Injury insurance...?

by BTown Birds fan on Jul 18, 2007 6:19 PM EDT Comment 5 comments

Apologies for the double post, but I just put this on the morning thread then saw that a game thread was up, and it seems like a reasonable topic/question for a diary.

Does anyone know what sort of insurance teams usually have on their high $$ players? I vaguely remember an insurance-related issue with Bagwell a couple years ago, where whether or not Houston could recover any of his salary for the year (from the insurance company, not him) depended on if/how much he played in spring training.

Taking Carp's example, it looks quite possible that he's done for this year, and maybe 2008 as well. Do the Cards have an insurance policy on him? Can we recover anything if he only pitches one regular season game this year? Can we recover anything if he doesn't pitch at all next year?

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Here's the quote about injury insurance:

Strauss: "The Cardinals were able to ensure Carpenter's elbow when they extended his contract last September, club officials said earlier this season. I do not know if there was an exemption for his shoulder, but that is not the body part in question, so the club should be covered."

by nycardfan on Jul 18, 2007 6:18 PM EDT reply actions 0 recs

He also went on to say

That it is typically for 70-80 percent of the contract and usually would not kick in if the pitcher was available in April and September. However, if Carp is not back at all this year, it seems a good bet that the Cards will be getting some compensation.

by OCCardsFan on Jul 18, 2007 6:30 PM EDT up reply actions 0 recs

IIRC

I thought the issue with Bagwell and the Astros was that they had played him in the World Series (limited/token pinch hitting, I believe) and then in the next spring training it was decided that his injury was too disabling to play for the remainder of his contract. The insurance company contended that his condition did not deteriorate between the WS to ST and since the team was able to use him in the WS, he was indeed able to play for the team and they did not need to pay the insurance policy.

by Elle on Jul 18, 2007 6:32 PM EDT reply actions 0 recs

Insurance policies on players

I read up on these policies a bit when the Bagwell suit was filed last year, and can provide a little general info. Policy terms are going to vary, of course, depending on what the ins. company and the team negotiate, but in general, the term of the insurance policy is the same as the contract with the player. (3 year contract = 3 year ins. policy.) However, pay-out features may be limited to one season, depending on the length of the player contract. I don't believe that the team would recoup all of his salary for the covered season, but it would come darn close. And, of course, the contracts do have exclusions to not cover injuries to body parts already known to be injured.

The real hitch is that the player usually must be deemed "totally disabled," under a def. that usually favors the insurance company, and insurance company docs usually have the final say in this sort of thing. Finally, "totally disabled" usually means "permanently disabled", but not always. (I believe this was the case with the Astros policy on Bagwell.)

Regarding Bagwell, I know that the Astros sued CIGNA - the insurance carrier - for breach of contract and eventually settled for an undisclosed sum. However, if memory serves, one of the complications in that matter was that Bagwell would not agree that he was totally disabled. Made it very tricky for the 'Stros to file a successful claim with their carrier when Bagwell was commenting to the media that he hoped to play still.

Just to give you an idea of the numbers involved, Bagwell's salary for 2006 was $17 m., and the Astros were looking to recoup $15.6 m. of that from CIGNA. Their policy premium for this coverage was $2.4 m., although I'm not sure if this was over several years or just the premium for 2006.

by ChiTown CardFan on Jul 19, 2007 2:25 PM EDT reply actions 0 recs

Thanks for all this info, ChiTown

It's crazy to think that a player has to be "permanently disabled" for the team to collect anything. That seems to create even more perverse incentives than most insurance policies do.

It'll be very interesting to see how much if anything the Cards get back for Carp's 2007/2008 salary, and how that affects their offseason moves.

by BTown Birds fan on Jul 20, 2007 11:31 AM EDT up reply actions 0 recs