Risk and insurance
Copyright: fuzzbones / 123RF Stock Photo

It is well known that sports teams, leagues and players often have insurance to cover risks. In the past, I represented an insurer regarding coverage or non-coverage for a sports league strike. An ancillary question is the duty or not of an insurance broker.

A few inside baseball concepts here. First, an insurance agent is most often construed to be the agent of the insurer and is often an employee of the insurer. A broker is independent, presents risks to insurance companies and is either considered to be the agent of the insured or an independent intermediary. In Moje v. Federal Hockey League LLC et al., a minor league hockey league faced suit involving injury to a blinded fan. The fan took a default judgment against the league. The victim sued the broker and so far the broker has won on the grounds that the injured person was not signatory to the insurance policy and the policy did not cover the risk.

Brokers are often sued for malpractice on the grounds that they should have known that an insured should have particular coverage. Truth be told, the brokers usually win. Absent explicit instructions, it is too easy for an insured to say after the fact that they had asked for certain risks to be covered. Unlimited “he said, she said” in this arena would make it impossible for brokers to do business.

One of my law school professors was well-versed in insurance law. He told me that he had any number of prominent non-coverage lawyers come to hire him as a consultant on discreet insurance questions. Invariably he would ask them upfront….”Have you read the policy?”  A surprising number answered that they had not, quickly got off the phone and oftentimes did not need to call back.

The 1977 movie “Black Sunday” portrayed an attempted terrorist attack at a stadium on Super Bowl Sunday. If this fictional attack had succeeded, would that be covered by insurance? Read the policy. In a June 1, 2016, article on active shooter incidents in Best’s Review, one insurance attorney noted that such events “can trigger a host of coverages such as general liability, business interruption and property insurance-to name a few.”

With given products, an incident that does not result in damage to a property is not going to trigger coverage for the extra expense or business interruption. It is not like a car crash or a tornado. In reaction to perceived need, certain insurers have developed specialty policies that have been dubbed “active shooter policies,” to fill in the gaps. While it is difficult to contemplate, sports executives should examine their policies to determine if they have coverage and if not, if they have a need.


As featured in the Economist, major league sports have major league headaches softened by insurance for catastrophic injuries. The New York Times this past weekend, regaled us with how the Yankees decisions are muted by the ongoing Alex Rodriguez contract, which is starting to appear outsized for what is now an aging superstar. A certain proportion of injury risk is laid off on insurers, willing to take a gamble on the health of a major league player.

The soft and squishy part of these stories is likely played out in very private….what is an injury? Did the athlete take a dive? What is career ending? A surprising few of these matters end up in court, with the only one I can remember being the all-flop Brian Bosworth, who was never in the pros that which he was at Oklahoma. Maybe teams should start putting the names of their insurers on the backs of their players to defray the cost, but it is quoted in the Economist as only being four percent, which is a reasonable bet for the owners.


Suddenly you are lying by the side of the road, dazed, dusty, and injured. You know that you are not dead, but you also know that things are not good: the car is a twisted mess and your head hurts like hell. What is your first thought when you "come to"? No problem, I will turn it over to my insurance carrier. What is your second thought? Gosh, maybe I should have told them about my prior DUI when I filled out the insurance papers.  

You do not want this to be you  – whether in dealing with auto insurance or with athletes’ insurance. All policies that I have seen have an application to fill out. The application asks you for prior lawsuits or criminal history and prior matters that could give rise to a claim. At the end of the policy application, there is always a note that the application becomes part of the insurance policy and that failure to level with the insurer will void coverage. So, what does this mean? Treat it like a meeting with your doctor – tell them everything. Better to get it out in the open, then to worry about coverage being negative when you need it most.  

Yes, juries may not be crazy about insurance companies, but judges generally do not have that attitude and if they do, they bury it. However, judges routinely throw out cases where the policy application is false; in many states that falsehood does not even have to be material to get rid of coverage. As my 5th grade teacher used to say, "A word to the wise should be sufficient."   

By Jeffrey S. Kravitz, Esquire & Sekou Campbell, Esquire

Sam Kahn, Jr. of ESPN Radio recently reported that Johnny Manziel is exploring the option of "Exceptional Student-Athlete Disability Insurance," provided by the NCAA. The insurance coverage is reported to be routinely sought by players in Manziel’s position. Insurance, a frequent theme on this blog, poses interesting questions for college athletics generally, and for the "exceptional athlete" in particular.

