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Digital EditionNIL Protection: A Game-Changer for College Sports?
With billions of dollars flowing to student-athletes over the use of their name, image and likeness – known to fans and boosters alike as NIL – the impact of a star player’s injury or illness reverberates well beyond the scoreboard.
Welcome to the new high-stakes era of revenue sharing across college sports, which can result in financial default if top young athletes are sidelined for any length of time. Schools and their donors are often still on the hook for massive NIL contracts, potentially draining funds meant for recruiting and program stability. Sensing opportunity, the insurance industry has responded with specialty products aimed at taking on this enormous risk.
Rory Lough, senior vice president, executive planning for Gallagher, took notice when the National Collegiate Athletic Association (NCAA) enacted a landmark rule allowing all student athletes to monetize their NIL and transfer to another school without waiting a year. That July 2021 directive proved to be a game-changer in the world of college sports.
It was followed by a revenue-sharing agreement that took effect in July 2025. The latter development pertains to TV contracts, ticket sales, sponsorships, conference distributions and about $2.8 billion in back-pay damages for former athletes who were unable to profit from NIL opportunities between 2016 and 2024.
Rory Lough
Senior Vice President
Executive Planning
Gallagher
Another key NCAA change that predates these two significant developments occurred in October 2018 with the launch of a transfer portal as part of a broader rule change adopted for Division I athletics that made it easier and more transparent for college athletes to transfer schools. It has in effect ratcheted up the intense competition for athletic talent.
“Now we have a very insurable interest to protect student athletes whose contractual value dollar amounts can be financially detrimental to an organization if they can’t play,” Lough explains.
Gallagher is a pioneer in this emerging area, along with Zurich North America, which has partnered with Players Health on an NIL injury insurance program for colleges and collectives (Players Health also has a product aimed at student athletes). Others include A-G Specialty Insurance and NIL Insurance Company.
NIL also has opened the door to other specialty insurance coverages that are helping provide financial stability in institutional settings. Two such examples are becoming standard roster hedge strategies. They include collective owned disability insurance, which donors purchase to protect their investment, and collegiate athletic disability insurance, which protects universities and athletic departments.
Avoiding Donor Fatigue
As a risk management tool, Gallagher’s NIL risk and revenue protection program helps guard against unforeseen financial burdens. Key features include incentive compensation protection, loss of value, property and casualty insurance to cover broader campus risks, bowl game coverage to help ensure key player retention, full coverage for contract length, and death and disgrace coverage.
The aim of this product is to ensure that that financial obligations of a university and its athletic department can be met in the event that a star athlete is sidelined due to injury or illness. Under this scenario, the student athlete would still be able to collect NIL dollars while the university recruits a replacement for that position.
“What we want to do is make sure that these strategies help mitigate that risk so that it avoids donor fatigue,” Lough says. Donors can rest easy knowing they have reinsurance to pay for million-dollar contracts, providing almost a cost-recovery component to that investment. Insuring NIL risks also allow a college sports program to focus on fundraising and recruiting efforts, while also protecting athletes and their families.
Insurance policies can be customized to protect however many NIL contracts are in place based on each roster, which will vary from one team to the next. For some, it may be a matter of identifying the top five players, while others could expand to the top 10 or a different number.
“We’ve had schools where they’ve had 15 or 20 athletes that have very high dollar amounts, and five or six of them didn’t even start, and they’re still collecting their NIL contracts,” she reports.
Coverage depends upon the type of strategy that’s implemented. For example, it could be after just a few games of their deductible or certain dollar amount. One of the important design components is an ability to be fluid in this type of implementation. With regard to that last point, Lough notes that organizations will want to customize and protect a certain risk, which means it’s important to understand the culture and risk that’s involved.
When asked about benchmarking these policies, she tells schools to simply examine their own data – from the number and value of NIL contracts paid out to the depth of their bench talent. The financial impact on an organization can be significant in terms of sponsorships, marketing and attendance, affecting the entire college sports ecosystem.
Just as in the business world, where branding is becoming increasingly important, colleges and universities now have to think more carefully about how they attract and retain star athletes as well as coaches. “NIL contracts often will provide that form of incentive,” she notes.
Shift to performance incentives
While the focus has been on NIL contractual value over the past year or two, Lough says attention is now shifting to additional incentives based around performance schools are providing to recruit star athletes.
While the focus has been on male college athletes in basketball and football, she notes that efforts to protect NIL contracts for female athletes is trending, with a tremendous uptick in the gymnastics world.
“Many of those NHL contracts are very high, and there’s a vested insurable interest there,” Lough reports. “We’ve seen an uptick in the hockey world, both female and male, along with soccer as well. Those dollars are continuously increasing due to many of the schools’ growth and donor contributions.”
Noting how the insurance industry often operates in silos, she says a holistic approach to mitigating risk allows for customizable solutions. For example, efforts are made to extent protection to the aviation services donors fund to fly players around the country, as well as cybersecurity or types of emergencies. “We’re very collaborative and cross all lines within our team members to give our bench the deepest depth of expertise,” she notes.
In this regard, college athletic directors are tearing a page from NFL front-office playbooks to financially insulate their human capital. There has always been insurance and reinsurance to guarantee certain levels of compensation after a set number of years across all professional sports and for entertainers as well, she says.
“We already protect professional athletes, but now we’re looking at the collegiate world,” Lough observes. “All of a sudden, the risk has changed, and we’re meeting with risk managers and directors who have this new financial need and protector that is unheard of.”
Various NCAA rule changes allow colleges and universities to define the contractual value of star student athletes just like professional athletes or C-suite employment agreement, according to Lough.
While funding mechanisms have long been part of the collegiate world, she explains that they were never regulated or spotlighted the way they are today with the pervasiveness of NIL contracts. “It is really important to understand that we have some form of responsibility to making sure that contracts for elite athletes are held whole, and achieving peace of mind for donors and organizations is to have this type of insurance on those contracts,” she adds. &
