Fox's Ken Rosenthal reported this morning that the Yankees might be hoping that they can get out from under Alex Rodriguez' contract with an insurance payout. On its face, it's a fair point; they took out a sizeable insurance policy on the contract in case A-Rod suffered a career-ending injury. The plan, as Rosenthal explains, would be to find a doctor willing to call Rodriguez' hip injury "career-ending", file some paperwork, and presto, insurance payout covers 85 percent of the $114 million remaining on the deal.
Simple? Not so much. Ken probably wouldn't be surprised to hear that insurance companies are reluctant to pay out claims if they can avoid it. In particular, they (rightly) are especially reluctant to pay out where there's a whiff of fraud. You may have also heard that Alex Rodriguez doesn't have the best reputation as a truth-teller.
Furthermore, the fact that this strategy is being publicly discussed (Rosenthal reports that a 'high-ranking executive explained the same plan to him) will raise the insurer's suspicions even more. You can bet that they wouldn't simply take the opinion of a single doctor cherry-picked by Rodriguez and the Yankees.
Here's what would actually happen: the claim would get denied, and the Yankees and the insurer would end up in court. The insurer would insist on a second opinion, and demand the reports of every other doctor that checked on Rodriguez. If A-Rod had 'shopped around' until he got a favourable opinion, it's game over. The insurer could point to the conflicting opinions and show that Rodriguez can play. If that fails, they might still be able to insist that 'their' doctor examine hime, or they could send up a slew of expert witnesses to say he should be playing, or that the Yankees failed to mitigate his injuries, or that they allowed him to use PEDs, perhaps voiding the policy because of increased injury risks and so on...
You get the picture. You can't just fill out a form and magically get an insurance payout. Any insurance claim that approaches $100m - whether it's for a baseball contract or a construction project - will not be handled the same way as a car insurance claim for a fender-bender. There's too much money at stake, and any insurance company will fight tooth and nail to avoid paying out illegitimate claims. Unless his injury is worse than reported, you can bet on A-Rod being on the field in 2014.
Follow sports law and business nerd Rory Johnston (@rnfjohnston) on twitter: twitter.com/rnfjohnston
Simple? Not so much. Ken probably wouldn't be surprised to hear that insurance companies are reluctant to pay out claims if they can avoid it. In particular, they (rightly) are especially reluctant to pay out where there's a whiff of fraud. You may have also heard that Alex Rodriguez doesn't have the best reputation as a truth-teller.
Furthermore, the fact that this strategy is being publicly discussed (Rosenthal reports that a 'high-ranking executive explained the same plan to him) will raise the insurer's suspicions even more. You can bet that they wouldn't simply take the opinion of a single doctor cherry-picked by Rodriguez and the Yankees.
Here's what would actually happen: the claim would get denied, and the Yankees and the insurer would end up in court. The insurer would insist on a second opinion, and demand the reports of every other doctor that checked on Rodriguez. If A-Rod had 'shopped around' until he got a favourable opinion, it's game over. The insurer could point to the conflicting opinions and show that Rodriguez can play. If that fails, they might still be able to insist that 'their' doctor examine hime, or they could send up a slew of expert witnesses to say he should be playing, or that the Yankees failed to mitigate his injuries, or that they allowed him to use PEDs, perhaps voiding the policy because of increased injury risks and so on...
You get the picture. You can't just fill out a form and magically get an insurance payout. Any insurance claim that approaches $100m - whether it's for a baseball contract or a construction project - will not be handled the same way as a car insurance claim for a fender-bender. There's too much money at stake, and any insurance company will fight tooth and nail to avoid paying out illegitimate claims. Unless his injury is worse than reported, you can bet on A-Rod being on the field in 2014.
Follow sports law and business nerd Rory Johnston (@rnfjohnston) on twitter: twitter.com/rnfjohnston
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