Public liability insurance, Professional Indemnity insurance, Directors and Officers insurance, Association Liability insurance - they all relate to the area of negligence, litigation and liability, but what is the difference between each type of insurance and what does your sport actually need?

This is a question IEA Sports gets asked regularly, particularly in light of articles in our previous newsletters.  In this article, Rod Hughes, IEA's National Sport Risk Manager aims to provide some answers.  It must be stressed the explanations of cover are very broad, and you will need to read the respective policy documents to understand the scope of cover given by each policy.

At IEA we're often asked to explain the differences in the areas of cover each policy type provides.  It is important to note insurers do not have the same policy wording for each type of cover, so the protection provided can vary from policy to policy even though they may go by the same policy name.

• Public Liability:
  Public Liability Insurance covers liability that results from loss of or damage to property, loss of use of property and death or injury due to negligence.
  
  Claims for negligence claims may be made against the sporting body or they may be made against individuals within the sport who allegedly caused or contributed to the negligence.  Administrators, sports trainers, coaches referees, players etc. can incur personal liability.  A sporting organisation being incorporated does not mean members cannot incur personal liability through their activities in a sport in club.
  
  It is important the liability protection purchased covers the risk specific to sport, such as participation, first aid and member to member liability.  The insurance needs to provide protection to the sporting body as an entity and the personal liability of members and others involved (eg. Administrators, coaches, referees) in addition to players in that organisation.
  

• Professional Indemnity:
  
  This cover indemnifies the insured against claims for compensation for breach of professional duty by reason of any negligence by way of act, error or omission.
  
  Breach of professional duty is excluded under Public Liability insurance.
  
  For sporting bodies this type of insurance cover is particularly relevant to coaches and referees, but also applies to medical staff and other "professionals" involved in sport.  Incorrect advice by a sports controlling body to its affiliates for example, or incorrect decisions by a judiciary, could be interpreted as a breach of professional duty.  As with Public Liability insurance, it is important the cover provided applies not only to the organisation, but also to individuals within that organisation.
  
  Professional Indemnity insurance is a "claims made" policy.  This means only claims made against an insured during the period of a policy are covered no matter when the breach occurred.  However, a generally "retroactive" date is specified which means claims for a breach are not covered if the breach occurred before the retroactive date.
  
• Directors and Officers Liability:
  
  This insurance indemnifies the Directors, Committee members, Trustees, Executive Officers and other Officers of the organisation against "wrongful acts" committed in their respective capacities within the organisation, but excluding any claim made in any way involving injury, sickness, disease or death of any person, or damage to property.
  
  "Wrongful Acts" includes breach of trust, breach of duty, neglect, error and omission.
  
  The insurance cover is comprised of two separate clauses:
  Insuring Clause 1 - Office Bearers - indemnifies the Office Bearers of the Organisation against loss arising from any claim(s) by reason of any wrongful act committed in their capacity of Office Bearer.
  
  Insuring Clause 2 - Organisation - pays on behalf of the Organisation loss for which the Organisation grants indemnification to an insured Office Bearer, as permitted or required by law or the Memorandum of Articles of Association, arising from a claim made against such Office Bearer by reason of any wrongful act committed in their capacity of Office Bearer.

                                                                    Continued.....