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Chapter 3 Legal Liability and Insurance

CHAPTER 3
Legal Liability and Insurance
OVERVIEW

Due to the increased number of negligent suits, it is important for individuals


working with athletes to be aware of the guidelines governing liability. Being
familiar with these guidelines allows them to protect themselves from litigation.
Regardless of all of the precautions that are taken it is likely that athletes will
eventually become injured. In the event of injury it is necessary to have the proper
insurance coverage for both the athlete and those individuals that may be caring for
these athletes.

LEARNING OBJECTIVES
After studying Chapter 3, the student will be able to:
Describe the steps that can be taken to decrease the chance of litigation.
Define and explain the legal concepts of liability, negligence, assumption of risk,
and torts including nonfeasance, malfeasance, and misfeasance.
Describe product liability and explain the function of the NOCSAE.
Describe the statue of limitations.
Explain the Good Samaritan Law.
Describe the different types of medical insurance plans including: HMOs, PPOs,
Point of Service, and Indemnity plans.
Describe the types of insurance that are necessary to protect individuals acting
as health care providers (personal liability insurance and error and omission
liability insurance).

KEY TERMINOLOGY

Accident An unplanned event capable of resulting in loss of time, property


damage, injury, disablement, or death
Assumption of risk A written statement that describes the risk in which the
individual assumes responsibility. By signing this statement, the individual
acknowledges the hazards present.
Capitation A form of reimbursement in which the member of managed care
pays a standard fee on a monthly basis regardless of the cost of services
rendered
HMO (Health Maintenance Organizations) A form of medical insurance that
provides reimbursement for 100% of medical costs but limits where the
individual can receive care
Injury Damage to the body that restricts activity or causes disability
Liability The state of legal responsibility for the harm one person causes
another
Malfeasance (act of commission) An individual commits an act that is not
legally his/hers to perform
IM-3 | 1

2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 3 Legal Liability and Insurance

Misfeasance An individual improperly performs an act that he/she has been


trained to do
Negligence The failure to provide the reasonable care that any person with the
same qualifications and in the same situation would provide
NOCSAE (National Operating Committee on Standards for Athletic Equipment)
Establishes the minimum standards for equipment that must be met to ensure
safety
Nonfeasance (Act of omission) An individual fails to perform a legal duty
NFSHSA (National Federation of State High School Associations) Organization
that offers a medical plan to cover costs in excess of $10,000 not covered by
other insurance
Point of Service plan A combination of an HMO and a PPO
PPO (Preferred Provider Organizations) A form of medical insurance that
provides discounted health care but limits where the individual can go for
treatment
Statute of limitations A specific length of time that an individual may sue for
damages
Tort A legal wrong committed against a person by another person

DISCUSSION QUESTIONS
1. What are the legal concerns in athletic health care?
2. Discuss strategies for avoiding litigation.
3. What are the different types of health insurance and what are the benefits and
limitations of each type?
4. How can an individual protect themselves from litigation?
5. What kinds of insurance do you need in order to protect yourself?

CLASS ACTIVITIES
1. Have students investigate personal liability insurance and discuss what kind of
policies they were able to locate. Include details of each policy.
2. Locate several case studies on legal issues in the athletic arena and have a class
discussion on the legal implications of each case.
3. Have students act out several types of situations in which they have to provide
health care and identify the potential areas of negligence.

WORKSHEET ANSWERS
Matching
1.
2.
3.
4.

c
b
a
g

5.
6.
7.
8.

e
h
f
d

Short Answer
9. Liability is the state of being legal responsible for the harm that one causes
another person.
IM-3 | 2
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 3 Legal Liability and Insurance

10.Complaint must establish three things: That a duty of care existed between the
person injured and the person responsible for that injury, that conduct of the
defendant fell short of that duty of care, and that damages resulted.
11.NOCSAE The National Operating Committee on Standards for Athletic
Equipment.
12.Malfeasance: An individual performs a medical treatment not within his/her
legal province and from which serious medical complications developed
Nonfeasance: An individual fails to refer a seriously injured athlete for proper
medical attention
Misfeasance: An individual incorrectly administers a first aid procedure that
they have been trained to perform
Listing
13.Personal liability insurance
14.Errors and Omissions liability insurance
15-18. Any of the strategies listed in the Athletic Injury Management Checklist on
decreasing risk of litigation.
Essay
19-25. Managed Care: A prearranged system for delivering health care that is
designed to control costs while continuing to provide quality care
Health Maintenance Organizations: (HMOs) Provide preventive measures and
limit where individuals can receive care. HMOs generally pay 100% of medical
costs as long as care is rendered at an HMO facility. Many HMOs use a
capitation system that limits the amount that is reimbursed for a specific service.
Preferred Provider Organizations: (PPOs) Provide discount health care but also
limit where a person can go for treatment of an illness. If receiving treatment at
an approved facility all costs are paid. Individuals treated at a facility not on the
approved list may be required to pay for care. PPOs pay on a fee-for-service
basis.
Point of Service Plan: Combination of HMO and PPO plans. Based on HMO
structure, yet it allows members to go outside the HMO to obtain services.
Flexibility is allowed only with certain conditions and under special
circumstances
Indemnity Plan: Provider charges the patient or a third party payer a fee for
services provided. Charges are based on a set fee schedule.

IM-3 | 3
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 3 Legal Liability and Insurance

NAME ________________________
SECTION _____________________

CHAPTER 3 WORKSHEET
Legal Liability and Insurance
MATCHING: Match the following terms with their definition
_________ 1.
_________ 2.
_________ 3.
risk
_________ 4.
limitations
_________ 5.
_________ 6.
_________ 7.
Insurance
_________ 8.

Tort
Negligence
Assumption of
Statute of
Product liability
HMO
Medical
Act of Omission

a. Acknowledgment of hazards in sports


b. Results in unreasonable risk of harm to
others
c. A legal wrong
d. Committing an act that is not legally his/her
to perform
e. A written guarantee that athletic equipment
is safe
f. A contract between an insurance company
and policyholder
g. A specific length of time in which an
individual may sue
h. Provide preventive care and limit where
individuals can receive treatment

SHORT ANSWER: Briefly answer the following questions.


9. Define liability.

10.What is required to prove negligence?

11.What organization is responsible for establishing minimum standards for


equipment?

12.Define and give an example of nonfeasance, malfeasance, and misfeasance.

LISTING: List the types of insurance necessary for an individuals protection


13.
14.

IM-3 | 4
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 3 Legal Liability and Insurance

List four ways an individual can avoid litigation.


15.
16.
17.
18.
ESSAY
19-25. Define managed care and describe the different health care systems
developed to contain costs.

IM-3 | 5
2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.