An Advisors' Guide to Excess & Surplus Disability Insurance

Endorsement Deals Die When Athletes are Disabled

Posted Tue, Feb, 11th, 2020
By Exceptional Risk Advisors

For professional athletes, their ability to play is their greatest asset.  It is their ticket to potential future income - on the court/rink/field/course and off.  According to Business Insider in 2019, Tiger Woods, Roger Federer, and LeBron James  earned more than 50% of their income from endorsement deals with Woods earning 97% of his income from endorsements. 

What is generally unknown by the public and perhaps the players' agents, that almost all endorsement contracts have standard built in language stipulating that the player needs to appear in a minimum amount of games/matches/tournaments per season.  If the player is injured or sick, then that player is going to lose a significant chunk of endorsement money.  To help illustrate, LeBron James earned $52 million in endorsements, but only played 55 games out of the 82 in the 2018-2019 season.  If LeBron James endorsement contract included the standard language, by missing 27 games he would lose out on over $17 million in endorsement monies.

Fortunately, there are a number of insurance products in play that can supplement a player in the event they are physically unable to fully honor their endorsement contract.  These plans call for a competitive premium of the total amount insured and will reimburse a player up to 60% of the contract deal.  The rates are based on age, injury history, past performance, deductible, etc...

As an insurance advisor, you know it takes more than just gear to fully protect your professional athlete clients.

For a comprehensive overview of insurance for professional athletes, download this 8-page brochure