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07-23-2011, 08:32 PM
  #1
LPHabsFan
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Insurance

How exactly does insurance work. More specifically with regards to salary. I recall a number of years back there being reference to salaries being paid by the insurance companies when a player is injured rather than team.

Is this true? And if so, what impact do you think this has on teams willing to sign players to contracts who were injured in terms of weighing paid salary versus insurance cost increases and whatnot.

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07-23-2011, 08:41 PM
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5lidyzer19
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Edit: I think I misunderstood exactly what you meant. Nevermind, I'll let someone who knows more than me about this answer.


Last edited by 5lidyzer19: 07-23-2011 at 08:49 PM.
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07-23-2011, 08:45 PM
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kdb209
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Quote:
Originally Posted by LPHabsFan View Post
How exactly does insurance work. More specifically with regards to salary. I recall a number of years back there being reference to salaries being paid by the insurance companies when a player is injured rather than team.

Is this true? And if so, what impact do you think this has on teams willing to sign players to contracts who were injured in terms of weighing paid salary versus insurance cost increases and whatnot.
C & P from the Will Savard get paid if he retires? thread:

Quote:
Originally Posted by kdb209
Quote:
Originally Posted by jessebelanger View Post
I believe the most likely scenario is that he would report to camp each year and be put on the LTIR. IIRC a flyer did this..I forget who.

The result is that

A) Savard gets his money

B) Bruins are provided cap relief (putting him on LTIR allows them to go over the cap by an amount equal to his cap hit)

C) Bruins would have insurance on the contract of some form, so they would have some financial relief.

I'm sure KDB will chime in shortly with the exact scenario
Yup.

The Bruins are responsible for paying the remainder of Savard's salary - they may have insurance to cover all or part of it.

Savard will not retire - ie file to be placed on the "Voluntarily retired List" - if he did, he would forego his remaining $$$.

Instead he will simply be placed on LTIR for the remainder of his SPC (a la Rathje).

Virtually all insurance is under a group policy through the League. Not every contract is insured.

Teams typically only insure 5-7 SPCs through the League's group insurance plan. Coverage kicks in after 30 games. Coverage only covers 7 years max.

Additional insurance through secondary markets is prohibitively expensive.

C&P from another long term contract thread.

Quote:
Originally Posted by kdb209
Quote:
Originally Posted by Piffle
Pretty sure that insurance for player contracts already doesn't go past about 7 years, and that the team covers anything past that. Anyone confirm?
Yup - insurance through the league covers at most 7 years. Private insurance is prohibitively expensive.

http://www.sportsbusinessdaily.com/article/123913

Quote:
NHL Insurance Plan Covers Player Contracts For Seven Years

The NHL's insurance plan insures player contracts for seven years, and "beyond that, if the player gets hurt, the team is on the hook for the full amount of his contract," according to Luke DeCock of the Raleigh NEWS & OBSERVER. As part of the plan, which the NHL purchases through New York-based insurance broker BWD Group, NHL teams are "required to insure a handful of players through a 'temporary total disability' program administered by the league." Each team "pays a premium based on the salaries of its five highest-paid players, but is free to allocate that coverage how it wishes." NHL Deputy Commissioner Bill Daly said that "typically, a team will extend coverage to as many as seven players."
...
DeCock noted individual teams "are free to pursue additional coverage, but the heavy premiums make it a losing proposition." Rutherford said that "seeking private insurance to cover a longer deal is prohibitively expensive."
Quote:
Originally Posted by Wetcoaster View Post
After the maximum period covered by NHL disability insurance for example the Isles on the Dipietro contract would have to buy supplementary insurance for the remaining eight years which can be prohibitive or self-insure.

Also it does not cover all the players on the roster. This was written during Eric Staal's contract negotiations and focuses on contract length and insurance issues:

Quote:
The league purchases its disability insurance through the BWD Group, a Long Island, N.Y., insurance broker that also obtains coverage for the NBA, WNBA and Major League Baseball. (One underwriter, the Chubb Corporation, touted its relationship with the NHL in its 2001 annual report.)

Each team pays a premium based on the salaries of its five highest-paid players, but is free to allocate that coverage how it wishes. Typically, a team will extend coverage to as many as seven players, Daly said. Coverage kicks in when a player misses at least 30 games.

Beyond that, individual teams are free to pursue additional coverage, but the heavy premiums make it a losing proposition. To insure a player under the league program, it costs about 5 percent of his salary. To insure additional players, it would cost substantially more.

“Usually it works out that we have five players under the league program,” Rutherford said. “When you get to a certain dollar amount, the premiums keep skyrocketing. I wish it was easier to get each [player] insured, but we can’t do that. …

“If you wanted, you could insure all the contracts, but it would be very expensive.”
http://proathletesonly.com/news/feat...nhl-contracts/
Most of this info came from a piece originally in the News & Observer. That article seems to be no longer available at the N & O website - but this link a copy of the article:

http://insurancenewsnet.com/article....7b000000c1027a

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