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People: at the Epicenter of Risk.

Human Capital Risk

Professional and Collegiate Athletes

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A twenty-six year old professional football quarterback was signed to a $15,000,000 contract where $10,000,000 was guaranteed and $5,000,000 was non-guaranteed. Working with the underwriter, a policy was designed that would pay the non guaranteed $5,000,000 portion in a lump sum in the event the quarterback was disabled. The policy included 24-hour worldwide coverage for BOTH accident and sickness and – most importantly – took into account games and practices.

An NBA basketball player who was in the last year of his contract had earned $2.3 million dollars the previous year. A policy was designed that would pay the player $2 million dollars in a lump sum if he were to become disabled and could not sign a new contract. A similar case involved a professional hockey player in the last year of his contract as well. He had earned over $2 million dollars the previous year. A one-year disability contract was designed to pay a $4 million dollar lump-sum payment if he were prevented from signing a new deal the following year.

The terms of the contracts that professional athletes sign can be onerous. Frequently contracts are not guaranteed if the athlete is disabled off the practice field or in a game situation. A $5 million dollar policy was underwritten for a professional athlete that would provide coverage in the event he were to become disabled in non-athletic activities.

College athletes can also be eligible for disability income protection, even though they have not yet earned income as a professional. The NCAA helps regulate their covered athletes through the Exceptional Student-Athlete Disability Program. If the amateur athlete is projected to be drafted within the first two rounds they may be eligible for benefits between $500,000 and $5,000,000. The NCAA also helps provide loans for purchase of this type of protection to certain athletes with demonstrated professional potential.

We can assist athletes, teams and agents by providing protection against catastrophic accidental death and coverage for risks that may void guaranteed contracts. Even coverage for “failure to sign” and “contractual indemnification” are available. If you can think of it, we can probably help insure it. We provide a peace of mind so that the athlete can concentrate on their sport without the stress and concern worrying about the possible and all too frequent injury that abruptly ends their livelihood.

 

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