The recent expanse of litigation against the National Football League for concussions and other brain injury related claims contains hall of fame names and headline worthy accusations of failed safety measures. The bigger fight, however, may be between the NFL and its liability insurers to determine what, if any, coverage and indemnity will be provided to the NFL.   

In fact, several coverage cases have already begun. Helmet manufacturer Riddell filed the first suit seeking declaratory relief against 13 insurers on April 12, 2012, in California Superior Court, Riddell v. Ace American Ins. Co.. On August 13, 2012, Alterra America Insurance Company filed suit against the NFL in New York Supreme Court seeking a declaration of its duty to defend the NFL in approximately 93 underlying concussion related claims, Alterra America Ins. Co. v. NFL

The NFL responded two days later with its own complaint in the California Superior Court against 32 insurers (dating back to the 1960s) seeking a declaration of the insurers’ duty to defend the NFL and indemnify it for damages in at least 143 concussion related suits, NFL v. Fireman’s Fund Ins. Co., Case No. BC490342. And finally, on August 22, 2012, subsidiaries of Travelers Companies Inc. filed an insurer-commenced declaratory judgment action against the NFL in New York Supreme Court, Discovery Prop. & Cas. Co. v. NFL, Case No. 652933/2013.      

Due to procedural motions, these cases are progressing slower than an NFL replay.

The Riddell and NFL cases filed in California were deemed related and stayed on forum non conveniens grounds after the insurers argued that New York was a more appropriate forum. 

The NFL has appealed that ruling and the insurers’ briefs were just filed March 6, 2013. Ironically, the Alterra action was stayed based on a motion brought by the NFL that argued the California action was more comprehensive, and hence, a better forum. That motion was heard on March 15, 2013, but no ruling has been issued yet. Meanwhile, a separate motion to dismiss in the Travelers case has been briefed and is awaiting decision. 

Once the procedural aspects of these cases are ironed out, the courts and the parties will face complex coverage issues due to the number of insurers potentially on the risk and the nature of the alleged brain injury related claims.

Indeed, one of the main issues is likely to be the fact that the alleged injuries took years to develop and manifest. In this regard, the concussion litigation may be similar to tobacco or asbestos litigation. 

For example, football players voluntarily chose to play a violent sport and put themselves in danger of physical harm, though adverse health effects may only manifest themselves several years after the player retires and which now are claimed to be traceable to football injuries based on advancements in modern medicine. 

Thus, the age old question of how to define an occurrence will be especially difficult in this situation and will be a vital component to this litigation. For example, should each game in which the player participated be an occurrence? Perhaps each season? If so, policy limits on several policies could be triggered and complex allocation issues lay ahead.

While we wait for the coverage decisions in these cases, other entities that operate sports leagues and their insurers should do their due diligence. 

With annual revenues of about $9 billion, the NFL is uniquely positioned to defend itself in the concussion litigation regardless of the outcome of the coverage cases. However, the impact of the coverage decisions will be far reaching. Lawsuits against other professional leagues, colleges, high schools and even pee-wee leagues are not far off. 

These institutions/leagues and their insurers would be well advised to revisit their liability policies and consider possible exposure not just for liability but also the costs associated with defending these claims.