Who Is Looking Out For Student-Athletes When Schools Purchase Disability Insurance For Them: A Case Study

Richard C. Giller

Richard is a partner in the Insurance Recovery practice group in the Southern California offices of Reed Smith, LLP, with over thirty-three years of experience crafting litigation strategies for complex insurance and commercial disputes. He has a significant breadth of experience in analyzing coverage and handling claims arising under permanent total disability and loss-of-value insurance coverages for athletes and teams. He can be reached at rgiller@reedsmith.com.

There is an emerging trend in college sports where schools use money received from the NCAA Student Assistance Fund to purchase permanent total disability (PTD) insurance policies, some of which include a loss-of-value rider, for high-profile student-athletes to help protect their future earnings. As an outspoken proponent of any student-athlete who is projected to be a top draft pick taking full advantage of school-purchased insurance, this author has become increasingly concerned about who is—and who should be—helping student-athletes understand the intricacies of disability insurance and navigate the inevitable hurdles insurance companies will construct if the athlete ever needs to file a claim for benefits.

Because the NCAA prohibits student-athletes from hiring a financial advisor or a sports agent while still in school, the question that arises is who is charged with looking out for the athlete and his or her best interests when it comes to disability insurance coverage and claims. Recent developments in a lawsuit filed in May 2018 by one such high-profile student-athlete have brought these concerns and questions into sharp focus. This article will examine these issues through the lens of that lawsuit.