The CDC estimates that almost 3 million Americans were affected by concussion or traumatic brain injury (TBI) related emergencies in 2014, with almost a third of those events impacting children.
It can be difficult to quickly diagnose a concussion and while care protocols exist, they are still being developed and refined. Regardless, neuroscience is very clear that the latent effects of repeated or severe concussion can include devastating consequences such as Dementia, Alzheimer’s Disease, other permanent brain damage, or even death (source).
As a country that loves to watch and play contact sports, the risk and effects of concussion were initially brought to the forefront of U.S. news when large sports organizations were hit with concussion liability litigation, ultimately costing millions. The first case of long-term brain injury was discovered in an NFL player in 2005, and thousands of lawsuits based on the latent effects of brain injury have been filed since. Class action suits have also been brought against the NHL, NFL, and NCAA (source). An April 2015 settlement of almost $1 billion dollars was granted to 20,000 retired NFL players diagnosed with brain diseases including Chronic Traumatic Encephalopathy (CTE) (source). Recent records indicate that NFL players reported 271 concussions in 2015, an increase of 32% over the prior year, and the highest number reported since the NFL began tracking the cases in 2011.2 Similarly, the NHL recently reached a preliminary settlement with over 300 retired players worth $18.9 million, and the NCAA tentatively settled a class action lawsuit including more than 4 million members for a staggering $75 million (source). As of January 2019, similar concussion-related lawsuits including 18 sports or activities have been filed in 29 states (source).
The health and wellbeing of players isn’t the only thing hanging in the balance. Litigation has begun to affect schools and public entities, putting the continued viability of professional, collegiate, high school, and recreational sports teams in question as the availability of insurance drops and premium costs rise. Not long ago, a school district was required to pay $7 million to a former high school football player’s family after he received a severe head injury during a game. The suit indicated that school staff didn’t appropriately recognize or address the student’s concussion symptoms (source). While the liability may seem obvious with sports like football and hockey, the risk of brain injury affects other activities including gymnastics, horseback riding, water sports, snowboarding, and wrestling (source). There is also the potential for litigation against related entities, such as athletic equipment retailers (source). Regardless of the activity, litigation has mostly centered around failing to appropriately advise players of the risk, providing inadequate protection from injury, and failing to accurately diagnose or treat head injuries due to a lack of training for staff and coaches (source).
While continuing pressure from litigation has led to recent improvements in safety across the board, the larger discussion around reducing concussion risk continues to take shape. The responsibility for mitigating risk is now falling to sports organizations at all levels, including the physicians, coaches, and trainers with which they work (source). The NFL has invested millions in concussion research, changed multiple rules, and formed the Heads Up program in an attempt to reduce the likelihood of head injury (source). At the state level, Washington’s Lystedt Law, signed in 2009, prohibits youth athletes with a potential concussion from returning to play without the release of a licensed physician. Similar laws regarding youth athletics have since been passed in all 50 states (source). At the federal level, H.R. 280, the “Concussion Awareness and Education Act of 2019” was brought before the U.S. House of Representatives in January of this year, and is pending review. Should the law pass in its current form, it would require the CDC to create a national system for confirming the incidence of youth concussion and task the NIH with conducting concussion-related research in collaboration with federal entities, state high school sport associations, parents, students, and coaches (source). While it remains unclear how the steady flow of litigation and potential law changes will affect sports, and subsequently the insurance industry, it is expected that the impact will be substantial (source).
Already many sports teams, recreational departments, youth leagues, and school districts across the country face the challenge of rising insurance costs with fewer coverage options available (source). In 2018, Arizona’s Maricopa County Community Colleges abolished football programs at 4 schools, due to rising insurance costs and liability. Further east in Hawkins County, Tennessee, the local recreation department saw insurance costs for their tackle football program soar 27%, leaving the program’s future viability in doubt (source). Some have seen rate increases as high as 65%, and rate relief isn’t expected any time soon because many carriers have pulled out of the space, leaving less incentive to price risks competitively.
When it comes to insurance, the impact of many sports injuries is reasonably simple to assess because the costs related to the injury are well established. The recovery time and medical costs around an arm fracture or a shoulder dislocation are clear. However, in the case of brain injuries, it can be decades before the full effects of the injury are known. For example, individuals diagnosed with CTE typically don’t present with symptoms until about 8 years after the trauma occurs (source). This is why brain injuries are generally considered long-tail claims – because they can require payment for unknown periods based on expensive legal fees and long-term medical bills (source). Some in the insurance industry have gone so far as to draw comparisons between current concussion liability issues and the asbestos crisis. Similar to 25 years ago, today’s medical community is still working to generate risk awareness and create functional precautionary protocols, while insurers struggle to place the potentially massive risk (source). Those who disagree with the comparison suggest that the line of direct causality was easier to draw with asbestos exposure, making issues around liability clearer than they often are with concussion-related claims.
The current market response is varying from employing concussion liability exclusions individually based on each organization’s sport and adherence to risk management protocols, to completely excluding coverage for concussion risks or imposing strict coverage limits (source). Other companies are requiring the use of technology such as neuropsychological testing kits or the creation of concussion management plans (source). As the issue of concussion risk continues to evolve, the insurance industry must continue to invest in gaining a better understanding of the potential exposure and providing fresh solutions to manage the risk in partnership with sports teams, public municipalities, universities, and other organizations. As technology and medicine improve the prevention and detection of concussions, the insurance industry’s ability to appropriately manage and cover the risk will improve as well (source). When determining your insurance needs, it’s vital that sports teams, school districts, municipalities, and other affected organizations partner with insurance specialists who have a deep understanding of and extensive history managing sports-related risks (source).
The cost of failing to adequately manage and cover concussion-related risks can be devastating, especially for school districts, recreational departments, and other organizations least able to handle a huge financial hit (source). Managing these risks requires that each organization take seriously the need for safety equipment, concussion protocol training, and adherence to governing body guidelines or youth athletic participation laws.
While the issues and applicable law around brain injuries continue to evolve, it is important to collaborate with insurance specialists who can best help you quantify the potential risk and make well-informed decisions. While more markets are beginning to exclude concussion liability coverage, there are still markets that will cover it. CRC Group continues to place large volumes of business with those markets and you can depend on our expertise and network of strong partnerships to help you access those markets that continue to provide the coverage. Make it a point to start the renewal process as early as possible, allowing sufficient time to address any new coverage issues, and contact your CRC Group producer to discuss how we can best help your clients when it comes to concussion-related risks.
Contact a CRC Group producer for more information.
- Terry Winkler is a Senior Vice President, Casualty Broker in the CRC Chicago office and member of the National Casualty Practice Group.
- Jenny Kosoff is a Vice President, Casualty Broker in the CRC Chicago office and member of the Casualty Practice Advisory Committee.
- Ben Merris is a Senior Vice President located in the Middletown, CT office and specializes in public entity risks.