An insurance pool is the answer to the NRL’s insurance woes, according to a sports insurance specialist.
Last week, star West Tigers hooker Robbie Farah claimed the NRL has failed to deliver on their promise to provide players with a blanket insurance scheme to cover them for career-ending injuries.
This comes after the tragic incident earlier this year that has left inspirational Newcastle forward Alex McKinnon fighting to walk again. Earlier this year the NRL offered McKinnon a ‘job for life’ with financial and career assistance over the long term.
The incident has sparked the players of league into action, calling for the NRL to provide insurance.
Farah claims the NRL promised players cover, but nothing has eventuated and he was quoted in the Daily Telegraph slamming the NRL, saying the situation is a “disgrace” and that the “players are the product and we’re not being protected”.
CEO of Sportscover David Lamb, a sports insurance specialist agency in Australia and internationally for over 27 years, says insurance comes down to prioritisation.
He says clubs cherry-picking players for insurance cover does not allow younger and financially naive athletes a fair go.
“It is particularly expensive to purchase cover for a high impact sport and there are no higher impact sports than rugby league, union and AFL.
“There should not be a misconception that cover is not available. Cover is available and Sportscover would write it tomorrow, the issue is affordability.”
Whilst the superstars of the NRL who gain lucrative deals might be able to afford to cover themselves outside a club, this misses the point and again disadvantages the financially naive or less valuable players, according to Lamb.
However, an insurance pool that works in a similar way as superannuation would go a long way in settling the NRL’s problems.
“Think of someone who has dedicated themselves to sport all their life and don’t have a formal education to fall back on, and if they get injured and can no longer fall back on their career–they need to be adequately compensated,” Lamb says.
“They don’t necessarily need a million dollars a year but they do need funds to not end up in dire circumstances. It comes down to risk prioritisation and making sure you spread that risk across the entire roster.
“It has to be run like superannuation or healthcare i.e. made compulsory across the board to protect all players. We all have workers compensation of sorts and that type of thing needs to be mandatory for professional sports”
“An insurance solution is certainly available. For example, you could allocate a certain level of player payments into a pool. Each sporting code has a salary cap; if they channelled or paid a levy of this into a compulsory injury insurance fund, this could work.
“I advise against going down the discretionary trusts or mutuals path. They’re self-regulated discretionary choices and then heaven forbid we have disputes amongst trustees in a code who decide or don’t decide to make such a payment.
“The professional sports insurance market is a far better option with the protection of the Insurance Contracts Act meaning players claims will be decided on their merits not on who they are or who controls the discretionary fund. Our elite sports people deserve better.”
For more about insuring sports clubs and events, pick up a copy of the August/September edition of Insurance and Risk Professional magazine.