It took one punch to alter sports insurance forever. That punch came from Los Angeles Lakers player Kermit Washington, who, during a 1977 game, struck Houston Rockets player Rudy Tomjanovich, shattering his face and causing severe head and spinal injuries. Tomjanovich missed five months, and the incident cost the Lakers $2.3 million. It also triggered the creation of the first player‑versus‑player liability coverage — a turning point that reshaped how teams protect themselves through insurance policies specifically designed for sports.
The Early Days of Sports Insurance
As professional sports grew, so did the need to insure athletes, venues, and league operations. Early specialty programs emerged in the 1960s and 1970s, but coverage was limited. By the 1980s, rising player salaries, increased litigation, and a nationwide liability crisis pushed premiums higher and reduced available limits. Teams suddenly faced shrinking insurance options at the exact moment their exposures were expanding.
Amid this turbulence, NFP (then BWD) proposed a groundbreaking solution: league‑wide insurance programs. By pooling risk across entire leagues, teams gained access to broader, more stable coverage. This model became the foundation for modern sports insurance.
More Growth, Bigger Need
NFP’s involvement began in 1964, when league offices needed workers’ compensation coverage for referees. By the 1980s, NFP was building comprehensive programs for:
- General liability
- Workers’ compensation
- Player contract insurance
Player salaries were rising sharply, and so were injury risks. Permanent total disability (PTD) insurance protected teams from career‑ending injuries — until Bernard King changed the game.
In 1985, King suffered a devastating knee injury that would have ended most careers. Instead, he returned the next season and played several more years. His comeback highlighted a gap: not all severe injuries are permanent.
NFP responded by creating the first temporary total disability (TTD) policy, which protects teams when a player is sidelined but expected to return. This innovation became a cornerstone of modern contract‑protection insurance.
Today’s Sports Insurance Landscape
The sports industry has become faster, more global, and more complex — and insurance has evolved with it. Today’s sports organizations face risks that go far beyond physical injury:
Event Cancellation & Revenue Protection
Event cancellations can devastate annual revenue. Modern policies address:
- Weather‑related cancellations
- Pandemics and communicable disease exclusions
- Venue shutdowns
- Sponsor or broadcast disruptions
Reputational & Media‑Related Risks
With social media and 24/7 coverage, reputational harm can spread instantly. The demand continues to grow for:
- Media liability
- Defamation and slander coverage
- Copyright and advertising‑related protection
Cybersecurity
Sports organizations now operate like major corporations. Cyber exposures include:
- Ticketing‑system breaches
- Athlete data theft
- Ransomware attacks
- Live‑event broadcast disruption
- Cyber coverage has become a core component of sports risk management.
Talent Protection & Contractual Risk
Losing talent — whether to injury, illness, or poaching — can have long‑term financial consequences. Modern solutions include:
- Temporary total disability and permanent total disability
- Contract‑value insurance
- Key‑person coverage for executives and coaches
- Transfer‑value protection (in global sports markets)
Youth, Amateur & Olympic Coverage
Insurance now extends far beyond professional leagues:
- Youth sports organizations
- Amateur tournaments
- Olympic athletes and governing bodies
- Camps, clinics, and training facilities
Learn more about NFP's Sports Tuition Expense Protection offering.
5 Trends Shaping Sports Insurance
Recent market research shows the sports insurance sector is expanding rapidly, driven by increased participation, higher athlete salaries, and more complex risks. Key trends include:
1. Rapid Market Growth
The global sports insurance market is projected to grow significantly through 2033, driven by rising participation and increased risk awareness.
2. Expansion of Extreme & Adventure Sports
Coverage demand is rising for:
- Action sports
- Endurance events
- Adventure tourism
These activities carry higher injury severity and require specialized underwriting.
3. Increased Focus on Mental Health
Teams are beginning to explore coverage related to:
- Mental‑health‑related leave
- Psychological support services
- Performance‑related stress claims
4. Technology‑Driven Risk Management
Wearables, biometrics, and AI‑based injury‑prediction tools are influencing:
- Underwriting
- Player‑health monitoring
- Contract‑value assessments
5. NIL (Name, Image & Likeness) Exposures
College athletes monetizing their brands face new risks:
- Contract disputes
- Endorsement liability
- Personal‑brand protection
Insurers are developing products specifically for NIL participants.
Sports Insurance for the Future
Sports will continue to evolve — and so will the risks. Player contracts will grow in value. Injuries will become more expensive. Digital and reputational exposures will expand. And, as leagues innovate, new vulnerabilities will emerge.
NFP’s sports practice emphasizes that specialized expertise — not generalist brokerage — is essential in this environment. With deep experience across leagues, athletes, and executives, our specialists continue to design customized programs that address the unique challenges of modern sports.
From cyber threats to contract protection, from youth sports to global competitions, sports insurance will remain a critical tool for keeping athletes safe, protecting organizational revenue, and ensuring teams can keep playing on.
