A former wide receiver for the University of Southern California has sued Lloyd’s of London after it denied his $4.5-million insurance claim. The defendant claimed its decision was based on the fact that plaintiff Marqise Lee misled it about prior injuries.
In his complaint, Lee noted that his designation as an “exceptional student athlete” enabled him to purchase an insurance policy that would “encourage” him to continue playing football for the Trojans for another season despite the risk of injury to his future career in the National Football League. The insurance policy, for “loss of value and permanent disability,” was facilitated by the NCAA as a way to “incentivize student athletes to continue playing college football.”
Lee purchased the policy for $94,000 in the summer of 2013. The policy period covered August 1, 2013 through August 1, 2014.
During that period, Lee, the reigning Biletnikof Award winner as the nation’s top wide receiver, suffered an injury. “Lee missed multiple games as a result of the injury, and his skills were negatively affected throughout the remainder of the 2013 college football season,” according to the lawsuit. The injury allegedly caused Lee’s prospects in the NFL draft to “decline sharply.” In fact, lee, who had been projected as a first round draft pick, slid to the second round and was selected 39th by the Jacksonville Jaguars.
Lee subsequently made a claim to recover his “loss of value” under the policy, or several million dollars. Lloyds, “after numerous delays and spurious requests for information,” denied the claim. The basis for the decision, according to the plaintiff, was Lloyd’s contention that Lee “failed to disclose certain health information, when applying for the disability policy.” Lee has denied the allegation. Furthermore, his attorneys claim that Lloyd’s denial was a breach of the policy and was made in bad faith.
“The defendants’ acts were inconsistent with the reasonable expectations of their insured, contrary to established claims practices and legal requirements, and constitute bad faith,” according to the lawsuit.
The Insurance Journal, a trade publication, quoted Lori Shaw, an executive director with Aon’s entertainment group, about the underlying lesson in the case. “It shines a spotlight on how particular you have to be with the policy wording, and making sure that the understanding and expectations of the person buying the policy and the understanding and expectations of the carrier writing the contract are aligned,” she said.
The case was filed in the U.S. District Court in the Central District of California.
