Football Insurance? You Bet

This post first appeared on Goldberg Segalla’s Professional Liability Matters blog. 

Professional athletes are worth a lot of money. When they are on top of their game they are capable of raking in the dough for themselves and their organizations.  However, if they become injured or otherwise unable to perform a lot of money is at stake.  Therefore, it’s not unusual for athletes to obtain disability insurance policies, covering them in the event of a career ending injury.  In fact with respect to collegiate athletes, the NCAA even sponsors a disability insurance program, which provides protection for qualified athletes against future loss of earnings as a professional athlete, due to a disabling injury or sickness.  Of course in order to make the transition from collegiate athlete to professional you must first be drafted, and that’s where loss of value insurance comes into play.

Loss of value insurance policies provide collegiate athletes with a way to hedge their bets if they are anticipated to turn pro.   A loss of value policy or “draft insurance” provides protection when an athlete’s draft rank drops, in most cases due to injury.  The Professional Liability Matters blog previously reported on the downside to not obtaining this type of insurance.  Now, a recent story concerning Myles Jack, a UCLA junior linebacker, has produced a much more favorable result.

Just a few weeks after a season-ending knee injury, Myles Jack announced he would not return to school, but rather planned to enter the 2016 NFL draft.  The decision was likely made that much easier due to a reported $5 million insurance policy, which includes a “loss of value” rider, which Jack obtained after his freshman year.  As a projected first round draft pick before his season-ending injury, Jack’s decision to purchase the loss of value rider certainly seems like it will pay off.  If scouts get scared and his draft rank drops, it’s no sweat off his back, as he reportedly will receive $5 million, through the loss of value rider.  It’s also possible that his breakout talent from his first year is enough to keep him as a first round pick, despite injury.  Jack’s good sense to purchase insurance, including the loss of value rider has turned what could have been a devastating situation into what appears to be a win-win scenario.

Professional athletes are not the only ones that need to think about insuring their assets.  Regardless of your profession you need to be mindful of protecting yourself from risk and insuring against loss.  As in Myles Jack’s situation knowing the right type of policy for your needs is critical.  Take the time to understand the policy learning about any possible exclusions and how a claim is determined to ensure that you will be protected if a claim arises.  Hedging your bets now can save you big down the line.

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