Insurance in Sports

Insurance in Sports

Insurance is a contract under which one party undertakes, in return for receiving a payment from the other party, to compensate for losses incurred or to pay a specified sum upon the occurrence of an accident or insured event.

The party assuming the obligation is referred to as the insurer; the counterparty is the policyholder; the amount paid by the policyholder to the insurer is known as the premium; and the subject matter being insured is called the insured subject.

Athletes’ Accident Insurance and Conditions for Compensation

Subject of Insurance

Pursuant to Article 4 of the Insurance Act, the subject of insurance may consist of property, whether tangible assets or benefits, as well as any financial right or legal liability.

From a customary perspective, the subject of insurance is generally classified into four categories:

• Property.
• Persons.
• Animals.
• Legal liability.

With respect to property, persons, and animals, the subject of insurance is clearly defined. In property insurance, the insured subject is property, which may be covered against risks such as theft, fire, non-performance of obligations, and similar events.

Personal insurance covers individuals and includes policies such as life, accident, disability, and retirement insurance.

Animal insurance covers the livelihoods of livestock breeders, poultry farmers, beekeepers, and similar professions. In liability insurance, however, the legal liability itself is not directly insured; rather, the risk arising from such liability is the subject of coverage.

Liability Insurance

Under the Iranian Civil Liability Act, any person who, as a result of daily activities, causes damage to others is responsible for compensating such damage.

The subject of civil liability insurance is the compensation of losses suffered by third parties as a result of the policyholder’s fault, negligence, or hazardous activities.

The damages covered by civil liability insurance include bodily injury and property damage.

Some of the most common types of liability insurance include the following:

• Transportation liability insurance.
• Employer’s liability insurance for employees.
• General liability insurance.
• Product manufacturers’ and sellers’ liability insurance.
• Professional liability insurance for physicians.
• Liability insurance for hospital managing directors.
• Professional liability insurance for nurses and paramedical staff.
• Professional liability insurance for engineers.
• Racehorse insurance.
• Liability insurance for hunters and environmental rangers.
• Civil liability insurance for swimming pool managers and lifeguards.
• Civil liability insurance for managers of public venues.
• Civil liability insurance for kindergarten managers.
• Liability insurance for tour and pilgrimage organizers.
• Civil liability insurance for amusement park managers in relation to users.

Exemption from Liability Clause

An exemption from liability clause enables managers or investors to limit their exposure to future damages by including such provisions in contracts. A potential concern is that exemption from legal liability may lead to disregard for legal obligations and a lack of due care in performing accepted duties. Another disadvantage of such clauses is that the contracting party may be required to bear the cost of liability insurance, thereby increasing prices. Among the principal benefits of exemption from liability clauses are reduced concerns about future risks, greater investment, and increased commercial activity. Below, several types of liability insurance relevant to the legal environment of sports are examined.

Employer’s Liability Insurance Toward Workers

All employers are responsible for compensating employees and workers for damages arising from occupational accidents that result in bodily injury or loss of life. Under this insurance policy, compensation for workers’ death, permanent disability, and medical expenses may be covered.

Civil Liability Insurance for Owners of Sports Facilities

If individuals sustain bodily injuries while attending or using sports facilities during training sessions or competitions, and the facility’s management is deemed responsible under applicable regulations, the resulting damages may be compensated through insurance coverage.

Liability Insurance for Lifeguards and Swimming Pool Managers Toward Users

Swimmers in swimming pools are constantly exposed to risks arising from inadequate lifeguard supervision or from defects in facilities, such as gas leaks, electrical hazards, unsafe pool surfaces, and similar hazards. If, as a result of an incident, the lifeguard, the pool manager, or both are found liable, they are required to compensate for the damage, and such incidents are insurable. Although lifeguarding is a high-risk profession associated with significant stress and pressure, substantial shortcomings exist in Iran in providing adequate accident and life insurance coverage for lifeguards. Every year, during the summer season, thousands of lifeguards perform their duties along the northern coasts of the country without any form of insurance coverage.

In many swimming pools, lifeguards also lack insurance protection, as managers, seeking higher profits and cost savings, employ inexperienced lifeguards and pay them lower wages based on federation scales. Lifeguards and swimming pool managers may protect themselves against claims for bodily injury and permanent disability by obtaining liability insurance specifically designed for lifeguards and pool managers. Insurance premiums are calculated based on the surface area of swimming pools and are issued for three-month, six-month, or one-year periods. In Iran, the maximum liability of the insurer for bodily injury damages per person in each incident is equivalent to the full statutory blood money of a Muslim man for the relevant year.

Frequently Asked Questions on Insurance in Sports