August Member Services E-Newsletter
posted on 08/04/2009

Issue: #15 August 4, 2009

Insurance Issues for Gymnastics Businesses: Understanding Surplus Lines of Insurance

Navigating the world of liability insurance can be stressful and confusing for business owners. Working with a competent and educated sports business insurance agent is key to making sure you stay aware of issues and claims on your policy, changes in industry standards, and potential holes in your coverage as your business grows and changes. USA Gymnastics, along with City Securities Corporation, want to make you aware of trends and issues we see in our industry so that you are better able to ask the necessary questions to your agent and be sure your business is protected.

Recently we have seen a number of issues related to a type of insurance situation called "surplus lines." In general, surplus lines of insurance are policies offered by non-regulated or "non-admitted" insurance companies to clients (clubs) who have tried to get standard insurance through state-regulated or "admitted" insurance companies but have failed due to policies not being available for the type of activities the clients' business offers in their particular state. There have been some concerns recently that some insurance brokers or agents are offering surplus lines of insurance to clients even when adequate state-regulated insurance policies are available. This is a concern primarily because surplus lines of insurance are only offered through non-regulated insurance companies. This means that those insurance companies do not have guaranty funds in place that protect policy holders should the company go out of business, either by choice, by mismanagement, or by bankruptcy. Surplus lines of insurance could leave your business liable for great sums of money should the insurance company not have the funds available to pay your claims.

Surplus lines of insurance policies are not bad or negative in themselves. They are offered legitimately to companies whose activities make their business uninsurable through standard insurance policies. They are a protection or safety net allowable in many states but are meant to be a last resort to businesses who have earnestly sought state-regulated (and therefore state-fund protected) insurance policies but found none that would provide coverage. In general, states that allow surplus lines of insurance allow them only when state-regulated policies are not available at all. If a business selects a surplus line policy simply because it seems more affordable even though a state-regulated policy is available, they have often violated state law as well as made a poor business decision. When there is a state-regulated policy available you should ALWAYS select it over any surplus line policy, even though there may be a significant price difference.

Many business owners have not been aware of these types of laws and this article is meant to be a general and limited discussion of this insurance issue. It is not meant to be a legal and comprehensive review and as such, we encourage you to inquire about your state's laws with your state department of insurance to be sure that your business is protected by legal and adequate liability insurance and that your insurance company and agent are licensed in your state.

Written by Patrick J. O'Connor, Executive Vice President, City Securities Corporation

Edited by Erin Chaktar, Educational Services Coordinator, USA Gymnastics

Understanding Surplus Lines of Insurance

Protect your Business from Insurance Frauds & Scams

2009-2010 Season Now Open

Countdown to National Congress: A Special Offer

National Gymnastics Day - September 12, 2009

Safety Matters: New Safety/Risk Management Handbook Now Available


click course title to register

Safety Certification
Aug 8 - Woodward, PA
Aug 8 - Oakland, CA
Aug 12 - Dallas, TX
Aug 20 - Santa Clara, CA
Aug 21 - Roswell, GA
Aug 22 - Salem, OR
Aug 28 - Edison, NJ
Aug 28 - Okla. City, OK
Aug 29 - College Stn., TX
Sep 4 - Austin, TX
Sep 12 - Baton Rouge, LA
Sep 17 - Schaumburg, IL
Oct 3 - Fairfield, NJ
Oct 8 - Auburn, WA
Oct 22 - Virginia Beach, VA
Oct 25 - Hilliard, OH

Preschool Fundamentals Pt. 2: Hands on Training
Aug 12- Dallas, TX
Aug 16 - Dallas, TX
Aug 23 - Santa Clara, CA
Aug 28 - Edison, NJ
Aug 29 - Florence, AL
Sep 4 - Austin, TX
Sep 20 - Schaumburg, IL
Oct 11 - Auburn, WA
Oct 22 - Virginia Beach, VA

** ** ** ** **

Regional Congresses
Region 1: Aug 21-23 Santa Clara, CA
Region 5: Sept 18-20 Schaumburg, IL
Region 2: Oct 9-11 Seattle, WA
Region 7: Oct 23-25 Virginia Beach, VA

*please check the schedule online to verify course dates and times
Protect your Business from Insurance Fraud and Scams

The National Association of Insurance Commissioners (NAIC) offers these guidelines to help consumers know what types of questions to ask their insurance agent or broker, and which "red flags" you should watch for when you are working with a insurance company. It is a sound business practice to not assume that companies that seem popular or are recommended to you are reputable. Do your own research!

