NIL deals have transformed college sports. Student-athletes can now earn millions of dollars each year. This influx of cash has also raised the stakes for malpractice claims. A malpractice suit could include lost NIL earnings as damages. Physicians who work with college athletes, would be wise to review insurance coverages regarding this increased risk.
Working with college and professional athletes has long been a lucrative business strategy for orthopedists, physical therapists, trainers, and other medical professionals. A relationship with a university athletic department or professional sports franchise can generate a pipeline of consistent and profitable business for a healthcare provider.
However, caring for high-performing athletes can also mean more risk. Medical malpractice is a sizable risk for any physician, but it can be especially costly when working with athletes. A recent judgment involving a former NFL player concluded with a $45 million verdict against an orthopedic surgeon and his practice.1
The development of Name, Image and Likeness (NIL) deals for college athletics has added complexity to the medical malpractice market. A college athlete who files a malpractice suit could include lost NIL earnings in the claim, expanding the potential risk for healthcare professionals.
As the NIL landscape evolves, retail insurance agents and their healthcare clients would be wise to thoroughly review malpractice coverage needs. Informed insurance agents aware of the many changes in the college sports arena will be better positioned to protect their physician clients from increased cost and risk.
THE SIZABLE MALPRACTICE RISK ASSOCIATED WITH ATHLETES
Many orthopedists and sports trainers dream of working with a university or a professional team. Such a relationship can lead to financial rewards and an enhanced reputation within the community. However, malpractice cases involving athletes can lead to significant damages.
The case of former Philadelphia Eagles captain Chris Maragos is a recent example of how costly an athlete-related malpractice case can be. Maragos recently won a $45 million judgment against an orthopedic surgeon after alleging that the physician and his practice pushed Maragos into rehabilitation too soon after a 2017 surgery for a torn meniscus. Maragos never returned to the field and lost millions in future earnings.1
In 2022, NFL quarterback Tyrod Taylor filed a $5 million claim against the San Diego Chargers team doctor over an injury Taylor suffered while under the physician’s care. Taylor alleged the doctor punctured his lung while trying to administer a painkiller.2
Malpractice suits aren’t limited to professional athletes. A former women’s basketball player at Southern Methodist University (SMU), filed a malpractice suit against the school and its medical staff in 2020 over a knee injury she suffered in 2017.3 More recently, a 2023 malpractice suit filed by a Penn State football player led to the termination of the physician as the team doctor.4
NIL ADDS NEW ELEMENT TO ATHLETIC MALPRACTICE SUITS
Generally, malpractice suits for college athletes haven’t included the same level of damages as suits filed by professional athletes. Since college athletes have historically not been compensated, there was a natural limitation to how much damage an athlete may suffer due to medical malpractice that ends their collegiate athletic career.
However, the new NIL rules have changed everything. NIL rules were implemented by the NCAA in 2021 in response to multiple lawsuits over student-athlete compensation. The rules allow student-athletes to be compensated for the use of their “name, image, and likeness.” This means they can be paid for endorsements, advertisements, apparel, appearances in media, and even sponsored social media posts.5
Since the initial rule implementation in 2021, the NIL landscape has evolved rapidly. While student-athletes are paid for endorsements and sponsored social media posts, most NIL money has come through “collectives.” These are often 501(c)(3) organizations that exist separately from the university. Alumni, local businesses, and wealthy college boosters often form them.6
According to a study from OpenEndorse, a technology company that supports the athlete endorsement industry, 59% of the 362 Division I schools have NIL collectives. That number includes all 69 members of the “Power 5” conferences, which encompasses the ACC, Big Ten, Big 12, Pac 12, and the SEC.7
As one might expect, the substantial amounts raised by NIL collectives lead to hefty paydays for college athletes. The overwhelming majority of deals go to college football players. According to NIL tracking service On3NIL, the top 100 NIL valuations are allocated to the following sports:8
A recent NCAA settlement with former and current student-athletes has complicated the issue further. The NCAA agreed to pay $2.8 billion in back pay to more than 140,000 athletes over the next ten years.9
The case sets a significant precedent in the way student-athletes can be compensated. The settlement allows universities and conferences to share revenue with athletes and pay them directly as employees starting in 2025. These earnings would be in addition to any NIL compensation.9
TIPS FOR HEALTHCARE PROVIDERS AND INSURANCE AGENTS
College athletics is changing in unprecedented ways. The evolution of NIL deals and revenue sharing has completely upended the “amateur” status of college athletics. The influx of money increases risk for healthcare providers working with college athletics. A medical malpractice claim may now include damages for lost NIL compensation, revenue sharing, and even direct payments from the school or conference.
