Archive for the ‘Disability’ Category

Spotlight on Sports Disability Insurance

Lloyd’s of London claim denial based on applicant’s failure to disclose

Sports disability insurance

Photo credit: Kirby Lee, USA TODAY Sports

A former University of California football player’s landmark lawsuit against Lloyd’s of London is putting almost as much attention on sports disability insurance as the upcoming2015 NFL draft. The suit was filed by Marqise Lee, a former Trojan receiver who alleges Lloyd’s denied the  $4.5 million disability insurance claim filed.

In 2013, potential first-round draft prospect Lee chose to sit out the NFL draft and remain playing for USC for one more year. He purchased loss of value and permanent disability insurance from Lloyd’s that would ensure him the difference between his rookie contract and a baseline of $9.6 million. Lee paid the $94,600 premium using funds from an NCAA-compliant loan taken out specifically for that purpose.

Lee was injured later that season, and was forced to sit out several games and play with injuries the rest of the season. With his draft prospects greatly diminished, he was a second-round pick in 2014 and signed a four-year $5.1 million contract, resulting in the $4.5 million difference he filed for in his claim.

Lloyd’s says Lee misrepresented his injury history by failing to disclose health-related information when he applied for the policy. Lee claims Lloyd’s breached the policy and made the denial in bad faith.

As with any insurance policy, all questions on applications must be completed fully and truthfully. Otherwise, the door is open for the insurance carrier to deny a claim based on fraud in the application. The basis for such denials is that the carrier would have rejected the application or charged a much higher premium had full information been disclosed in response to the question. When gray areas arise when answering application questions, a professional insurance agent can be an invaluable resource to help guide the applicant through this sometimes difficult maze.

Source: Don Jergler, Insurance Journal, 13 Mar. 2015

Crossing the Foul Line

HIV-positive player kicked out of rec basketball league

A 21-year-old player on a Kissammee Parks and Recreations basketball team was told he could not participate in the league. A part-time recreation leader confronted Dakota Basinger mid-game, asking if he was HIV-positive. When Basinger replied that he is, the employee then told him he was not permitted to continue the game or play in the league.

A spokesperson for the city’s Parks and recreation department stated that the worker had specifically been told not to approach Basinger and did so without supervisor approval.

Should players with HIV / AIDS be allowed to participate in youth sports leagues? Find out in our article  Read our article HIV in Youth Sports.
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Ice Hockey Face Visors

Should sports disability carrier mandate use?

Sports insurance carriers are often pressured by advocates to require certain safety rules or safety equipment as a prerequisite of coverage.  The latest incident of this occurred in the sports disability insurance market for NHL professional hockey players.  Personal Disability insurance covers loss of income as a result of certain career ending injuries. One specialty Accident carrier decided to mandate the use of face visors as a precondition of extending coverage.  However, Disability broker, Greg Sutton of Sutton Special Risk in Toronto argues that it is not the role of sports insurance carriers to affect change as such. These changes, he said, should be left up to NHL players.

Sutton cites the following reasons for not mandating the face visor as a precondition of Personal Disability coverage:

  • The last career-ending injury that a face visor may have prevented occurred in the 2000 season when Bryan Berard lost most of the vision in one eye after being struck by a stick.  The Disability carrier actually paid a lump sum, which he paid back when he decided to continue his career in 2001-2002.  Therefore, mandating the face visor would not make a significant impact on reducing claim payouts.
  • Concussions are a much larger issue in NHL than injuries that could be prevented by face visors.
  • Sutton personally favors the use of face visors and thinks that the insurance industry should consider discounts for their use. However, the policies are already highly discounted.
  • Currently 73% of the NHL’s 740 players voluntarily wear face visors and the players union may consent to mandatory use with older players being grandfathered in.

In my opinion:

In my experience, sports Accident and General Liability carriers only mandate certain safety rules or safety equipment when their use would prevent catastrophic injuries.  As regards discounts, most don’t want to give up front discounts, as discounts will be provided on the back end when claim reductions work their way into the loss history of an account.

Source: David Shoalts, “Player Safety: Onus for Visor Use Must Stem From Players, Insurance Magnate Says.” 24 Mar. 2015.