Football’s Insurance Problem Might Be the Sport’s Demise

With growing risk of concussions and other traumatic brain injury, the football industry is looking at a shrinking pool of insurers willing to underwrite its risks.
By: | January 29, 2019 • 3 min read

The Gist: Traumatic brain injuries have made football — arguably America’s favorite sport — almost uninsurable. ESPN’s Outside the Lines reports that football is facing an “evaporating insurance market that is fundamentally altering the economics of the sport, squeezing and even killing off programs faced with higher costs and a scarcity of available coverage.”

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Outside the Lines paints a picture of an industry in crisis — quite a stark contrast to the pomp and circumstance you’ll see on Super Bowl Sunday, with massive TV ratings, highly anticipated commercials and celebrities galore. The NFL no longer has general liability insurance and has just one workers’ comp provider, according to the story. To better understand the severity of this, there were a dozen insurers in the pro football marketplace in 2011.

The End of Football? It’s hard to imagine football dying off, especially considering the incredible fan interest, team worth and money surrounding the college and pro games. But Jon Butler, Pop Warner’s executive director offered this grave quote to Outside the Lines: “People say football will never go away, but if we can’t get insurance, it will.” Pop Warner, essentially the little league of football, knows the situation well. AIG, its long-time provider, opted out of covering youth football after it could not get a neurological industry exclusion.

The story outlines football programs in California, Tennessee and Arizona that have already removed their programs. And it’s not just football. Alex Fairly, CEO of risk management firm Fairly Group, which counts NFL and Major League Baseball as clients, said: “If you’re football, hockey or soccer, the insurance business doesn’t want you.”

Football Has Always Been Dangerous, Why Is This Happening Now? Concussions and head trauma became a hot button issue in 2011 when 75 former players sued the NFL, saying the league concealed the harmful effects of concussions. It led to books, documentaries and even a movie starring Will Smith that helped take the issue mainstream.

Now the NFL and insurers are fighting over who will pay legal fees and claims associated with the 2013 settlement of that class-action lawsuit — expected to cost more than $1 billion. Meanwhile, college football is embroiled in a similar situation. The NCAA is now facing more than 100 individual lawsuits seeking damages for traumatic brain injuries.

Read More: The Expanding Liability of Sports Concussions by Joe Cellura, president, North American Casualty, Allied World

Some Say the Sky Isn’t Totally Falling: It’s important to note that football remains as popular as ever and that not everyone believes the game is in serious danger. The NFL has instituted new rules to encourage safer play, so the brutal hits on defenseless players you may remember from the 1970s and ’80s happen far less in today’s game. The league has also instituted a concussion protocol that closely monitors players who experience concussion-related symptoms.

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When it comes to insuring football, some sources quoted by Outside the Lines said the market is beginning to adjust, and brain injuries and concussions are just part of the narrative. Scott Lunsford, a senior vice president with K&K Insurance said “numerous options remain” for coverage and Butler (from Pop Warner) added carriers are “starting to get a handle on it, just as they have with other risk management situations.”

Learn MoreRead the in-depth piece from ESPN’s Outside the Lines to get a better understanding of just how big of an impact this is on the sports industry. The article includes eye-opening interviews with sources like Pat Namanny, a Southern California workers’ compensation lawyer currently handling nearly 100 previously settled cases in which former NFL players have filed new claims for head trauma. They also interview Cindy Broschart, president of Berkley Entertainment & Sports — the lone carrier willing to cover pro football for head trauma. Says Broschart: “If you don’t have the stomach for the loss, you can’t be in the business.” &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

Risk Matrix: Presented by Liberty Mutual Insurance

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The R&I Editorial Team can be reached at [email protected]