If you are serving a nonprofit organization or coaching a youth sport, it is important to understand the limitations and coverage of the organization’s insurance policy to protect yourself and others. As this following case demonstrates, it is vital to make sure the insurance coverage and the business purpose enumerated in organizational documents, bylaws and operating agreements are broad enough to encompass all activities that are reasonably anticipated to be engaged in by the entity and its volunteers.
The Indiana Supreme Court opinion in Haag v. Castro addresses the scope of coverage of the Indiana Youth Soccer Association’s auto-insurance policy. The Carmel Commotion soccer team, a member of the Carmel United Soccer Club, attended a soccer tournament in Colorado. The out-of-state trip was approved by the Indiana Youth Soccer Association (“IYSA”) of which the Carmel United Soccer Club is an affiliated member. During the soccer trip, the team decided to go white-water rafting as a “team building” activity. On the way to the activity, the team members were in a traffic accident in the van rented by the team’s IYSA-certified coach. Several of the players were injured in the accident and, through their parents, sued the coach and the IYSA’s insurance carrier, Virginia Surety Co., Inc.
Virginia Surety Co., Inc. had denied coverage under its policy with IYSA. The Indiana Supreme Court agreed with the insurance company finding that the coach’s use of the rented van was not “in the business of” the IYSA at the time the accident occurred. The Court held that IYSA’s business is promoting, regulating, and sponsoring competition. Further, the Court held that in order for IYSA’s policy to provide coverage, the rented van would have to have been engaged in one of these three activities. Even though the Carmel Commotion was an IYSA-registered team, the team’s participation and competition in a tournament is the team’s own business, not the business of the IYSA.