisor • Questions of liability involving supervision • The extent of the supervision • Evaluated according to the number and type (age, fitness level) of children, and the location • The quality of the supervision • Certification and experience

7. Intentional Torts • Injuries caused by an intended or deliberate act or failure to act • The act is intentional; not necessarily intended to harm somebody

8. Defenses to Intentional Torts • Consent • Actively working to obtain the behavior and/or accepting the behavior • Self-defense/Defense of Others • Fighting to save oneself or another • Necessity/Discipline • Using intentional force because the situation warrants it for the safety and well-being of others or the individuals involved

9. Sport Product Liability • The liability of the manufacturer, processor, wholesaler, retailer, seller, lessor, or anyone furnishing a defective product to the market • Also includes owners and agencies that lease equipment • A product is considered defective when the defect existed at the time the product left the manufacturer

10. Types of Equipment Defects • Contains a manufacturing defect and departs from its intended design even though all possible care was exercised in the preparation and marketing of the product • Defective in design and the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design

11. Types of Equipment Defects (cont.) • Defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced • Fails to comply with safety standards, is a misrepresentation, or is recalled

12. Defenses to Sport Product Liability • Contributory Negligence • Injured party was negligent in the use of the equipment • Assumption of Risk • The athlete’s knowledge of the risk they’re taking • Misuse of Equipment • Using equipment for something other than the intended use • Disclaimers • Provides proper and intended use of equipment • Clearly states where manufacturer liability stops

13. Civil Rights, Sports, and the Courts • First Amendment • Prayer in practice and at games in public school • Fourth Amendment • Search and seizure • Title IX • Gender equity • Americans With Disabilities Act (ADA) • Equal participation for those with disabilities

14. Lawsuit Avoidance Checklist • Preparticipation Medical Examination • Health and Liability Insurance • Preseason Preparation • Acceptance of Risk (Waivers and Consent Forms) • Planning and Supervision • Equipment • Facilities • Emergency Care • Safety Regulations, Standards, and Guidelines • Travel Accommodations/Off-Campus Activities

15. Governmental Functions • Activities of a sovereign nature • Types of Activities • Educational, police protection, and public health • Schools hold immunity, as these events are labeled as a government function • Not liable for negligence on the part of its employees • The doctrine of immunity has been neutralized in recent years • Receives no profit or financial advantage

16. Proprietary Functions • Government functions similar to those of a business enterprise • For the benefit of the constituents within the corporate limits of the governmental agency • Earns profit or advantage of the agency or people it comprises • A governmental agency can be held liable in the same manner that an individual or a private corporation can be held liable • Liable for negligence of the people carrying out the function

17. Fees and Functions • Courts in most states uphold recreation as a governmental function because it is contributing to public health and welfare, and also because its programs are free to the public • The amount of fees placed on activities help to determine whether recreation and sport is a governmental or proprietary function • Incidental fees generally result in an activity being considered as a governmental function • If an enterprise is being run for profit or to create revenue, it will be considered as a proprietary function

18. Liability of the School District • The school district is not held liable for acts of negligence on the part of its management or employees, provided a state statute doesn’t exist • School district is considered an agent of the state because it is working to maintain public schools.

19. Liability of School Board Members • School board members are not held personally liable for any duties in their corporate capacities as board members that they perform negligently • School board members cannot be held personally liable for acts of employees of the district or organization over which they have jurisdiction • School board members may be held responsible for vicarious liability or being indirectly responsible for someone else’s action arising out of legal responsibility

20. Liability of School Board Members (cont.) • School board members can be held liable for a ministerial act (an act or duty prescribed by law for a particular administrative office) even though he or she cannot be held for the exercise of discretion as a member of the board • If the board acts in bad faith and with unworthy motives, and if this can be proven, the board can be held liable • Acts of individual board members beyond their legal scope of duties are ultra vires (beyond their authority) acts, for which they may be held liable

21. Liability of Teachers, Coaches, and Leaders • The individual is responsible for negligence of their own acts • Immunity of a government agency such as a state, school district, or school board does not release the teacher, coach, or leader from liability for his or her own acts

22. Risk Management • The systematic process by which management protects not only the participants from personal injury but also the organization from financial loss through claims for damages

23. Insurance Management • An element of risk management that seeks to divert or shift risk onto another party • Three Major Types of Insurance • Property insurance • Liability protection insurance • Crime protection insurance

24. Recommendations for School Insurance Programs • Try buying cooperative plans with other schools or agencies on a county, district, association, or state high school league to secure less expensive group rates • The greatest possible coverage for cost involved should be an important basis for selecting a policy • A catastrophic clause should be investigated as possible additional coverage • Deductible clause policies should be avoided • Dental benefits are an important consideration

25. Recommendations for School Insurance Programs (cont.) • Determine what claims the insurance company will and will not pay • The school should insist on 100 percent enrollment in the athletic insurance program • Schools and agencies should have a central location for keeping insurance records • An annual audit should be conducted to establish all the pertinent facts about the cost effectiveness and quality of coverage

26. Important Criteria for an Insurance Policy • Maximum medical coverage • Excluded benefits • Maximum hospital coverage • Dental benefits • Dismemberment • Surgery • X-ray • MRI examinations • Physical and rehabilitation therapy

27. Types of Accident Insurance • Commercial insurance policies written on an individual basis • Student medical benefit plans written on a group basis by commercial insurers • State high school athletic association benefit plans • Medical benefit plans operated by specific city or district school systems • Self-insurance

28. Sport and Insurance Coverage • Schools and colleges not required to provide sport insurance programs • Insurance programs should be managed through the business office of the school district, athletic department, or a local or regional broker • Options for Athlete Insurance • Students may purchase athletic insurance (more common option among high schools) • The school or college purchases a policy for student athletes (more common option among colleges)

29. School Sport Insurance • Characteristics of Sport Protection Funds • Nonprofit venture • Not compulsory • Specific fee is charged for each person registered with the plan • Provision is made for recovery for specific injury • Money is generally not paid out of tax funds, but instead from participant fees, the school, or another agency • Some states require physical educators and coaches to have additional insurance against being sued for accidental injury to students and student-athletes

30. The Expanded Scope of Law and Sport • The growth of physical activity and sport has been accompanied by the expanded role that law plays in sport. This growth includes: • Labor and antitrust regulations • Collective bargaining • Contracts • Eligibility • Lease negotiations (parking, advertising, concessions, stadium boxes) • Players and sports team representation • Media negotiations • Sponsorship • Taxes • Worker compensation and salary arbitration • Trademark and team licensing