Every outfitter or guide requires its guests to sign liability indemnity waiver forms. In the example above, Gary and his wife probably signed waivers for both themselves and for their children. The parents of the three other children would have also signed waivers. However, according to Mike Larkin, chief underwriting officer at Leisure/Sports Specialists, “Each state has a history of either upholding waiver and release forms or not enforcing them. Each state also has case law and statutes that guide how much of a defense is afforded by assumption of risk defenses. Finally, each state has its general legal climate.” This climate factors into the pricing and availability of coverage in a particular state.

General liability coverage for outfitters and guides is written on both admitted and nonadmitted paper, with limits of $1,000,000/$2,000,000 being common, according to Michael Dean, head of marketing and product development at Francis L. Dean & Associates. Lou Valentic, chief marketing officer at K&K Insurance Group, Inc., says, “Outfitters typically buy a $3,000,000 excess or umbrella over the $1,000,000 primary," but, according to Mr. Dean, that is often the biggest coverage gap for many outfitters and guides.

According to Mr. Larkin, another significant gap is the exclusion of injuries to athletic participants in many general liability policies. He says, “Any market that specializes in sports insurance should be able to address this critical coverage.” Mr. Valentic believes that participant accident medical insurance, rather than relying on the general liability coverage with underlying medical payments, is very important “because it can quickly pay participant’s medical bills which serves to reduce litigation.”

Mr. Dean points out that, “The accident medical Insurance for the participants is a great supplement which can reduce the med pay exposure to the liability coverage.” Mr. Larkin agrees and points out that it is “akin to med pay for athletic participants but is not a liability coverage and does not require negligence to trigger the coverage.”

Another coverage that should be considered is inland marine. According to Mr. Valentic, inland marine coverage is important because many outdoor recreational risks move their equipment around from location to location.

Damon Pesce, marketing manager at Maritime General, provides a different perspective. Since his company writes only charter boats and fishing guides in the outfitter and guides category, the vital insurance for his clients are the ocean marine coverages provided under Protection and Indemnity, Jones Act and Hull insurance. In addition, he states that “fuel spill liability, uninsured boat liability, personal effects, towing and assistance charges and trailer coverages are all important.”

An interesting development in the recreation industry is the increase in the number of physically disabled and mentally challenged individuals participating. This is a particular concern for a number of reasons, according to Mr. Larkin. He says that, “The disabled will always be a sympathetic claimant but even worse is that what might be simply a serious injury could easily become a devastating injury." For example, loss of one eye is a serious event but it is life changing for the person who had sight only in that eye. He continues, "Any insured working with the disabled must be certain that the activity is a reasonable undertaking.” Glenn Sudol, president and underwriting manager of Gillingham & Associates, says that he “likes these risks because the ratio of guides or supervisors to participants is much higher than normal and the attention to safety is also much higher." He believes his company has a competitive advantage with these risks because they are “less attractive to the standard markets.” Mr. Valentic says that his company doesn’t look at just this one aspect of a risk. He says that “its insureds all take appropriate actions to care for all customers at all times. If an insured takes the proper precautions, the risk qualifies for coverage.”

Mr. Sudol notes that he sees an increase in requests to cover specific events or outings for the handicapped, most notably for handicapped veterans to participate in hunting and fishing outings. He also sees an increase in business for challenged youths but observes that this is a difficult class mostly insured in the London market.

Other types of risk are also more challenging to underwrite. Mr. Valentic identifies risks that transport participants in 15 passenger vans or busses, along with sports camps that have rope or challenge courses as two of them. Outfitters and guides who operate in unclassified waters are underwritten closely, while operators running in a class 5 rapid pay a higher rate than those operating in a class 1 or 2 rapid. Mr. Dean indicates that policy construction is another area of concern. He notes that many insureds engaged in outdoor recreation activities purchase seasonal coverage rather than on an annual basis. Doing so increases the importance of writing coverage on an occurrence coverage form instead of on a claims-made coverage form.

Our experts say that pricing in this market is softening, but not significantly. Prices are generally flat or decreasing by only 10% or 20%, depending on the class and the coverage provided. As Mr. Dean shares, “The pricing remains somewhat flat as appetite for these risks varies based on the insured, and there are not many new insurers jumping in or out of the marketplace.”