1. Be aware of deceptive sales practices. Companies or agencies may sell illegal products or policies through direct-mail solicitations, newspaper or magazine advertisements, or over the Internet.

2. Verify that the company and the agent are both licensed to sell insurance in your state. Contact your state insurance department and ask the following questions:

  • Is the company licensed in your state?
  • Is the agent licensed in your state and a legitimate representative of the company?
  • Does the company have a good record of handling complaints?
  • Have any complaints been filed against the agent?
3. Check the company's credit rating. Legitimate insurers have their "creditworthiness" rated by independent agencies. An "A+++" or "AAA" rating is a sign of a company's strong financial stability. You can check a company's rating online or at your local public library.

4. The proof is in the paperwork. It is important to keep detailed, written records of all insurance communications, including rate quotes. After purchasing a policy you should receive a copy of that policy - not a photocopy - within 30 to 60 days of purchase. If you do not receive your copy in a timely manner, contact the insurance company or agent immediately. Make sure that you read through your new policy completely. Double-check that everything in the policy matches any quotes you received, and all the numbers you provided on your application (such as participant and staff numbers) are accurately represented. Write down any terms or sections that you find difficult to understand and discuss them with your agent.

5. Watch for these "red flags" that could warn you of possible deceptive sales practices: High-pressure sales pitches from companies or agents who contact you repeatedly, offer "limited-time only" offers, or any one whose style of business makes you uncomfortable or aggravated. Trust your instincts.

  • Companies or agents who brush off or ignore your questions or concerns. If you bring legitimate questions to the attention of your insurer and receive responses such as "don't worry about it," that is a red flag that the agent or company is not interested in making sure you clearly understand your policy.
  • Quick-change tactics. Skilled scam artists will try to prey on your "time fears." They may try to convince you to change coverage quickly without giving you the opportunity to do adequate research. Don't be pressured into making uneducated decisions.
  • Unwilling or unable to prove credibility. A licensed agent will be more than willing to show adequate credentials.
  • If it seems too easy or too good to be true, it probably is!
6. Get more Information. Your state insurance department is your best source for information on company and agent requirements, as well as available products. If you suspect you've been the victim of deceptive sales practices, report it to your state insurance department immediately. You can find links to state insurance department websites, as well as other consumer resources, by visiting Click on "State Insurance Web Sites," then click on your state.
2009-2010 Season is Now Open and New Forms are Available!

The 2009-2010 season is now open. On our newly redesigned website you will find links to download membership forms for all membership types. Online registration is also available with a $5 savings.

Please note - USA Gymnastics is no longer mailing out application forms to the clubs. All membership application forms and information will be available on the USA Gymnastics website. Online registration will also be available for all member types.

Please visit the USA Gymnastics website and watch for Member Services E-Newsletters for the most up to date and current membership information.

We continue to thank you for your support and wish you and your club the most successful 2009-2010 season!

For any questions or concerns please contact:

USA Gymnastics Member Services Department
Phone Hours: Monday 12:30pm-5:30pm eastern daylight savings time
Tuesday - Friday 8:30am-5:30pm eastern daylight savings time
1-800-345-4719 toll free

Countdown to National Congress -- Don't miss this Special Offer! In the August edition of Technique magazine there is a special offer coupon for on-site registration valid for any USA Gymnastics member. Show your coupon at the registration desk outside the Lone Star Ballroom at the Sheraton Dallas Hotel beginning at 12:30 p.m. on Wednesday, August 12th to pay only $285 for three days of outstanding gymnastics education. That's a $50 savings!

The August edition of Technique also contains a complete schedule of sessions and speakers to help you plan to use your time to the fullest at National Congress this year. The schedule is also available on the USA Gymnastics National Congress website.

If you wanted to pre-register but couldn't, or if your plans have changed and you can now attend, we hope you'll come register on-site and join us in Dallas, TX at the 2009 USA Gymnastics National Congress & Trade Show!

