Over the last decade, the NFL has been hit by lawsuits over traumatic brain injuries, allegations of player domestic violence off the field, and rule changes of their own. According to an ESPN investigation, the sport is facing a problem that could endanger its very survival – lack of insurance. The league no longer has general liability insurance covering head trauma. And only one carrier is willing to cover teams for workman’s comp. In short, if there’s no insurance, there’s no football.
There’s been so much litigation that’s proliferated since the NFL settled the class-action suit in 2013 over concussions, that it really gives the insurance industry pause. Up to this point, the NFL had been putting money into research and changing the rules that the insurance industry started to make their own judgments and determined a tremendous amount of uncertainty.
Many former players accused the league of covering up the link between football and neurodegenerative disease. The NFL settled for an estimated $1 billion. Since then, insurance companies have been taking a look at the litigation that has been increasing. And it’s hitting the sport at all levels. The result? Insurance companies are dropping out, meaning they are no longer insuring the NFL. This means that if the league gets sued on the issue of concussion, under its general liability policy, they’re on their own. They ultimately have to pay it out of pocket.
The impact is obvious – smaller programs are shutting down because of insurance costs. The problem is especially acute at nonrevenue-producing sports. Pop Warner’s longtime insurer told them that they would no longer cover the organization for any neurological injury. And they found that there was only one company that was able to provide them that coverage. In Pop Warner’s case, they have two options; either they declare bankruptcy or go out of business. Obviously, that would pose incredible problems for the 250,000 youth players that are involved in Pop Warner.
If you can’t get insurance with all the litigation that’s out there, it becomes virtually impossible to field a team. And so for youth sports in particular – and then when you get into the high-school level, there is an enormous amount of complexity around it. But it is an essential thing – that if you can’t get insurance, it becomes tough to stage the sport.