Even if you aren’t a regular sports fan, you may well be aware of the recent high-profile boxing match involving Floyd Mayweather and Manny Pacquiao. A key reason why interest levels were so high is because of the astronomical sums of money being bet and won at the event – supposedly around $400m.
After the event it came out that Pacquiao was suffering from a pre-existing shoulder injury; this could have influenced his fight performance, and the information made available in advance could have changed how gamblers placed their bets and how much they bet.
Because it came out only after the match, this has triggered a court case from two people in Nevada, alleging fraud. Pacquiao could now find himself defending a costly court action. Given that he secured a hefty share of the $230m prize fund, he can probably afford to defend it!
What is interesting from an insurance perspective is how the allegation of fraud has arisen. It transpires that a box on the pre-fight questionnaire concerning pre-existing injuries was left unticked. The form was completed by Michael Koncz, Pacquiao’s adviser, who took “full responsibility” for the “inadvertent mistake”.
If Koncz was a formal employee of Pacquiao, the boxer is likely to have to take any legal costs on the chin – so to speak.
If Koncz is self-employed, and contracted to provide certain services – as the title “adviser” would suggest – then he could be at risk of Pacquiao alleging negligence in his duties, and making a claim against him. Koncz has publicly acknowledged he is at fault, which might encourage such a claim and make it more likely to succeed. On the other hand, such a public admission could lead to a rejection of a claim by his professional indemnity insurer (if he has an indemnity policy) as admission of liability can be excluded in the wording.
There are two lessons to be learned from this story:
1. Large claims can come from the tiniest of inadvertent errors – such as not ticking a box. This could be a great example of Newman’s Law of 24/7.
2. Checking your wording should not be a “box ticking exercise”; indeed, it is vital you know what you are covered for and what obligations are imposed on you by your insurer should you need to make a claim to ensure you are not dealt a knock-out blow of having your claim rejected!