Sep 235 min read

Talking Tua: How Tagovailoa’s Concussion Once Again Spotlights Insurance Policies in NFL Contracts

Last week, Miami Dolphins quarterback Tua Tagovailoa suffered another serious concussion, leading fans to speculate about whether the Dolphins star would ever return to the field. Tagovailoa’s injury also led many media outlets to report that the Dolphins may be able to recover a portion of Tagovailoa’s salary via an insurance policy if he is not medically cleared. To understand why this insurance policy has the potential to make or break the Dolphins future, one only needs to turn the clock back to last year, when 40-year-old Aaron Rodgers was carted off the field just moments into his Jets debut. The newly acquired star quarterback would not return to the field in 2023-24, but the cost to the Jets was deeper than that: Rodgers’ contract was uninsured.

After acquiring Rodgers during the offseason, the Jets restructured his contract. Like Rodgers’ former team, the Green Bay Packers, the Jets wanted to ensure that their franchise centerpiece was satisfied financially, paying him $37M in guaranteed money for the 2023 season. However, unlike the Packers, the Jets did not purchase an insurance policy for the QB, with Sportico reporting that the team missed out on up to $22M by not purchasing one of several policy options. More importantly, the Jets missed out on serious salary cap relief. The NFL Collective Bargaining Agreement ("CBA") defines insurance proceeds as a “refund from the player” and labels them as a cap credit for the ensuing season, so long as they are written into the contract at the time it is signed—insurance purchased outside of the contract does not count towards cap relief. This CBA provision encourages teams to insure themselves against the loss of their most expensive players for a season or longer by allowing them to obtain additional cap space for the year after the injury. Further incentivizing teams is the fact that payments for insurance policy premiums are not counted against a team’s salary cap. It should also be noted that teams can add this insurance provision to a player contract and not obtain a policy or stop paying an existing policy, which would leave them without recourse in instances like Rodgers’ injury.

Given these advantages, why don’t all teams insure their most expensive players? For many across the league, the CBA’s treatment of insurance policies (which has remained unchanged since 2006) is viewed as a loophole and a competitive advantage that organizations don’t want to broadcast. Though Rodgers' injury placed insurance into the spotlight, insurance policies in NFL player contracts have been a growing trend for years, with estimations that these policies have doubled in prevalence across the league over the last 5 years. While this popularity is a good thing for organizations marred by injury, it has come at a cost—premium prices for these policies have skyrocketed 30-40% in the last 5 years, leaving many teams and owners feeling like it may be too expensive to insure more than one player on their roster. These perspectives are underscored by an ESPN report of sources claiming that the NFL Management Council has discussed eliminating the cap relief benefit entirely.

Despite rising costs and potential rule changes, at least half of the teams in the NFL have at least one insured contract on their roster. The most popular position with insurance is quarterback, and 13 of the 14 most expensive QB contracts are insured, including names like Joe Burrow, Dak Prescott, and Jordan Love (who has already been placed on the IR this season). In contrast, rookie QBs, bridge quarterbacks, and middle-of-the-market signal-callers typically go uninsured.

A team’s stance on insurance policies largely depends on its salary cap situation and the owner’s willingness to spend. Other teams have fewer concerns, like the Philadelphia Eagles (at least 16 players insured this season) and the San Francisco 49ers (who have successfully made claims on insurance policies for Jimmy Garoppolo, Dee Ford, and George Kittle, and will likely make another claim on Christian McCaffrey). It seems that these teams have the philosophy of spreading their risk by insuring a wide variety of players and positions for different amounts. The difficulties these teams may face in offsetting the cost of insuring multiple players across a roster may not be as high as insurance-averse owners claim, either. NFL contract insurance policies typically vary based on a player’s position, medical history, and age, so some players and personnel groups may be easier for teams to insure than others. There is also flexibility in the policy’s deductibles and the number of games a player can miss before the policy kicks in, allowing teams to further tailor these policies to their respective needs. Finally, teams can also save money by bundling multiple policies, as the New York Giants did in signing Dexter Lawrence II, Brian Burns, and Andrew Thomas this offseason.

This brings us to Tagovailoa, whose tragic concussion highlights that insurance policies are not always the safety net that they appear to be. Tagovailoa’s 2024 contract extension provides for $167M in injury guarantees (with no waivers or exclusions for concussions) and involves an insurance policy for up to $49.3M of the contract, much like that of other expensive signal-callers across the NFL. However, as mentioned above, insurance brokers still have the discretion to vary their policies based on a player’s injury history. An ESPN article published earlier this week included sources who believe that concussions would be excluded under Tagovailoa’s insurance policy due to the high level of pre-existing risk involved. The Dolphins QB suffered at least two high-profile concussions in 2022 (including a “fencing response” against the Cincinnati Bengals, which indicates an impact on the brain that is strong enough to cause a traumatic brain injury) and publicly stated that he had considered retirement at the time. If Tagovailoa is found to be medically ineligible to play football and concussions are exempt from his contract’s insurance policy, Miami will not be able to file a claim under the policy or receive salary cap relief, a massive blow to the Dolphins’ 2025 season on top of losing their franchise cornerstone. By contrast, these ESPN sources believe that a Rodgers insurance policy in 2023 likely would not have included exclusions for an Achilles injury, as the Jets QB had never suffered that kind of injury, though it seems unlikely that the Jets would be able to obtain that same policy now that the quarterback has indeed ruptured his Achilles.

While Tagovailoa’s health should rightfully be the main concern, how the Dolphins’ insurance policy will be handled remains an important issue to monitor. Are concussions truly exempt under his contract’s insurance policy, capsizing the Dolphins 2025 salary cap space even if their QB never plays another down of football? Will other NFL teams view the Rodgers and Tagovailoa injuries as an impetus to include more team-friendly insurance policies with their player contracts? How does a team insure an injury-prone player, or one who just suffered a serious injury? Will the NFL Management Council do away with all of these questions by eliminating the cap relief benefit? As the situation unfolds, all eyes will be on the response of the Dolphins and the NFL.

Oliver Canning is a 2L at the University of Miami School of Law. He can be followed on Twitter (X) @OCanning.

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Nov 11

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