By: Joseph Samuel, Esq., Dylan F. Henry, Esq., Kimberly L. Sachs, Esq., of Montgomery McCracken
In January, ESPN’s Outside the Lines reported that the insurance market for football and other high-contact sports was diminishing, placing these sports’ very existence in danger.[1] One insurance executive stated, “If you’re football, hockey, or soccer the insurance business doesn’t want you.” The article suggested that insurance companies were no longer willing to cover brain injuries due to the high litigation exposure they pose and the difficulty in calculating risk, and it provided case studies on specific teams and programs that have been affected by brain injury insurance issues.
This was not the first time ESPN released an article contemplating the end of football or other contact sports. In 2012, Grantland (an ESPN blog) ran a piece titled, “What Would the End of Football Look Like?”[2] It suggested that an evaporating insurance market could bring football on a 10 to 15 year “slow death march.”
While this kind of rhetoric can be effective at casting light on an important issue, it overlooks the fact that coverage for brain injury is still widely available to schools and recreational organizations that wish to provide contact sport programs. It is true that some insurance companies over the past years have written brain injury exclusions into their policies, but many insurers offer these exclusions as an option to lower premiums rather than as a flat out requirement.
The existence of these policies and the freedom of customization they offer are an indication of the sports insurance and risk management industry’s ability to adapt, not a sign of the impending demise of contact sports. This article discusses the trends regarding brain injury coverage and how industry experts have reacted to these trends.
Are Football and Other Contact Sports Really in Danger?
The Outside the Lines report likened the threat of brain injury (e.g., concussion) and brain disease (e.g., CTE) litigation to another behemoth that dramatically altered the litigation landscape: asbestos. It suggested that an evaporating insurance market could be the death knell of not only football but potentially “all of youth sports.”[3] Numerous industry executives were quoted as saying the risk of litigation and payouts related to brain injuries was a “sleeping giant” with the potential to result in a “free-for-all nightmare.” The report also noted that the NFL no longer has coverage for brain injuries, and that Pop Warner had to switch carriers when a subsidiary of AIG refused to insure the youth football organization without a brain injury exclusion.
Similar claims were made elsewhere in the wake of the Outside the Lines report, with one commentator contending that there was a “consensus” by insurers to either drop football entirely or write brain trauma exclusions into their policies, leading to the end of youth football itself. “Without youth and other feeder leagues to develop and nurture the NFL stars of the future, the outlook for the future of American football is dark and cloudy.”[4]
In the era of hot-takes and click-baiting, sweeping claims like these are sure to gain attention. What they do not mention is that many insurers continue to have sufficient appetite for taking on the risks of contact sports and that they will continue to cover brain injuries in their policies.
Brain Trauma Exclusions Offered By Sports Insurers Not Sign of Doom, But of Industry’s Ability to Adapt
There is no doubt that brain injury exclusions have become more commonplace in recent years. But this exclusion is most often a way to provide a choice to the insured, not a way of pulling coverage out from under them.
Many carriers who insure sports and recreation organizations have begun to offer the option to exclude brain injuries from coverage, allowing the organization to pay a lower premium. The exclusion is most often tied to a policy insuring tackle football, but it can also be elected as part of a policy covering other high-risk, high-contact sports such as soccer, hockey, and lacrosse. When the policyholder does not elect to exclude brain injuries, they will be covered, although the policy limits for such a claim may be lower than the limits for other types of injuries.
Take, for example, a policy offered by the National Recreation and Park Association (“NRPA”) [administered by K&K Insurance Group]. The 2019 policy offers coverage with the option to exclude brain injuries in football, soccer, hockey, and lacrosse.[5] The 2015 policy, however, did not contain such an exclusion.[6] But, importantly, the exclusion is not mandatory—customers can opt into coverage for brain injuries in exchange for a slightly higher premium. This is true even for tackle football.[7] For sports other than football, soccer, hockey, and lacrosse, brain injuries are fully covered.
In contrast with the picture painted by the Outside the Lines report and others, the NRPA’s policy is just one example of how the insurance market is reacting to shifting trends. Exclusions for brain injuries are available if an organization wants to pay a lower premium, but the coverage is nevertheless available to those who need it and are willing to pay higher premiums for it.
This is the view taken by many in the industry. In an interview with the California Youth Football Alliance, John Sadler of Sadler Sports Insurance expressed his disagreement with the Outside the Lines report and shared his thoughts on where insurance for youth sports was headed.[8]
“Despite what you may have heard in the media, there are still a number of insurance carriers willing to write General Liability including brain injury coverage. It is true that some carriers, such as Philadelphia and AIG, were hit with heavy losses in high-risk concussion sports, such as soccer and football, and decided to exclude all brain injury coverage in these sports,” Sadler said.
“But, there are five or more carriers freely writing the coverage with brain injury for youth tackle football, including Scottsdale, National Casualty, Atlantic Specialty and HCC, among others. Just do a Google search for youth tackle football insurance and you will get a lot of hits. And my agency will insure youth tackle football including brain injury all day long.”
