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Insurance Program Update 2014

In the past, IMBA offered a national general liability insurance program for chapters and supporting organizations, but that program ceased to operate on February 28, 2014. IMBA made a concerted effort to replace the national policy, conducting more than six months of research into new providers, and paying for two temporary policy extensions. Nonetheless, our broker could not find a new underwriter willing to insure the program under terms and cost similar to those IMBA had previously offered.

It is not likely that IMBA will have a national single insurance program the way it was structured previously.  Instead, we are investigating a restructured approach to our collective shared-risk management strategy. There are options for new forms of coverage that IMBA is pursuing aggressively. Our goal is to restructure an insurance program for chapters with affordable premiums.

IMBA will continue to update chapters and supporting organizations with advice on next steps. To begin, please carefully read the following FAQ. Thank you for your understanding and patience.

Frequently Asked Questions About Insurance for Chapters

Q: Why are insurance costs going up?

A: The escalating cost of insurance for IMBA chapters is the convergence of three things: 1) being dropped by two different underwriters, and thus being forced to shop the insurance market for an underwriter; 2) a “hard insurance market” coupled with some large claims currently pending which, combined contribute to the rapid rise of the cost of liability insurance. Of course, in the mind of an underwriter any pending claim is an indicator of higher risk; 3) the likelihood that chapters and clubs will not be able to reimburse IMBA for their share of the national program premium if those premiums increase twofold, threefold or more in a short timeframe.

Q: Has the outlook for IMBA’s insurance offerings changed forever?

A: IMBA will continue to look at a new and restructured insurance program informed by improved risk management that limits our liability exposure. Our former national program policy expired at the end of February, 2014. Chapters and clubs have taken steps to secure their own liability insurance policies based on local program needs. Many chapters have secured coverage at affordable premiums, in some cases for less than they had paid under the defunct national plan. IMBA will help its chapters in sourcing brokers for the chapters' liability insurance needs. 

Q: Why does the whole program suffer the impact of claims and then higher premiums?

A: The answer is partly a structural one. The former insurance program was structured as a shared-risk pool where IMBA owned the policy and each chapter and club was a named as additional insured. When our policy was impacted by claims, everyone under the IMBA program and policy was affected because of the shared-risk pool approach. Please be mindful that claims are not legal judgments whereby a court of law determined negligence and thus found liability (or blame) resulting in some large payment to the injured party. These claims are pending and most likely will be successfully defended whereby there is no liability and payment to the injured party. Nonetheless, the existence of these claims can drive rates dramatically upward. 

Q: Without a national program option, what can IMBA do to help my chapter find new coverage?

A: IMBA has found at least two reputable brokers willing to sell general liability insurance products directly to chapters.

Q: What is IMBA’s advice for chapters seeking insurance?

A: Here is some guidance for your organization to consider when shopping on your own: it covers what you do as a trail building and advocacy organization:

  • The policy classification should reflect what you are and what you do, e.g., most chapters are NOT professional trail building organizations. Most chapters are a mountain bike organization conducting trails conservation, advocacy and stewardship activities under the auspices of a land manager. This is a distinguishing element. Think in terms of other trail stewardship groups like the Youth Conservation Corps. Is your chapter more like that in its trail activities or is it actually doing professional, paid trail design and construction services? Trail stewardship is very different from construction of trails in the minds of insurance underwriters.

  • There are a growing number of chapters that conduct professional-level or fully paid trail building and construction services and may need to bolster their insurance coverage with a general liability policy equivalent to the insurance a professional trail building company would carry.

  • Most chapters conduct events, both riding-based events and non-riding (fundraising) events. General liability policies may or may not include events as part of a general liability policy.

  • Personal Injury/Advertising Injury should be included for organizations that conduct professional-level trail building operations. In these cases members should be protected from liability for trail construction.

  • The insurance policy should state that specific premises owned or leased are covered. In many cases, chapters have MOU’s/agreements with the landowner that define the liability of different partners. Chapters should not enter into agreements that shift liability disproportionately away from the land manager and direct it to the chapter.

  • There should be no restriction on the definition of “loading and unloading,” especially for chapters with intensive trail building programs, as trail construction equipment requires this activity.

  • The athletic or sports participant exclusion needs to reflect the race environment (most general liability policies don’t cover race events) and not be broad enough to not cover other ride type events.

  • Products/Completed Operations, which is the basic hazard for the contracting exposure, should be covered for trail building chapters. Trails, and technical trail features — often referred to as TTFs — are considered products.

  • The policy should not redefine “insured contract” to remove tort liability.

  • The policy should be inclusive of assault & battery, punitive damages and liquor liability (including host liquor).