Check Your Event Liability Policy for Unneeded Coverage
As a cycling event organizer, you need liability protection, so you go out and buy it. No problem. What you may not have noticed, however, is that your liability policy may have automatically obligated you to purchase an additional coverage - something called participant accident medical insurance. If the fine print says that the participant accident coverage is “excess”, it is almost completely useless. Because the premiums are small and generally lumped in with cost of the liability insurance, many event organizers do not even notice that they are paying for this extra coverage.
Ask your broker if your participant accident medical coverage is excess or primary. There’s a big difference. Excess means that the policy only has to pay if the injured participant has no other insurance that will cover the medical bills incurred. Because most cyclists have health insurance, excess participant accident medical policies are very seldom called on to pay for anything. The coverage is basically illusory.
Before the Affordable Care Act banned all annual and lifetime caps in health insurance policies, there was some justification for excess medical policies. This deceptive coverage is still being foisted on event organizers today, though, simply because it is extremely profitable for the insurers.
A common misconception is that excess policies provide gap coverage, i.e. reimburse the insured person for deductibles, co-pays and other similar out-of-pocket costs imposed by the primary health insurer. That is not true. Injured cyclists often only find this out after submitting a claim and getting a denial letter. The reason is that insurers consider a medical bill paid even if part of the cost has been passed on to the insured through mechanisms such as deductibles and copays. Such transferred costs are considered to have been covered by the primary carrier hence no payment is due from the excess policy.
It’s just one more example of the validity of that old adage: “Buyer Beware.”