Insuring Athletes: Safeguarding Talent and Mitigating Risks
Bahrain Judgment 23 of 2019
In sports, athletes push their bodies to the limits, showcasing incredible skill, dedication, and determination. However, with the physical demands and inherent risks involved, injuries can occur, jeopardizing careers and financial stability.
Law Update: Issue 362 - Sports and Event Management
Fatema SarhanSenior Associate,Dispute Resolution
Ayman HaiderTrainee Lawyer.Dispute Resolution
In the world of sports, athletes push their bodies to the limits, showcasing incredible skill, dedication, and determination. However, with the physical demands and inherent risks involved, injuries can occur, jeopardizing careers and financial stability. As a result, insurance plays a crucial role in protecting athletes from potential setbacks. This article will explore the field of insuring athletes from injuries and the significance of insurance coverage. This article will discuss a case involving an injured professional horse rider (Bahrain Chamber of Dispute Resolution Action 23 of 2019) and the relevant considerations when making an insurance claim.
Athletes are susceptible to a wide range of injuries, from sprains and fractures to more severe conditions. Such injuries can result in medical expenses, loss of income, and even permanent disability. Insurance for athletes helps mitigate these risks, offering financial protection and support during challenging times. By securing appropriate coverage, athletes can focus on their performance and peace of mind, knowing that their future is safeguarded.
There are various types of insurance products available to address sports injuries and protect athletes. Sports injury insurance is specifically designed to cover medical expenses, rehabilitation costs, and loss of income resulting from sports-related injuries. It provides comprehensive coverage for athletes, addressing both minor and major injuries. This type of insurance is essential for athletes participating in high-contact sports such as football, rugby, and martial arts.
Another important insurance product for athletes is disability insurance. It offers protection in the event of a career-ending injury that results in permanent disability. This coverage ensures that athletes who can no longer participate in their respective sports due to a covered disability receive financial support. It allows them to maintain their standard of living and access necessary medical care even after their sporting career concludes prematurely.
In addition to sports injury and disability insurance, income protection insurance is also crucial for athletes. This type of coverage replaces lost income due to injury or illness that prevents athletes from participating in their sport. It offers regular payments during the recovery period, providing financial stability and allowing athletes to focus on their rehabilitation without worrying about their financial obligations.
In a recent case that underscores the importance of securing insurance coverage, a professional horse rider (the Insured) suffered severe injuries when he fell from his horse. As a result, the Insured’s wife filed a claim with the insurance company.
The insurance company rejected the claim, and subsequently, the case was brought before the Bahrain Chamber of Dispute Resolution (Case No. 23 of 2019). However, despite the Insured's proactive action, the court ultimately rejected the case due to the statute of limitations outlined in Article 722 of Law No. 19 of 2001 (the Bahraini Civil Code). Article 722 establishes a time limit of three years for insurance claims.
The court in this case also highlights the statutory provisions (Articles 686 and 784) on life insurance which dictate that the insurer must pay the insured sum upon the occurrence of the event or realization of the risk specified in the contract, subject to no restriction or condition and without the insured or beneficiary having to provide proof of the damage suffered.Article 686 of the Civil Code provides: “Insurance is a contract whereby the Insurer undertakes to pay to the Insured or the beneficiary a sum of money or annuity or any other pecuniary payment upon the occurrence of the event or realization of the risk specified in the contract. Such contract shall be made against payment of a cash consideration by the Insured to the Insurer.”
Article 724 of said law provides: “Sums which the Insurer undertakes to pay, in the case of life insurance, to the Insured or to the beneficiary, upon the occurrence of the event insured against or on the maturity date stipulated in the insurance policy, shall become due from the time of occurrence of the event or upon maturity, without it being necessary to establish that the Insured or the beneficiary suffered any loss.”
The insurance company argued that according to Article 722 of the Civil Code:
Cases arising from the insurance contract shall not be heard upon the lapse of 3 years from the occurrence of the event from which such cases arise unless the law otherwise provides. However, this time limit shall not be applicable:
In case of withholding information relating to the insured risk or providing untrue or inaccurate details about such risk except from the date on which the Insurer becomes aware thereof.
In case of the occurrence of the insured event except from the date on which the concerned persons became aware of its occurrence.
When the Insured's cause of action against the Insurer arises from recourse by third parties except from the date of filing the legal action by such third party against the Insured or from the date on which the third party receives a compensation from the Insured.
In this case, the insurance company argued that it is well settled that fraud invalidates legal acts, a maxim founded on ethical and social considerations of combatting fraud, trickery, and deception. The fact is that the Claimant’s husband (the Insured) suffered from chronic paranoid schizophrenia and acute auditory and visual hallucinations. He withheld this information from the Insurer despite his and his wife’s certain knowledge of the matter. This deliberate concealment of the Insured’s condition is an act of fraud and bad faith that invalidates the insurance contract. Further, the Insured’s failure to disclose his insurance policies with other companies in respect of the same interest to the Insurer by registered letter with acknowledgement of receipt showing the name of the other Insurers and the value of the other insurance policies invalidates the insurance contract, especially given the fact that all the policies were issued within close time intervals. Moreover, the Insured submitted false documents which invalidates the subject insurance contract. Hence, the Claimant’s requests for relief were meritless and were dismissed.
This case highlights the issues that can arise when filing a claim against an insurance company and the importance of adhering to statutory limitations. Submitting false documents will also result in invalidating the insurance policy. It is essential for athletes and insurance policyholders to carefully review the terms and conditions of their insurance policies. By familiarizing themselves with the relevant regulations and seeking legal counsel if necessary, athletes can make informed decisions regarding insurance coverage and ensure compliance with the required timeframes. Insurance plays a pivotal role in protecting athletes from the potential financial consequences of sports injuries.
For further information, please contact Fatema Sarhan.
Published in October 2023