How Can Insurance Make Sports Safer?
Insurance companies have a unique opportunity to encourage programs to have sound policies and practices in place related to handling sports-related concussions. Sadler explained that insurance carriers require that, in exchange for coverage, their insureds maintain detailed concussion-management policies, which can mitigate the risk of head trauma. “These programs should key in on training for staff, parents, and players on the basics of concussions; how to recognize a concussion, mandatory removal from play, mandatory treatment, and gradual return-to-play protocols,” Sadler said.
This, of course, is part of a much larger movement towards increased player safety throughout the youth sports community. The increased awareness about the risks associated with brain trauma and the long-term effects of repetitive concussive and sub-concussive blows has changed the way we view sports, from the professional level all the way down to the local rec leagues. These risks have had a profound impact on the way leagues, teams, and schools conduct their operations, as they work to update concussion-management and return-to-learn and return-to-play protocols.
In fact, Sadler indicated that concussion claims are trending downwards. “I recently had a discussion with a senior manager at one of the carriers that continues to write the coverage, and he said that they have no plans on pulling back and that they have not seen an uptick in brain injury claims over the past three years,” he said.
By taking steps to require their insureds promote player safety, insurance companies that issue policies covering brain injuries are not turning their back on football, and other high-risk, high-contact sports. Instead, they are using their leverage (insurance coverage for brain injuries) to ensure that those organizations are being proactive in preventing injuries from occurring in the first place and, in doing so, mitigating their risks. Outside of legislative mandates, insurance companies may have the most power to influence change at all levels so that these sports can continue to become safer, ensuring their existence (and the host of benefits they provide) well into the future. The reality is this: insurance is not killing football, it is keeping it alive.
This article is dedicated to Steve Henne, a beloved friend of the editors and authors of Sports Medicine and the Law. Steve was the Vice President of Claims and Shareholder Initiatives at The National Catholic Risk Retention Group, a role he served in for nearly 14 years. It couldn’t be any clearer what an esteemed and admired figure he was at National Catholic and within the insurance and risk management industry, and we have him and his family in our thoughts and prayers.
Dylan Henry and Kim Sachs are associates in Montgomery McCracken’s Litigation Department and members of the firm’s catastrophic sports injury defense team. The team represents universities, schools, athletic trainers, and other sports programs and staff in a variety of sports-related and head injury litigation, which include claims for negligence (e.g., failure to warn, premature return to play), products liability, breach of contract, and professional malpractice, and advises clients on complying with various rules, regulations, and laws, and maintaining policies in compliance with best practices and industry standards.
Joseph Samuel is an associate in Montgomery McCracken’s Litigation Department.
[1] Steve Fainaru and Mark Fainaru-Wada, “For the NFL and all of football, a new threat: an evaporating insurance market,” ESPN.com (Jan. 17, 2019), https://www.espn.com/espn/story/_/id/25776964/insurance-market-football-evaporating-causing-major-threat-nfl-pop-warner-colleges-espn/.
[2] Kevin Grier and Tyler Cowen, “What Would the End of Football Look Like?”, Grantland (Feb. 13, 2012), http://grantland.com/features/cte-concussion-crisis-economic-look-end-football/.
[3] The full quote, from the executive director of Pop Warner football, was as follows: “Certainly, if insurance goes away, it’s not going to be just football. It’s going to be all of youth sports. I think it would be the proverbial domino effect.” See Fainaru, supra note 1.
[4] Brendan Gooley, “Will Insurance be the Death of Football? Market Constricts Amid Brain Injury Concerns,” Property Casualty Focus (Jan. 30, 2019), https://propertycasualtyfocus.com/will-insurance-be-the-death-of-football-market-constricts-amid-brain-injury-concerns/.
[5] See “Applications and Brochures,” National Recreation and Park Association, ttp://www.nrpainsurance.com/sites/nrpa/Pages/ApplicationsandBrochures.aspx (last visited Oct. 13, 2019).
[6] See “2015 NRPA-sponsored coverage—a win-win for everyone!”, NRPA, http://www.nrpainsurance.com/sites/nrpa/Documents/PDF/1927-B%20NRPA-Football-6-19.pdf (last visited Oct. 13, 2019).
[7] Brain injuries do have lower policy limits, at $1,000,000 per occurrence and $1,000,000 aggregated. Injuries other than brain trauma have a $5,000,000 aggregate limit. “Brain injury” is defined as “concussion, chronic traumatic encephalopathy or any other injury to the brain and any symptoms, conditions, disorders and diseases, including death, resulting therefrom but only if such injury occurs as a result of specific events occurring during the policy period.” See supra note 5.
[8] John M. Sadler, “Despite ESPN Article Claims, Insurance Will Not End Youth Football,” Sadler Sports & Recreation Insurance, https://www.sadlersports.com/blog/is-football-insurance-dying-youth-tackle-football (last visited Oct. 13, 2019).
