How does the NHL handle injury insurance?

[salsa man]

So, how does the NHL handle injury insurance? Who and how much do they pay per month? Do different teams pay different amounts? And what's covered and what's not?

I'm curious to see how this entire process works.

Click to read more...

 

[Fugu]

Overview:
http://hfboards.mandatory.com/showthread.php?t=1219943&highlight=insurance

Only five years vs seven after 2012:
http://hfboards.mandatory.com/showthread.php?t=1286305&highlight=insurance

NHL partners with Geico:
http://puckthemedia.wordpress.com/2...re-than-just-those-winter-classic-kids-games/

 

[kdb209]

C&P from some old insurance threads.

Note that the sources here are a bit dated ( 2008), but AIUI the current system is basically similar.

Found this on the Trade/FA forum. It offers some insight into insuring player contracts. I thought that contracts greater than seven yrs in duration were could not be covered by the league's policy; however the article seems to imply that only the first seven yrs can be covered. [waits for 'you know who' to saunter along]

I'm guessing that I'm "He-Who-Must-Not-Be-Named".

This has always been the case - at least going back to the 2008 News & Observer piece - which is really the only place we've seen any details of the League's policy with BWD.

Sep. 10--RALEIGH -- When negotiations conclude on a long-term contract extension for Carolina Hurricanes superstar center Eric Staal, a process that could end soon, there are two certainties about what that contract will look like.

One, it's going to be for a ton of money, the most the Hurricanes have ever paid a single player. Two, it's not going to be for any longer than seven years.

Not because the Canes don't want Staal around any longer than that -- clearly, they do -- but because the NHL's leaguewide insurance plan will only insure player contracts for seven years.

Beyond that, if the player gets hurt, the team is on the hook for the full amount of his contract. Seeking private insurance to cover a longer deal is prohibitively expensive, Hurricanes general manager Jim Rutherford said.

...

While Staal's new contract would almost certainly be one the Canes chose to insure under the league policy, only the first seven years would be covered. If he suffered a career-ending injury in the first year of a 10-year contract, the Hurricanes would be owe Staal upwards of $20 million for the last three years of the deal.

Can't they just insure the 1st 7 years of the deal?

Even under the existing group plan, the insurer has the right to exclude specific coverage based on previous injuries - ie they could insure Crosby against knee (or other) injuries but explicitly exclude coverage for concussions or concussion related symptoms.

edit: Here is a link to a copy of a bit dated Raleigh News & Observer article from 2008 - which was the source for several articles and posts here on the League's insurance program.

http://insurancenewsnet.com/article.aspx?n=1&neID=200809101180.3.167_d47b000000c1027a

Teams are required to insure a handful of players through a "temporary total disability" program administered by the league. That program has been in place for about 15 years, NHL deputy commissioner Bill Daly said, and is designed to make coverage more easily available to teams.

"It provides the underwriters with 'scale,' spreads the risk and allows them to provide more favorable rates," Daly said in an e-mail.

The league purchases its disability insurance through the BWD Group, a Long Island, N.Y., insurance broker that also obtains coverage for the NBA, WNBA and Major League Baseball. (One underwriter, the Chubb Corporation, touted its relationship with the NHL in its 2001 annual report.)

Each team pays a premium based on the salaries of its five highest-paid players, but is free to allocate that coverage how it wishes. Typically, a team will extend coverage to as many as seven players, Daly said. Coverage kicks in when a player misses at least 30 games.

Beyond that, individual teams are free to pursue additional coverage, but the heavy premiums make it a losing proposition. To insure a player under the league program, it costs about 5 percent of his salary. To insure additional players, it would cost substantially more.

"Usually it works out that we have five players under the league program," Rutherford said. "When you get to a certain dollar amount, the premiums keep skyrocketing. I wish it was easier to get each [player] insured, but we can't do that. "If you wanted, you could insure all the contracts, but it would be very expensive.".

...

