The ABA Journal of January 27 reported that the National Football League officials, including its Chief Counsel, and the players’ union, including its Executive Director, are engaged in a public relations battle over the impending NFL lockout and work stoppage. While the NFL Chief Counsel is pledging to take an annual salary of $1, the players’ union Executive Director responded by pledging to work for 68 cents if an agreement is reached by the Superbowl.
What are the insurance implications of a lockout? You can get the low-down on the insurance implications of labor disputes in the sports industry in the just published New Appleman Sports & Entertainment Insurance Law & Practice Guide. It points out that those in the sports and entertainment industry routinely purchase non-appearance insurance policies. Non-appearance insurance can be purchased as a standalone policy or as part of a broader event cancellation policy. You can read all about them.
Chapter 17 examines non-appearance coverage, including:
· Coverage provided in non-appearance policies;
· Common exclusions in non-appearance policies;
· The application for non-appearance insurance;
· Examining mitigation in non-appearance policies; and
· Making a claim for coverage under a non-appearance policy.
Chapter 16 is entirely devoted to an examination of event cancellation coverage, including:
· Assessing the scope of event cancellation insurance;
· Examining exclusions from event cancellation coverage;
· Assessing causation issues in the context of event cancellation coverage;
· Considering the insured’s duty to mitigate damages; and
· Considering additional policy provisions significant to coverage, such as avoiding time traps.
So what are the odds that insurance can cover the crushing losses a labor-relations blitz would cause to all parties concerned? After reading the New Appleman Sports & Entertainment Insurance Law & Practice Guide, I wouldn’t bet on it. Coverage is frequently unavailable for event cancellations caused by labor-related strikes. These policies may exclude coverage for "[i]ndustrial action or unrest and labor strikes or strikes by any person." The publication notes, “Event cancellation coverage was not available to the National Hockey League when what would have been the 88th National Hockey League season was cancelled because of the 2004-05 lockout after contract negotiations between owners and the players' union reached an impasse. . . . The unwillingness of underwriters to cover this type of risk stems from the 1981 Major League Baseball strike, when insurers paid team nearly all of the $50 million in strike coverage limits that the teams had purchased.”
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