Warning: Anyone Can Sue

There seems to be multiple misconceptions that I hear over and over again. I’ve been told by many people in the sports industry that they require sport and recreation participants to sign a waiver and so they can’t be sued. There are other misconceptions as well in relation to insurance and lawsuits. I’ve heard people say that they don’t have insurance because if they did, people would sue in order to go after the insurance. I’ve also heard people deny being sued, but explain that the insurance was sued. Hopefully, the following explanation can help in clearing up any misunderstandings.

First, anyone can file a lawsuit. They may choose not to name a party because a waiver was signed, but often times the fact that a waiver was signed will do nothing to deter the Plaintiff from filing a lawsuit. The waiver may allow Defendant to succeed in filing a motion for summary judgment and be dismissed from the lawsuit before trial. Even so, the cost of hiring an attorney to do this could be thousands of dollars. If a lawsuit is filed, the defendant will have to file an answer and defend the lawsuit. Doing nothing will result in a default judgment and being required by law to pay the amount for which suit was brought.

Second, a lawsuit may be filed whether or not someone has insurance. If there is no insurance, perhaps the individual or company may have assets. When a lawsuit is filed, even though the defendant’s insurance company may provide a defense and indemnification up to the applicable policy limits, it is the individual or company that is usually being sued, not the insurance company.

Third, If the person or company doesn’t have sufficient insurance coverage, there may be personal exposure for any judgment over the policy limits. Hopefully, the above is not too confusing. The bottom line is that it is a good idea to consider the issues of waivers and insurance coverage with your risk management professional, insurance broker and/or attorney.