The Hurricanes were able to insure Justin Williams last season despite a previous injury to his right knee, Rutherford said. They received insurance payments when he missed more than three months with a serious injury to the same knee, but they wouldn't be able to insure that knee again this season.

C&P-ing some more old insurance posts.

Pretty sure that insurance for player contracts already doesn't go past about 7 years, and that the team covers anything past that. Anyone confirm?

Yup - insurance through the league covers at most 7 years. Private insurance is prohibitively expensive.

http://www.sportsbusinessdaily.com/article/123913

NHL Insurance Plan Covers Player Contracts For Seven Years

The NHL's insurance plan insures player contracts for seven years, and "beyond that, if the player gets hurt, the team is on the hook for the full amount of his contract," according to Luke DeCock of the Raleigh NEWS & OBSERVER. As part of the plan, which the NHL purchases through New York-based insurance broker BWD Group, NHL teams are "required to insure a handful of players through a 'temporary total disability' program administered by the league." Each team "pays a premium based on the salaries of its five highest-paid players, but is free to allocate that coverage how it wishes." NHL Deputy Commissioner Bill Daly said that "typically, a team will extend coverage to as many as seven players."
...
DeCock noted individual teams "are free to pursue additional coverage, but the heavy premiums make it a losing proposition." Rutherford said that "seeking private insurance to cover a longer deal is prohibitively expensive."

After the maximum period covered by NHL disability insurance for example the Isles on the Dipietro contract would have to buy supplementary insurance for the remaining eight years which can be prohibitive or self-insure.

Also it does not cover all the players on the roster. This was written during Eric Staal's contract negotiations and focuses on contract length and insurance issues:

The league purchases its disability insurance through the BWD Group, a Long Island, N.Y., insurance broker that also obtains coverage for the NBA, WNBA and Major League Baseball. (One underwriter, the Chubb Corporation, touted its relationship with the NHL in its 2001 annual report.)

Each team pays a premium based on the salaries of its five highest-paid players, but is free to allocate that coverage how it wishes. Typically, a team will extend coverage to as many as seven players, Daly said. Coverage kicks in when a player misses at least 30 games.

Beyond that, individual teams are free to pursue additional coverage, but the heavy premiums make it a losing proposition. To insure a player under the league program, it costs about 5 percent of his salary. To insure additional players, it would cost substantially more.

“Usually it works out that we have five players under the league program,†Rutherford said. “When you get to a certain dollar amount, the premiums keep skyrocketing. I wish it was easier to get each [player] insured, but we can’t do that. …

“If you wanted, you could insure all the contracts, but it would be very expensive.â€

http://proathletesonly.com/news/featured/insurance-limits-influence-nhl-contracts/

And here is a Wayback machine archive of the original 2008 N & O story where the info originally came from:

http://web.archive.org/web/20080914031612/http://www.newsobserver.com/796/story/1213270-p2.html

It has one comment on DP's contract - but no comment on whether the Isles were able to get add'l 3rd party coverage.

In September 2006, the Islanders signed DiPietro to a 15-year contract worth $67.5 million. The deal was held up for more than a year, in part by insurance issues, according to reports at the time.

The league policy, at that point, would only insure six years of the contract, leaving the Islanders potentially responsible for more than $40 million in the case of a catastrophic injury -- and in the first two years of the deal, DiPietro has suffered two concussions and undergone two hip surgeries.

An Islanders spokesman declined to comment on the insurance issues surrounding DiPietro's contract.

Also note, that even if DP is ever cleared to play and the Isles try to get extended coverage, the insurer (BWD) could make exclusions in coverage related to previous injuries.

This season, the Hurricanes will pay almost $1 million for $19 million of coverage through the league program, but even that process isn't simple. Insurers may balk at something as specific as an individual body part.

The Hurricanes were able to insure Justin Williams last season despite a previous injury to his right knee, Rutherford said. They received insurance payments when he missed more than three months with a serious injury to the same knee, but they wouldn't be able to insure that knee again this season.