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Concussion claims worry the insurance industry, and that means higher premiums, policy exclusions, and coverage disputes for sports leagues high and low, lawyers tell Bloomberg BNA.
The concerns are fueled by abundant concussion litigation, new medical research, and hints of an emerging toxic tort theory modeled after that used in asbestos litigation.
The NFL reached a $1 billion concussion settlement with retired players last year, but it was followed by a wave of litigation by insurers. They question their obligation to cover brain injury claims under policies that predate advances in diagnosing chronic traumatic encephalopathy.
CTE is a degenerative brain disorder associated with repeated head impacts like those that occur in football, ice hockey, and other sports. It currently can be diagnosed only after death.
“I think the ones that cause them concern, rightfully, are these asbestos-like, long-tail claims,” insurance defense lawyer John Mumford, of Hancock, Daniel, Johnson & Nagle, in Richmond, Va., said.
“You have someone showing up at age 60 saying, ‘I played Pop Warner, I played college, and I played in the pros for a few years, and during that time I was exposed to these hits and sustained bodily injury,’” said Mumford, who represents property and casualty insurers in coverage litigation.
“Which of those carriers is supposed to respond to that? said Mumford. “In what year was this person injured, and what was the bodily injury?”
The NFL is at the leading edge of disputes over the duty to defend and indemnify sports leagues enmeshed in sports-related latent brain injury litigation.
The league says it “paid millions of dollars in premiums” to 32 insurance companies for policies issued as early as 1968, and the insurers “have failed and refused to discharge their obligations to defend the NFL and NFL Properties in the injury lawsuits,” according to a 2012 complaint.
The suit filed in California Superior Court, Los Angeles County, prompted insurers to sue the league—and each other—to determine how overlapping primary and excess coverage policies apply to player concussion claims. The cases are pending in New York Supreme Court, New York County.
The NFL settled its disputes with six of its insurers and is “currently engaged is settlement discussions with certain of the remaining insurer parties,” according to an Aug. 4 court filing.
The coverage questions can be complicated by the need to interpret older general liability contracts, according to Pamela Young, associate general counsel for the American Insurance Association in Washington.
“A key coverage issue is the knowledge certain entities,” such as “the NFL, had of concussion risks, which is alleged to go back decades,” Young said in an email. “The date of bodily injury, or injuries, and efforts to stack policies or limits with respect to them are likely areas of dispute in some or all of the concussion coverage cases.”
AIA is the trade group for 320 companies in the property-casualty insurance industry, according to its website.
They cite the league’s failure to share information about player injuries, its alleged misconduct in concussion management, and disputes over what triggers stacked coverage policies dating back to the 1960s.
In the information-sharing context, at least, NFL insurers scored a win last year when the New York court rejected league assertions that discovery should await resolution of the underlying player concussion cases.
The NFL asserted it had an adversarial relationship with its insurers, who are “motivated in the same way as the tort claimants to create a record adverse to the NFL,” but the court ruled the insurance companies “have waited long enough” for league documents.
The disputes also include the National Hockey League and Riddell Inc., a major manufacturer of football helmets and frequent target of concussion litigation.
In 2014, TIG Insurance Co. sued the NHL in New York Supreme Court, seeking a determination of the insurer’s obligation to defend the league for underlying concussion class claims.
Riddell recently won a round of litigation against its insurer, Aspen Specialty Insurance Co., in the U.S. District Court for the Central District of California.
The court August 2 rejected Aspen’s argument that it had no duty to defend and indemnify Riddell for the costs of defending personal injury cases.
Increased risk avoidance may be the hallmark of future sports league insurance policies, according to Paul Haagen, director of Duke University’s Center for Sports Law and Policy in Durham, N.C.
“The trend may be to raise premiums or withdraw from markets,” Haagen said. “Insurers are being asked to insure against things that are extraordinarily uncertain.”
The long-term risks associated with concussions prompted one major insurance company, American International Group Inc., to stop writing head injury policies for Pop Warner youth football several years ago and the NFL last year.
