Football clubs buy large amounts of insurance – to cover their stadium, spectators and players. Underwriters insure more than £1bn of football related risk in the UK, with many of the 3,000 professional players buying insurance. The majority of the 500 players in the Premier League are insured for between £5-£25million – even the ones that play like lame donkeys.
Clubs can insure against the loss of multi-million pound transfer fees if a player is unable to play because of a career ending injury or illness. They can also buy insurance to pay salaries should a player suffer a temporary injury or illness.
Clubs in the top divisions typically buy insurance to protect their investment in their players. Roland Fox at MAP Underwriting says, "If a club has spent millions in the transfer market buying a player, they will want to protect their balance sheet. Premiership clubs buy personal accident insurance for a career ending injury, and some also buy insurance for temporary disablement.”
As transfer fees and players’ wages have rocketed over the years, so have exposures. The gap between premiums and liability has been widening. Medical advancements mean that claims are now less likely, but a large loss is possible. Career ending injuries are rare, although a player’s future in football can be cut short due to sickness or an accident off the pitch. Underwriters provide cover for players both on and off the pitch, and although policies typically exclude activities like extreme sports and piloting helicopters, these can also be insured at Lloyd’s.
Players also may purchase their own insurance to cover lost income as a result of an accident, illness or injury. Typically, a top player will buy up to five times their earnings.
The Lloyd’s market pioneered personal accident insurance for professional players over two decades ago and remains a leading market for covering sports such as football, rugby, basketball, baseball and American football. Lloyd’s is particularly strong at insuring sports that involve high values or high risk, because of the need for underwriting expertise and the syndication of risk.
Insurance is not just for the big name clubs and professional players. Semi-professional and amateur clubs buy a range of coverage to protect players. Many clubs in local leagues buy insurance to cover medical costs and treatments should a player be injured whilst playing for the team.
Amateur and semi professional players suffer the same injuries as professional players, but the risks are probably even greater. Grounds in the lower leagues are not as well kept and players do not have the same training and medical support.
Murray Anderson at Sportscover syndicate 3334 says, “The start of the football season is a particularly risky time, and typically leads to rise in the number of accidents. Players in local leagues do not have the same fitness levels as Wayne Rooney, but they go out at the start of the season thinking they do and then snap their Achilles or pull a hamstring.”