Will insurance be the NFL's Achilles heel?

The National Football League (NFL) faces a threat from Chronic Traumatic Encephalopathy (CTE) — i.e., head concussions.  We live in a hyperlegalistic society.  It's prudent for corporations to take potential liabilities into account when making major decisions.  Here, insurance is needed to transfer the risk to a larger pool.  It gives the insured peace of mind and a financial cushion if the risks turn bad. 

Lack of insurance is a dagger aimed at football programs.  According to ESPN, the insurance market for liability coverage for all football programs is evaporating.

The NFL no longer has general liability insurance covering head trauma, according to multiple sources; just one carrier is willing to provide workers' compensation coverage for NFL teams.  Before concussion litigation roiled the NFL beginning in 2011, at least a dozen carriers occupied the insurance market for pro football, according to industry experts.

Since 2005, when the first case of brain disease was reported in a former NFL player, thousands of concussion-related lawsuits have been filed in the United states, including class-action suits against the NFL, the NHL, and the NCAA.  Since the NFL settlement, concussion-related lawsuits involving 18 sports activities have been filed in at least 29 states, "Outside the Lines" research shows.  They target not only professional sports, but also youth leagues, school districts, athletic associations, equipment manufacturers, medical provides, coaches, and athletic trainers.

Furthermore, dementia and every case of Parkinson's and Alzheimer's are going to be blamed on football.  There will be doctors willing to say, "I'm sure it was because you play football."  There are literally millions of former athletes who were exposed to repetitive head trauma and who could file lawsuits against school districts, leagues, coaches, and equipment-manufacturers.

Brain injury liability is a "long-tail claim."  The damage might take years to develop, then pay out indefinitely in the form of costly legal bills, settlements, judgments, and medical bills.  James Lynch, chief actuary for the insurance Information Institute of New York, says, "Thirty years from now, you could be on the hook, and that's a very difficult situation for an insurance company to be in."  The potential exposure for the insurance companies is incalculable.  Hence, they avoid it by not writing policies or exclude neurological injuries when they do.

The NFL could self-insure, but not others down the food chain.  The participation rate in youth football has been steadily dropping, and Forbes magazine says high school football is dying a slow death.  Unaffordable insurance will accelerate this process.  Jon Butler, executive director for Pop Warner, says, "People say football will never go away, but if we can't get insurance, it will." 

Youth and collegiate football are the NFL's feeder system.  If the flow dries up, it'll have an adverse effect on pro football.  Also, as fewer kids participate in tackle football, there will be a falloff in interest in the game, hurting attendance and ratings.

Pro players are highly compensated and know the risks.  Any adult playing football and experiencing the violence firsthand would have to be already brain injured not to realize that the game is inherently dangerous.  But this line of reasoning won't fly in brain trauma lawsuits.  This is America of 2019, not 1919. 

How will the NFL handle this problem?  Maybe the relationship between CTE and football is being exaggerated, and the matter will blow over.  Doubtful.  It wasn't that long ago when smoking was ubiquitous.  Cigarette commercials dominated advertising.  People were smoking in offices, on planes, in hospitals and restaurants.  Look what happened.  Smoking has been marginalized, and tobacco companies have paid multi-billion-dollar fines.  The same fate could await America's number one sport.  If so, football will still be played but it won't be what it is today.

The National Football League (NFL) faces a threat from Chronic Traumatic Encephalopathy (CTE) — i.e., head concussions.  We live in a hyperlegalistic society.  It's prudent for corporations to take potential liabilities into account when making major decisions.  Here, insurance is needed to transfer the risk to a larger pool.  It gives the insured peace of mind and a financial cushion if the risks turn bad. 

Lack of insurance is a dagger aimed at football programs.  According to ESPN, the insurance market for liability coverage for all football programs is evaporating.

The NFL no longer has general liability insurance covering head trauma, according to multiple sources; just one carrier is willing to provide workers' compensation coverage for NFL teams.  Before concussion litigation roiled the NFL beginning in 2011, at least a dozen carriers occupied the insurance market for pro football, according to industry experts.

Since 2005, when the first case of brain disease was reported in a former NFL player, thousands of concussion-related lawsuits have been filed in the United states, including class-action suits against the NFL, the NHL, and the NCAA.  Since the NFL settlement, concussion-related lawsuits involving 18 sports activities have been filed in at least 29 states, "Outside the Lines" research shows.  They target not only professional sports, but also youth leagues, school districts, athletic associations, equipment manufacturers, medical provides, coaches, and athletic trainers.

Furthermore, dementia and every case of Parkinson's and Alzheimer's are going to be blamed on football.  There will be doctors willing to say, "I'm sure it was because you play football."  There are literally millions of former athletes who were exposed to repetitive head trauma and who could file lawsuits against school districts, leagues, coaches, and equipment-manufacturers.

Brain injury liability is a "long-tail claim."  The damage might take years to develop, then pay out indefinitely in the form of costly legal bills, settlements, judgments, and medical bills.  James Lynch, chief actuary for the insurance Information Institute of New York, says, "Thirty years from now, you could be on the hook, and that's a very difficult situation for an insurance company to be in."  The potential exposure for the insurance companies is incalculable.  Hence, they avoid it by not writing policies or exclude neurological injuries when they do.

The NFL could self-insure, but not others down the food chain.  The participation rate in youth football has been steadily dropping, and Forbes magazine says high school football is dying a slow death.  Unaffordable insurance will accelerate this process.  Jon Butler, executive director for Pop Warner, says, "People say football will never go away, but if we can't get insurance, it will." 

Youth and collegiate football are the NFL's feeder system.  If the flow dries up, it'll have an adverse effect on pro football.  Also, as fewer kids participate in tackle football, there will be a falloff in interest in the game, hurting attendance and ratings.

Pro players are highly compensated and know the risks.  Any adult playing football and experiencing the violence firsthand would have to be already brain injured not to realize that the game is inherently dangerous.  But this line of reasoning won't fly in brain trauma lawsuits.  This is America of 2019, not 1919. 

How will the NFL handle this problem?  Maybe the relationship between CTE and football is being exaggerated, and the matter will blow over.  Doubtful.  It wasn't that long ago when smoking was ubiquitous.  Cigarette commercials dominated advertising.  People were smoking in offices, on planes, in hospitals and restaurants.  Look what happened.  Smoking has been marginalized, and tobacco companies have paid multi-billion-dollar fines.  The same fate could await America's number one sport.  If so, football will still be played but it won't be what it is today.