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Athletes play hardball over concussions

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Increased awareness about the long-term effects of concussions could lead some insurers to exclude head trauma from policies for professional athletes, experts say.

Additionally, as a fresh wave of concussion-related litigation hit several professional sports leagues last month, pricing for professional athletes' insurance could rise, they say.

While the 3rd U.S. Circuit Court of Appeals in Philadelphia approved a class action settlement in April that could cost the National Football League $1 billion for allegedly failing to protect players from health risks associated with head injuries, retired NFL players in mid-July also sued Riddell Inc. for allegedly failing to warn them that company's helmets wouldn't prevent brain injuries.

Former professional wrestlers also sued World Wrestling Entertainment Inc. in July for head injuries they sustained during matches, and a Carolina Panthers player who suffered a career-ending concussion in 2013 filed suit to collect benefits under his professional athlete insurance policy.

Meanwhile, a federal judge ordered the National Hockey League's workers compensation insurer, Chubb Ltd., to share redacted independent medical exams related to head trauma claims with retired players who allege the league didn't adequately protect them from concussions.

“Insurance companies should reasonably be concerned about providing insurance to individuals that play contact sports with head-to-head contact or repeated contact between a ball and one's head,” said Marc Edelman, a law professor and sports law expert at Baruch College's Zicklin School of Business in New York. “Unless the NFL decides to substantially change the nature of the sport, the risk portfolio for insuring professional football players will begin to look more like the risk portfolio for insuring professional boxers.”

That means “substantially elevated premiums,” Mr. Edelman said.

Sports-related brain injuries are a top emerging insurance claim in the U.S. and the U.K., but “effective emerging risk management” by insurers can prevent such claims from becoming as costly as asbestos-related claims, Standard & Poor's Corp. said last week in an analysis.

“U.S. insurers have learned from their experience of asbestos-related claims, and are increasingly drafting exclusion clauses for concussion claims and capping concussion lawsuit payouts,” S&P said. U.K. insurers also should take steps to reduce their potential exposures, according to the rating agency's London analysts.

There's only so much an insurer can charge for a policy that excludes “what could be, and likely will become, the No. 1 career-ending injury” among professional football players, said John W. Schryber, a partner at law firm Reed Smith L.L.P. in Washington.

“You can't exclude your way to profits,” added Mr. Schryber, who represents Haruki Nakamura, the Carolina Panthers player suing underwriters at Lloyd's of London for not honoring his $1 million career-ending injury policy.

Although two physicians said Mr. Nakamura was permanently disabled after suffering a concussion during a preseason game, an insurer-appointed medical examiner said he can continue to play football but urged him to consider the “probable long-term effects of repetitive concussions,” according to the complaint.

While some underwriters have started excluding cumulative head trauma from their coverage, Pro Financial Services L.L.C. will not take that path, said Dan Burns, president of the Chicago-based specialty risk underwriter.

Some insurers will even “pull out of the class because of what they consider unknown future exposure,” he said. The fact that more players are sitting out for extended periods of time or retiring early as a result of head trauma does have “to be factored into the way we rate our products.”

The increased awareness generated by recent lawsuits — namely the class action suit against the NFL — is likely to spur lawsuits from athletes in other sports, experts say. Whether that means more billion-dollar settlements remains to be seen.

In a statement, the WWE said it's “confident” the suit filed by more than 50 former professional wrestlers in a New Haven, Connecticut, federal court will be dismissed.

U.S. District Judge Vanessa Bryant in Hartford, Connecticut, in March dismissed similar complaints, stating that the plaintiffs “were financially compensated to engage in an activity in which physical violence was a known and even purposeful part of the activity.”

A main difference in the WWE case is that wrestlers didn't wear helmets they believed would protect them against head trauma, said Thomas Demetrio, a partner at Chicago-based Corboy & Demetrio, which represents Paul Hornung and other former NFL players in the lawsuit against Riddell.

Before the litigation that increased awareness and prompted an NFL concussion protocol, “players didn't want to know, coaches didn't want to know, doctors didn't want to know,” Mr. Demetrio said. “These guys wanted to play football. If they got dinged, they oftentimes wouldn't even tell anybody because they knew there was somebody else just waiting for them to be hurt so they could take their place.”

The key for employers of professional athletes or construction workers, for example, is “making sure they don't return to work until they have been released by a neurologist that knows what he's doing,” Mr. Demetrio said.

He added that premiums for workers compensation insurance might be high, but if workers are required to heal properly before returning to the game or to work, “that's a good thing for everybody.”

Meanwhile, insurers have rallied since the NFL's class action settlement covering more than 20,000 retired football players to obtain depositions of league officials and third-party physicians that could help them avoid indemnifying the league. A New York state judge in April sided with insurers.

“What was disappointing to me as part of the NFL settlement was, we got no discovery,” said Mr. Demetrio, who was involved in that case. “We learned nothing as to when the NFL knew about long-term damage, and that's one of the reasons the case settled, so there wouldn't have to be disclosure.”