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The Last Word
Going to the Extreme

Rising risk exposures from extreme sports are driving the need for specialized insurance coverages in the surplus lines market.
  • Lori Chordas
  • December 2019
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Growing interest in extreme sports is creating new exposures for insurers, including potential abuse and molestation allegations, negligence and a rising risk of injuries from traditional and new sports that push human limits.

Every year tens of thousands of thrill-seekers are injured by extreme sports activities such as surfing, rock climbing, skydiving and skiing. Last year, a 20-year-old New Jersey woman died from head injuries sustained from a snowboarding accident at a Pennsylvania ski resort. Several months later, an 18-year-old man from San Diego was paralyzed after a failed attempt at a 32-foot jump on his mountain bike.

Incidents like those are driving some big changes in the insurance industry, including limited coverage for sports and adventure activities with a high level of perceived risk.

Insurers are increasingly placing narrow restrictions on their traditional insurance policies for extreme sports participants based on the type of sport, the dangers associated with it, participation frequency, level of experience and the type of equipment they use.

Also, policies typically exclude coverage for injuries such as head trauma, said Christopher Phillips, a vice president at insurance broker and consultant NFP.

Venue requirements, growing participation rates and rising risk surrounding adrenaline-inducing extreme sports activities are increasingly driving coverage out of the admitted market and into the hands of excess and surplus writers, said president Mark DiPerno.

Last year Charles Merritt, Jay Paul and David Vogeleer created an insurtech called Buddy to provide on-demand accident insurance for active outdoor adventurists. The co-founders, avid skiers, snowboarders and river runners, recognized the struggles participants of those high-risk activities faced with high deductibles and limited coverages. Buddy's guaranteed issue policies, which are purchased online and written on an admitted basis, are provided through National Specialty Insurance and State National Insurance and are backed by Lloyd's.

Extreme sports date back to ancient Greece, but they gained notoriety during the 1990s with the introduction of ESPN's X Games. Since then, there's been a global evolution of new sports with a potential risk of serious and permanent physical injury and even death. In 1998, parkour, or freerunning, was introduced in France as a training discipline that uses movement developed from military obstacle course training and has participants running, jumping and climbing over terrain. Activities like that are creating new exposures, including the rising risk of injuries such as broken bones, paralysis, concussion and death, NFP's Phillips said.

Extreme sports venues, operators and sponsors face a host of potential liability exposures including negligence, gross negligence or recklessness, abuse and molestation, and brand and reputation damage. However, Phillips said courts are doing a fairly good job of containing the limits for which individuals or organizations can seek litigation for those risks.

“Coverages such as general liability, accident medical and umbrella policies can also help mitigate those exposures and protect both owners and athletes,” he said. Phillips also suggests organizers and venues put risk management and safety controls in place, including waivers and hold-harmless agreements. “They also need to create special controls for each sport. For instance, big wave surfing needs protocols for spectators and potential shark attacks,” he said.

Lori Chordas is a senior associate editor. She can be reached at

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