Most critically, perhaps, insurance may be a way to reconcile the NCAA’s tension between amateurism and big-money media contracts. Generally, insurance is a type of compensation. Employees frequently receive health insurance, life insurance, retirement insurance and other forms of financial protection as part of their compensation. However, the actual payout is generally deferred until a "triggering event."
The Exceptional Student-Athlete Disability Insurance Program, however, limits who can pull the "trigger" and makes the "trigger" itself tiny compared to the potential losses all student athletes face. The policy provides coverage for a limited number of athletes (top round draft picks in baseball, basketball, football, and men’s hockey), charges a premium (though there is a mechanism for impecunious players to acquire the necessary coverage), and pays out in a limited number of circumstances ("permanent total disability," requiring what amounts to a career-ending injury).
However, the NCAA’s insurance policy is, at worst, a tepid acknowledgment that at least some of its athletes bear a burden by playing NCAA sports. Advocates for compensating athletes may be able to convince the NCAA that the success of its nearly 25-year old insurance program may be due for some broadening for two reasons.
First, this policy does not cover the "late bloomer" exceptional athlete. For instance, the current insurance policy would have likely excluded the likes of Scottie Pippen, Tom Brady, or Randy Johnson. Second, athletes who decide to "go pro in something other than sports," also bear a risk from injury. For instance, a student-athlete may suffer a hand injury foreclosing her from a career as a surgeon. There are obvious costs to expanding exceptional athlete insurance, but those can be captured in premiums, deductibles and other terms, as with any insurance package.

By Jeffrey S. Kravitz

As featured in the Toronto Globe and Mail a Canadian company that sells 95% hockey chatchkes is suffering mightily by virtue of the hockey lockout. Does the NHL owe that person anything…no, because it is a commercial relationship and not a fiduciary one. What is a fiduciary? It is a person or institution that owes another the highest duty of good faith. Think a trustee or dare I say it, a lawyer. The law imposes superior obligations on such folks by virtue of the trust imposed in them. The NHL….likely nada. How could the vendor have protected himself?  He could have tried to put a clause in his license contract with the NHL that required them to pay him in the event of a strike or lockout (good luck). Perhaps he could have obtained business insurance that did the same thing. Or he could have diversified as stated in the article to Major League Baseball or the NBA. The lesson? As presidential advisor Bernard Baruch once remarked, "if you are going to put all of your eggs in one basket, watch the hell out of the basket."


By Jeffrey S. Kravitz, Esq.

I am not going to debate the bona fides of the decision to cancel the NYC Marathon. Beyond my pay grade. But ultimately this comes down to insurance. 



A lot of people are going to suffer a lot of hurt. Start with the event itself…..what happens to the contracts to televise the event.


Is the event cancelled by an act of God, in which case there is a bad case to be had against the organizers of the event. Whose decision was it? Government’s or the event’s? (Could they really put on the event without government help?) Does the event have a case against the City for want of fulfilling its contractual obligations?


I was a partner at a firm that did a lot of insurance work. Clients and lawyers (who wanted to hire me as a consultant) would call and ask if they had insurance for a given problem. My first question always was….have you read the policy? In most cases they had not obtained the policy. Many entities have business interruption insurance, but until they read and interpret the terms, "no one knows nothin’ about nothin’.’" (Samuel Goldwyn)  


As featured in BusinessWeek.com on December 30, 2010, the question looming over the NFL playoffs is the possibility of a strike next season. The players’ union has estimated the cost of such a strike at $160 million and has written the nation’s governors and mayors regarding this potential loss.

What goes unstated is whether either side has strike insurance to "share the wealth" with carriers, foreign or domestic. This writer worked on the baseball strike of ’88, which was insured in part. The insurers in turned reinsured the risk through other carriers. Reinsurance is basically a side bet by the insurer with another company so that the entire risk does not fall on one carrier or underwriting group. Insurance law and reinsurance law is basically the law of contracts with a heavy dose of public policy thrown in.


So when the figure of $160 million is used, the question becomes, who will bear the ultimate risk?