Many insurance carriers now manage limits carefully. It’s not uncommon to see a primary coverage max of $1M per claim with a $3M aggregate where exposure is contracted or known to be significant. Insurers may monitor the class, managing aggregate more specifically relating to territory, teams, physicians, or types of sport.
Fortunately, there are steps retail insurance agents and their healthcare clients can take to help mitigate the risk:
Employ strong risk management protocols. This includes careful management of and adherence to concussion protocols. It’s also wise to partner with specialized insurance brokers and attorneys who understand the nuances of the sector and manage consent forms / processes carefully in alignment with specialized legal oversight. In addition, second and third medical opinions should be encouraged. Insureds should guard against forced care from one provider or group and encourage care diversity for greater patient autonomy. This should be written into the contract, if possible.
Comply with all university policies. Many malpractice claims start with a divergence between medical care and university policy. A healthcare provider may offer advice or treatment that differs from the stated policy of the university athletic department. When providers diverge from department policy, they often shift the liability from the university to themselves, thus increasing their own risk. Similarly, careful management of, and adherence to, contracts and collective bargaining agreements is also key.
Document all communication. Many claims also start with differing accounts of communication and advice. For example, an athlete may say they were advised to return to play or begin rehab before they were ready. Healthcare providers need to document all advice, treatment, and recommendations clearly to ensure there is a written, physical record if a claim is filed.
Prioritize long-term health over return to play. In college sports, there is often a conflict between a quick return to play and treatment for long-term health. For many reasons, it’s essential to prioritize long-term health. From a liability perspective, it’s important to recognize that significant future earnings could be sacrificed if a player is rushed back too soon.
Shop your coverage. As recently as a few years ago, malpractice coverage for college sports physicians was not a complicated market. However, the NIL rules have changed everything. If a physician has not reviewed their coverage in several years, now is likely a good time to do so. Many carriers and policies are not robust or comprehensive enough to cover a significant claim that includes lost NIL earnings as damages.
BOTTOM LINE
It’s a whole new world for college athletes and the healthcare providers who treat them. A malpractice claim for a high-level athlete can easily extend into seven-figure territory.
An experienced wholesale broker can help retail insurance agents find the proper protection for their healthcare provider clients. CRC partners with many carriers in the malpractice space, including those covering college athletic orthopedists and other physicians. Contact our experienced healthcare brokerage team today to find the right coverage for your physicians, orthopedists, sports trainers, and more.
CONTRIBUTORS
END NOTES
- Former Philadelphia Eagles captain Chris Maragos awarded $43.5 million in medical malpractice case, CNN, February 15, 2023.
- Tyrod Taylor sues Los Angeles Chargers team doctor for medical malpractice, seeks at least $5 million after 2020 punctured lung, ESPN, September 18, 2022.
- Judge denies dismissal motions in ex-SMU women’s basketball player’s lawsuit against school, team doctor, The Dallas Morning News, September 15, 2020.
- Penn State player’s medical malpractice suit exposed doctor’s shortcomings, ex-athletic director says, The Daily Item, May 29, 2024.
- NCAA Name, Image, Likeness Rule, NCSA College Recruiting, NCAA, June 30, 2021.
- NIL is everywhere in college sports. But what exactly does it mean?, Washington Post, February 21, 2024.
- On3 Top 100, ON3NIL, June 18, 2024.
- NCAA signs off on deal that would change landscape of college sports - paying student-athletes, NBC News, May 23, 2024.