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Contract mistake destroys football players' workers' comp claims

Have you ever taken a look at your employer’s workers’ compensation policy? You almost certainly haven’t, but this story might make you want to. Three professional indoor football players were just denied coverage for their legitimate injuries because their employer was confused about the precise legal requirements for a workers’ comp insurance contract.

The 10-team Continental Indoor Football League is a relatively new enterprise, initially founded as a regional concern in 2006. It’s a perfectly legitimate business, however, and Illinois law like that of North Carolina requires all employers to provide workers’ compensation insurance for their workers.

As in other professional sports franchises, CIFL teams are generally owned by investors -- and such investors often several different businesses, each set up as a separate business entity. That appears to be the case with the now-defunct Rock River Raptors of Rockford, Illinois.

During the 2009 season, three Raptors players were injured in home games and filed workers’ comp claims. The investor had funded the team through a company called Champion Investments LLC, and Championship had a workers’ comp policy through West Bend Mutual Insurance Co.

When the players’ claims were submitted, however, West Bend learned that Championship wasn’t actually the Raptors’ owner. That season, the investor had transferred the team to another of his companies, JFK2 LLC, which he had set up to run a Wisconsin team in another small league. JFK2 LLC also had a workers’ comp policy through West Bend, so there wouldn’t be a problem, right?

Unfortunately, he hadn’t checked his contracts. West Bend’s policy with JFK2 LLC only covered injuries occurring in Wisconsin. Since the Raptors players were injured in Illinois, they weren’t covered by that policy. The contract between West Bend and Championship would have covered them -- but only if Championship had been the players’ employer.

The injured players appealed, and the appellate court just released its ruling. “The plain and unambiguous terms of the contracts indicate that defendants were employed only by the Raptors,” the court found, “and nothing in the contracts indicates that defendants were employed by Championship.”

This outcome is obviously unjust to the players, and it’s unclear whether the investor was required to compensate them or they were left holding the bag. The sad truth is, contract law matters, and contract mistakes can hurt.

Source: Courthouse News Service, “Indoor Football Players Lose Workers' Comp Bid,” Jeff D. Gorman, Oct. 9, 2013

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