There’s been a lot in the news over the last few years about traumatic brain injuries caused by playing football, and even a motion picture where Will Smith played the accomplished pathologist Dr. Bennet Omalu who uncovered the link between the sport and head trauma.
So, how does this relate to insurance, you must be wondering. Just like any other industry, the National Football League (NFL) needs general liability and workers’ compensation insurance coverage to function. And right now, the insurance companies are just a little bit concerned about the costs that may be incurred for covering the NFL, Pop Warner and other youth football leagues.
Make that “really concerned”. In fact, the insurers are very worried that the potential for traumatic brain injury claims are going to be like asbestos claims, and cost them potentially billions over decades.
“Basically, the world has left the marketplace,” the man behind the story, Alex Fairly, CEO of the Fairly Group, told ESPN’S Outside the Lines. “If you’re football, hockey or soccer, the insurance business doesn’t want you.”
And Fairly is a man who has some experience in this department. In addition to the NFL, Fairly’s risk management firm The Fairly Group, based in Amarillo, Texas, has a list of clients that includes Major League Baseball, Major League Basketball, Major League Soccer, the National Hockey League, U.S. National Men’s and Women’s Soccer, various U.S. Olympic Committee governing bodies and more than 1,000 collegiate athletic departments.
Plus, The Fairly Group has a construction division where they have provided risk consultancy and brokerage for the development of nine new professional sports stadiums.
That’s a lot of sports.
And it’s why Fairly realizes that the real trick (and the real challenge) for the NFL and other professional sports leagues is not about insurance, it’s about risk management. In regards to the NFL specifically, Fairly cites the insurers’ concern about the “general unknown” associated with exposure related to head trauma, as it is not easy to predict, measure, and therefore, price.
Right now, the NFL doesn’t have general liability insurance covering head trauma, and just one carrier is willing to take on their workers’ compensation coverage. Eventually, the insurance companies’ refusal to insure the NFL has created a new economics of football and is squeezing and potentially killing off programs faced with higher costs and scarcity of coverage.
It’s so bad, even football helmet manufacturers only have one choice when it comes to insurance companies.
Dr. Julian Bailes, Pop Warner’s medical director and a member of the NFL’s Head, Neck and Spine Committee, told Outside the Lines “insurance coverage is arguably the biggest threat to the sport.”
In fact, it’s possible that more school administrations will decide to eliminate football to eliminate any potential risk.
Would you let your children play football? Please leave your thoughts in the comments below.
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