National Gymnastics Day -- September 12, 2009 August is already here, and with busy school schedules starting soon it is that much more important to stay focused on fitness and health. In just one month, on September 12, we will be celebrating National Gymnastics Day, and now is the time to get your community excited about the sport of gymnastics!

You can start by organizing a health fair, invite local hospitals and health agencies to set up booths or activity stations for the public to visit and learn about the importance of good health practices. Invite local businesses and eateries that focus on healthy products and services, have a raffle, offer discounts on your club's products and services, and donate contributions to your local Children's Miracle Network hospital.

While hosting your health fair, you can promote your Tyson Fitness Challenge Family Fitness Day and Open House! Hosting a family-focused event will not only introduce people to your gym, but will also help to promote active lifestyles and choices, using gymnastics as the foundation. Make sure your club has registered for the Tyson Fitness Challenge, once you do so, you will have access to many tools to plan your various fitness stations. This is your chance to celebrate the sport of gymnastics! Gymnastics provides a solid foundation of focus, self-confidence, development of strength and control, dexterity and coordination, as well as poise, balance, and grace. It is important to educate your community about the long-term benefits of participation in gymnastics, and will also get the public excited to celebrate National Gymnastics Day with your gym! Have your state's governor as well as your local mayor sign a proclamation declaring September 12, 2009 as National Gymnastics Day in your state and community, and post it in your gym! Scan and fax a copy into USA Gymnastics and we will post it on our website. With your help, we can gather proclamations from all 50 states! Throughout August and September, make sure to document your events, and share your pictures with USA Gymnastics so we can post them on our website!

No matter what the event, be sure to invite local media. Not only does it provide a great advertising opportunity for your club, but it also shows the community your commitment to fitness for individuals of all ages and lets them know that the sport of gymnastics gives back by supporting local industry and donating to local initiatives. So as the school year gets into full swing, eat balanced meals for sustained energy, stay active, and have fun!

Visit the Begin Here. Go Anywhere. website to see examples of how a foundation of gymnastics has lead to success stories in life. If you or someone you know has a story about a life inspired by the sport of gymnastics, please share it with us!


Send your story and photos to:

Remember, with gymnastics as a foundation, you can Begin Here. and Go Anywhere.


Safety Matters: New Edition of the Safety/Risk Management Handbook

USA Gymnastics' Safety Certification program begins its 25th year with the publication of this revised handbook, Gymnastics Risk Management, 2009 edition. The contents have been fully reviewed and updated to reflect the key principles of modern safety and risk management. This information is applicable for the sport of gymnastics as well as all activities that may take place in a gymnastics facility. This handbook is designed to educate gymnastics professionals about the wide range of risk management issues related to the sport of gymnastics. Knowledge of gymnastics safety and risk management principles are important to gymnastics professionals at every level of participation, from coaches to gym owners, and from administrators to judges. The safety of the athletes and the management of risk in all gymnastics activities is every professional's responsibility.

The new handbook is available for purchase through the USA Gymnastics online technical materials store. Individuals who attend the live Safety/Risk Management course will receive the new handbook beginning with the course available at National Congress on August 12 at the Sheraton Dallas hotel. We are also pleased to announce that beginning September 1, 2009 all individuals who take the online course will also receive a copy of the handbook along with their printed certificate. The handbook is meant to be a resource for all gymnastics professionals and we hope it your copy will be put to good use.

Continuing education is most important to everyone's growth and development. All things change, including the legal environment, equipment and apparatus, skill techniques and levels of difficulty. USA Gymnastics' Safety and Risk Management Certification program is one of many educational courses that are offered through USA Gymnastics University. We will continue to be diligent with updates and changes as the sport of gymnastics grows and matures. Additional educational opportunities in the topics of safety and risk management, as well as all other aspects of the sport, are available online and at our annual Regional and National Congresses.


USA Gymnastics is a non-for-profit organization which is the sole national governing body (NGB) for the sport of gymnastics in the United States. Our mission is to increase public awareness of, and encourage participation in, all aspects of gymnastics, and to support athletes in their pursuit of competitive excellence.

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