Big League Disability Contract Contrasts

When it comes to specialty disability insurance in major league sports, not all contracts are created equal.

* The National Football League: Salaries in the National Football League aren't guaranteed, unlike in baseball. However, the NFL Players Association contract with team owners provides disability benefits to players as part of the collective bargaining agreement. The insurance is funded by team owners.

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Benefits for the players began in 1982 and have increased with each new agreement approved by the association, according to Carl Francis, the director of communications for the NFLPA. The chart indicates how annual benefits have increased in the past two decades.

Signing bonuses in the NFL, unlike salaries, are guaranteed. Leigh Ann Rossi, the vice president of the sports, entertainment and special risk division at BWD Group LLC, said many NFL teams use disability insurance to cover the cost of bonus money that has to be paid out over the life of the contract.

"This type of insurance is perfect for bonus money," said Rossi. "Nobody wants to be paying out bonus money to a player who might have been cut or injured years before."

* The National Basketball Association: Player contracts are guaranteed in the NBA, and the collective bargaining agreement with the NBA Players Association requires teams to provide disability insurance to protect the salaries of each of its top six players. Owners have the option to provide coverage for additional players. There are 12 players on each team in the NBA.

* The National Hockey League: The collective bargaining agreement with the National Hockey League is similar, but it only mandates coverage for the top five players on each team. There are 25 players on the roster of each team in professional hockey.

Rossi pointed out that the ultimate determination on which players will be insured is normally based on salary and length of contract. BWD administers the disability insurance programs for the NBA and NHL.

October 15, 2006

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