[su_spacer size=”40″] Disability insurance for college athletes is easy to understand. Disability means total disability. If the player can no longer play football because of an injury. Simple. The check is in the mail.
[su_spacer size=”40″] That brings us to loss of value contracts and former USC, and current Jacksonville Jaguar, wide receiver Marquis Lee.
[su_spacer size=”40″] [su_quote style=”modern-light” cite=”ESPN” url=”http://espn.go.com/nfl/story/_/id/12429789/marqise-lee-jacksonville-jaguars-sues-lloyd-london-denied-insurance-claim”] Before the 2013 season, Lee, then preparing to play his junior year at USC, paid a $94,600 premium to Lloyd’s to cover him should he fall in the draft…
[su_spacer size=”20″] Less than two weeks later, Lee hurt his left knee in the Trojans’ game against Arizona State, and he never fully regained his position as the nation’s top receiver.
[su_spacer size=”20″] At the 2014 NFL draft, Lee was the sixth wide receiver taken when he was selected with the 39th overall pick by the Jaguars.
[/su_quote] [su_spacer size=”40″] Tuesday, Lee filed suit against Lloyd’s of London to collect on his recently denied claim. Insurance recovery lawyer Noel Paul (speaking before the claim was denied by Lloyd’s) warns that a positive outcome for the player will not be an easy score.
[su_spacer size=”40″] [su_quote style=”modern-light” cite=”Risk & Insurance” url=”http://www.riskandinsurance.com/loss-value-policies-face-first-test/”] “Top prospects that suffer similar fates should keep a number of thoughts in mind when filing their claims for loss of value,” Paul said. “As always, the main issue is how difficult will it be to collect. That’s going to set the tone for future claims.”
[su_spacer size=”10″] According to media reports, Lee’s policy limit is up to $5 million, which is in excess of the NCAA’s disability policy, also $5 million. However, Lee can’t collect on the NCAA policy because that would require “total disability,” not loss of value.
[su_spacer size=”10″] By falling from, say, a top 20 spot to 39, Lee could end up losing about $5 million based on previous contracts for players drafted at similar spots. Loss of value coverage was created to close that gap should an injury prove to be the deciding factor — certainly not a given considering there may be other reasons why someone could incrementally lose their draft status.
[su_spacer size=”10″] “Depending on the wording of his policy,” Paul said, “Lee likely will have the burden of showing that he fell in the draft because of the injury he sustained during the 2013 season, and not for other reasons.”
[su_spacer size=”10″] For example, Noel said, the insurer conceivably could point to comments by draft analysts that Lee was a “less polished” receiver than others in his class, or that his performance in 2013 suffered from the loss of other top players on his team through graduation, as much as because of his leg injury.
[su_spacer size=”10″] Of course, Noel noted, Lee’s insurer will be mindful that the results of the claim could be discovered and publicized, and that denial of coverage could squelch interest in an increasingly popular, and profitable, coverage area. On the flip side, a grant of coverage could create false expectations for other athletes submitting a similar claim.
[su_spacer size=”10″] “College athletic departments, agents, insurers and elite players and their families will be paying close attention to the results of Lee’s claim,” Paul said.
[/su_quote] [su_spacer size=”40″] Gurley will likely have to prove that his ultimate position in the draft is lower than it would have been had he not been injured and his contract value at his pre-injury draft position before he can collect the difference (up to the $5 million limit) from his insurer.
[su_spacer size=”40″] Over/under on time to settle? The number is 2 years from Gurley’s draft date.