A request for comment sent to AIG didn’t receive a response.
The insurance disputes are fanned by a stream of studies linking repetitive head trauma to later-life brain diseases, and plaintiffs who say sports leagues hid the dangers from them.
In July, a large-scale study of 202 deceased football players, more than half of them former NFL players, revealed high incidences of severe CTE, and even high school players showed early stages of the disease.
High-profile settlements of concussion claims against the NFL and the National Collegiate Athletic Association haven’t quelled the litigation.
The NFL still faces at least 150 cases in the U.S. District Court for the Eastern District of Pennsylvania filed by players who opted out of the 2016 settlement.
Still more cases against the NCAA persist in the Northern District of Illinois, left out of a tentative $75 million concussion class settlement reached with student-athletes last year.
Nor is the litigation confined to football.
Pretrial wrangling continues in the would-be class action brought by retired players against the NHL. That case is pending in the U.S. District Court for the District of Minnesota.
Litigation against youth leagues and high schools, where concussion reports have increased dramatically over the last decade, also is percolating in multiple state courts.
The cases include a fatal brain injury case in which the Washington Supreme Court ruled July 6 that a jury must decide whether a high school football coach was grossly negligent in failing to follow a state-mandated concussion protocol.
Leagues and their insurers can’t count on quick dismissals of brain injury claims stemming from decades-old head traumas.
At least one trial court compared such latent brain injury claims to asbestos litigation, salvaging CTE claims brought by the son of Arthur DeCarlo, who played in the NFL from 1953 to 1961.
The filing clock for DeCarlo’s claims was triggered when he was diagnosed with CTE in an autopsy, not when he reported cognitive symptoms decades before his death, the court said last year.
“This type of latent disease is comparable to asbestos cases where the injury occurred outside the statute of limitation period, however, the manifestation of the disease or illness is not developed or detected until years later,” the court said.
The ruling, which the NFL has appealed, appears to be the first in which a court applied a state-law “delayed discovery” rule for claims based on a diagnosis of CTE.
“While it is tempting to draw comparisons between these alleged injuries and other long-term exposure claims like injuries related to asbestos or lead, time will tell whether the courts adjudicating these cases will treat them similarly or not,” attorney Lauren Tucker McCubbin, of the Polsinelli Law Firm in Kansas City, Mo., said in an email.
McCubbin focuses on insurance recovery counseling and litigation.
Coverage questions may weigh heaviest on cash-strapped youth leagues.
“In lower level sports, there’s not enough money to support significant policy premium increases,” Haagen said.
An estimated 30 to 45 million youngsters participate in U.S. high school and youth sports leagues each year, and the activities account for a large percentage of reported brain injury cases.
Concussion diagnoses among adolescents “increased dramatically” from 2007 to 2014, according to a recent study of 8.8 million patient records published last year in the Orthopaedic Journal of Sports Medicine.
Concussion rates among 10- to 14-year-olds showed a 143 percent increase, followed by an 87 percent increase for 15- to for 19-year-olds, the researchers said.
“I’m getting tons of questions from coaches, referees, and parents about concussions and what the league is doing to protect them,” said Mumford, who heads a youth soccer organization in his spare time.
The questions may spur state legislation to better protect leagues and schools from civil liability, Haagen said.
“Given that there are real costs, we’re going to see a shifting of those real costs onto the general public,” he said.
Most states afford volunteer coaches immunity from civil suits, limiting the risk insurers face in concussion cases. But concussion management laws in every state also define the duty of care leagues and schools owe to student-athletes.
In the Washington state case, for example, the court ruled the law created an implied cause of action against the coach, and that his alleged conduct potentially removed the immunity shield.
But the broader question that bedevils sports leagues and insurers alike is identifying the specific—or collective—head traumas that allegedly caused an athlete’s later-life brain disease.
“This is about as hard of a problem for the insurance companies to deal with that you could have,” Haagen said.
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