Whether for fund-raising, educational or recreational purposes, special events are a fairly common occurrence in today’s society. It is a rare weekend when some community or civic organization is not sponsoring some type of event. These events can take many different forms, from bake sales to auctions. Given the risk of being sued for accidents, it is prudent for event organizers to obtain liability insurance coverage for these events. In fact, liability insurance coverage may be required as a pre-requisite to holding the event, particularly if permits are required from local governments.
The particular risks inherent in any special event are primarily dependent upon the nature of the event itself. The potential risks involved in putting on a charity golf tournament will differ in nature and scope from the potential risks involved in holding an auction. In addition to risks which may be anticipated, special events, as with so much in life, are not immune from unexpected and freak accidents. For this reason, when obtaining liability insurance coverage for a special event, both the insurer and insured will want a clear understanding of the nature of the event in question and the parameters of the insurance coverage being obtained.
In general, both the insurer and insured will want to define the specific activity being covered, the location(s) where the activity is scheduled to take place, the date(s) when the activity is scheduled to take place, the parties being insured and the risks being insured against, such as property damage or personal injury to participants, spectators and other parties involved in preparing for and putting on the special event. In addition, factors unique to the particular event should not be overlooked. For example, if the event is to take place over several days at different locations, it is necessary to be sure that coverage is provided for all days and all locations. If there are open days during which the events activities are not taking place, consideration should nonetheless be given to whether coverage exists and/or is necessary for event related activities or preparations which may take place during those open days.
Given the variety of events organized for different purposes, it is not possible to address all coverage disputes which could develop as a result of claims arising out of a special event. Most litigation involving liability insurance coverage related to special events does not involve policies written specifically to cover a special event, but instead concern whether injuries arising out of an athletic event fall within a “Sport Contest” or similar exclusion contained in a typical CGL policy. Because athletic contests or tournaments are a common form of special event, the policy provisions which typically come into play in these disputes illustrates some common issues which arise in connection with liability insurance coverage for special events.
Sport Contests exclusions generally provide that the insurance policy in question does not apply to or cover “bodily injury to any person while practicing for or participating in any contest or exhibition of an athletic or sports nature sponsored by the named insured.” Two of the most common disputes surrounding this type of exclusion is whether a particular activity constitutes an athletic or sports contest and whether particular actions constitute “practicing for or participating in” an athletic or sports contest.
More often than not, insurance policies containing Sport Contests exclusions do not define what is meant by an athletic or sports contest or exhibition. When confronted with the issue of whether a particular activity constitutes a sports or athletic contest or exhibition, many courts simply declare that the activity obviously is or is not an athletic or sports contest without providing any detailed reasoning for their conclusion. However, some courts have attempted to define what constitutes an athletic or sports contest.
For example, in Zurich Reinsurance Ltd. v. Westville Riding Club Inc., 82 F. Supp. 2d 1254 (E.D. Okl. 1999), aff’d, 203 F. 3d 837 (10th Cir. 2000), the court concluded that a rodeo event in which participants attempted to remove ribbons from a bull’s horn qualified as a contest of an athletic or sports nature. The court noted that the word “contest” means a competition or a struggle for victory and “sport” is defined as physical activity engaged in for pleasure. The court reasoned that participants in this particular rodeo event were engaged in a physical activity for the pleasure of competition.
In Garcia v. St. Bernard Parish School Board, 576 So. 2d 975, 977-8 (La. 1991), the Louisiana Supreme Court held that a Sport Contests exclusion did not apply to cheerleading activities during a football game. The principal basis for the court’s opinion was that the cheerleading was ancillary to the football game, which was the sporting event intended to be excluded by the policy. However, the court also pointed out that cheerleading during the football game did not involve a contest from which a winner would be chosen. Further, in a statement that may soon, if not already, be outdated, one justice stated in a concurring opinion that:
Modern cheerleading normally involves some gymnastic or acrobatic activity, as illustrated by the activity in which plaintiff was engaged at the time she got hurt. Gymnastics and acrobatics are of an athletic nature. Yet, cheerleading is not ordinarily thought of as an athletic or sports activity as those terms are commonly used. If you ask the parents of a high school student whether their son or daughter participated in school athletics or sports, I do not think they would answer, “Yes, my child is a cheerleader.” The answer more likely would be, “No, but my child is a cheerleader at athletic and sports events.”
In deciding whether a particular activity qualifies a “practicing for or participating in” an athletics or sports contest or exhibition, the courts have provided more guidance. For example, in finding that a jockey was not “practicing for” a horse race when he was exercising a race horse, one court in New Mexico stated in Mountain States Mutual Casualty Co. v. Northeastern New Mexico Fair Association, 508 P.2d 588, 591-2 (N.M. 1973) that:
However, everything that is done to attain or retain a desired degree of general fitness to perform successfully does not fall within the realm of “practicing” for that performance. We are of the opinion that “practicing” in the sense meant by the language of the policy provision quoted above, means performing the same act or acts required in the successful performance of the athletic or sports exhibition or contest in question, or at least the performance of an act or acts so similar as to develop the particular capacities and skills essential to success in that sport or athletic event. Also, the risks and dangers accompanying practice should be the same as those encountered by a participant in an actual contest or exhibition.
Applying similar logic, a Louisiana Court held in Zoller v. State Board of Education, 278 So. 2d 868, 869-70 (La. App. 1st Cir. 1973) that participating in a football team’s off-season weight lifting program was not “practicing” football on the grounds that it was reasonable to “conclude that a person doing weightlifting exercises in off-season, even though under the supervision of his coaches or trainers, is not practicing football, since football practice in the usual sense of the term covers practicing plays, passing, punting, blocking, tackling and the like.”
Ironically, Louisiana has a statute limiting the liability of volunteers for sports activities which defines practice for or participation in those activities as “the actual preparation, training, and participation in contests or games of physical skill, including, but not limited to, post-practice, post-contest, or post-game treatment and follow ups at a school facility, pre-season conditioning programs, teaching or other instructional seminars, team meetings, agility drills, and preparticipation fitness evaluations.
Intuitively, it would seem that determining whether a person was a “participant” in an athletic or sports contest or exhibition would be simple and straight forward. However, courts have been faced with circumstances in which the question of whether an injured party was a “participant” in a sports event required some deliberation and thought. A Michigan court held that [Hockey Club of Saginaw, Inc. v. Insurance Co. of North America, 468 F. Supp.101, 102-3, N. D. Mich. 1979] the referee in a hockey game was not a “participant” in the hockey game because a participant “is actively involved in the contest either individually or jointly with team members,” but the referee “has an uninvolved role and is responsible for the application of the rules to the contest.”
While not exhaustive, the foregoing discussion illustrates some of the tricky coverage issues which can arise in connection with liability insurance coverage for special events. Accordingly, it behooves the organizer of any special event to discuss potential insurance needs in detail with an insurance agent and to seek the broadest possible insurance coverage as part of planning for such an event.