NIL Rules Increase Malpractice Risk for Sports Doctors

The introduction of Name, Image, and Likeness (NIL) rules has revolutionized college sports, turning student-athletes into marketable brands capable of earning millions of dollars. While this has created unprecedented opportunities for athletes, it has also introduced heightened risks for the healthcare providers who care for them. As malpractice claims grow in complexity and potential financial impact, especially when tied to lost NIL earnings, physicians working with college athletes need to revisit their malpractice insurance policies to ensure adequate coverage.

A Lucrative but Risky Arena for Medical Professionals

Working with college and professional athletes has always been a coveted and financially rewarding niche for medical professionals. Partnerships with university athletic departments or professional teams not only bolster a provider’s reputation but also create a steady revenue stream. However, treating athletes, particularly high-performing ones, brings unique challenges and risks.

For instance, the stakes are much higher when a physician’s decision directly impacts an athlete’s career trajectory and earning potential. The case of former NFL player Chris Maragos highlights this risk. Maragos won a $45 million malpractice judgment against an orthopedic surgeon and his practice, alleging he was pushed into rehabilitation prematurely following surgery, effectively ending his football career and costing him millions in future earnings.

This isn’t an isolated example. NFL quarterback Tyrod Taylor’s $5 million malpractice claim against the Los Angeles Chargers’ team doctor and lawsuits from college athletes like those at Southern Methodist University and Penn State underscore the increasing prevalence of high-stakes malpractice cases in sports medicine.

The NIL Era: A Game-Changer for Malpractice Claims

Historically, malpractice suits involving college athletes were limited in scope. Since student-athletes were unpaid, their damages were often capped at medical expenses and potential future earnings from professional sports—a speculative calculation at best.

NIL rules, introduced by the NCAA in 2021, have completely transformed this landscape. Student-athletes can now earn income through endorsements, sponsorships, appearances, and other avenues, with top athletes securing six- or seven-figure deals. In this environment, a malpractice claim may include damages for lost NIL income, exponentially increasing the financial risk for healthcare providers.

The NIL Ecosystem

NIL compensation comes primarily from “collectives,” entities often funded by alumni, local businesses, and college boosters. These collectives have become a critical financial engine for college sports, with the Power 5 conferences alone projected to generate $677 million in NIL deals by the end of 2024.

The financial stakes in college athletics have never been higher, and this has far-reaching implications for medical malpractice. A student-athlete sidelined by malpractice might claim not just future professional earnings but also millions in lost NIL opportunities.

New Risks for Healthcare Providers

The evolving NIL landscape and increased athlete compensation have introduced unique liability challenges for healthcare providers.

Expanded Damages in Lawsuits

The inclusion of NIL earnings in malpractice claims adds a new dimension of risk. Beyond covering medical expenses, damages may now include lost endorsement income, social media revenue, and even revenue-sharing payments starting in 2025, as universities prepare to pay athletes directly.

Increased Scrutiny on Medical Decisions

In this high-stakes environment, healthcare providers face greater pressure to balance the needs of the athlete, the team, and their professional judgment. Decisions that prioritize a quick return to play over long-term health can lead to significant liability, as seen in several high-profile cases.

Complex Insurance Coverage Needs

Traditional malpractice policies may no longer be sufficient. Insurers are responding by carefully managing limits and exclusions, particularly for healthcare providers working with athletes.

Strategies to Mitigate Risk

Healthcare providers and their insurance agents must adapt to the changing dynamics of college athletics to protect themselves against these heightened risks.

1. Implement Robust Risk Management Protocols
   • Concussion Management: Strict adherence to protocols can reduce liability, as mishandling such injuries often leads to claims.
   • Diverse Medical Opinions: Encourage athletes to seek second or third opinions, particularly for high-risk procedures.
   • Consent Processes: Use specialized legal oversight to ensure that consent forms and treatment agreements are comprehensive and defensible.
2. Align with University Policies
   • Any divergence from university policies can shift liability to the healthcare provider. Providers must ensure their care aligns with athletic department protocols and collective bargaining agreements.
3. Document Everything
   • Maintain detailed records of all treatment recommendations, communications, and decisions to protect against claims that could arise from miscommunication or misunderstandings.
4. Prioritize Athlete Well-Being
   • While teams often push for quick recoveries, healthcare providers should focus on long-term health outcomes to minimize future liability.
5. Review and Update Malpractice Coverage
   • Given the new risks introduced by NIL, it’s critical to evaluate whether current policies adequately cover potential damages tied to lost NIL earnings.

Opportunities for Insurance Agents

For retail insurance agents, the NIL era presents an opportunity to provide value to healthcare clients by guiding them through these complexities. Agents who stay informed about changes in college sports can help clients secure the right coverage and mitigate potential liabilities.

The Role of Wholesale Brokers

An experienced wholesale broker like DOXA can help retail agents navigate this challenging market. By partnering with carriers experienced in the sports medicine sector, brokers can ensure healthcare providers have the protection they need.

Bottom Line

The NIL revolution has brought exciting opportunities for college athletes and substantial risks for their healthcare providers. As malpractice claims become more complex and financially significant, physicians, orthopedists, and other sports medicine professionals must proactively address their liability exposure.

Retail insurance agents and their clients should collaborate with trusted brokers to secure comprehensive coverage that reflects the evolving risks of this high-stakes arena. By doing so, they can ensure that both athletes and healthcare providers are protected in this rapidly changing landscape.

Contact DOXA Today

Looking for malpractice coverage that meets the unique challenges of the NIL era? DOXA specializes in helping healthcare providers navigate complex insurance needs. Let us help you secure peace of mind.