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NFL’s Insurer Balks at Concussion Defense

2012 August 13

Updated 9-16-2012:

As first reported by, the NFL was sued by Alterra American Insurance on Monday seeking a declaration that it does not have a duty to defend or indemnify the NFL in the ongoing concussion lawsuits. Now the plot has thickened.

The NFL has sued 32 — it is mere happenstance that the number of defendant-insurers coincides with the number of NFL teams — of its former insurers for allegedly breaching their duty to defend against the concussion lawsuits.

The NFL says it has paid “millions of dollars in premiums” and now the insurers are saying no dice.

According to the NFL, “the insurers issuing such policies have failed and refused to discharge their obligations to defend the NFL and NFL Properties in the injury lawsuits…and breached their duty to defend.”

The various comprehensive general liability insurance policies were in effect from March 4, 1968 through August 1, 2012, all of which were in effect at different times. (For example, Fireman’s Fund was in effect from September 20, 1976 to October 20, 1977, Century Indemnity was in effect from March 4, 1968 to December 18, 1968, Illinois Union Insurance Co. was in effect from November 20, 2002 to August 1, 2006, etc.)

The dispute centers on when the duty to defend was triggered. The policies are so-called “occurrence policies” and the duty to defend is triggered, according to the NFL, when “the occurrence leading to the liability resulted in injury during the Policy’s policy period.”

In other words, the NFL is arguing the alleged injuries suffered by the 3,000+ former player-plaintiffs occurred when the various policies were in place. The insurerers, on the other hand, will likely argue that the duty to defend was not triggered until well after the policies were no longer in effect, presumably when the NFL’s alleged wrongful conduct occurred or when the first concussion lawsuit was filed in July 2011.

The case is National Football League and NFL Properties v. Fireman’s Fund Insurance Co. et al, filed in Superior Court of California – LA. (Sorry for the short analysis, I’m on vacation!)

The NFL will have to endure yet another legal battle. This time, though, the lawsuit was filed by the NFL’s own insurer, Alterra American Insurance Company.

On Monday, Alterra American Insurance Company filed a declaratory action against the NFL claiming (1) that it does not have a duty to defend the NFL in the concussion lawsuits and (2) that it does not have a duty to indemnify if a judgment is rendered against the NFL.

A declaratory action seeks a determination by the court regarding the respective rights and duties of the parties. In essence, the court will be required to interpret the insurance policy that was issued by Alterra.

According to Alterra, it issued an “excess casualty” policy to the NFL, which was effective from August 1, 2011 to August 1, 2012. The NFL tendered nearly all the pending concussion lawsuits to Alterra requesting that it defend and indemnify. According to the complaint, Alterra declined coverage to the NFL.

Alterra claims that it neither has a duty to defend nor to indemnify.

This is not the first insurance dispute. In May, Riddell Helmets filed a lawsuit against several of its insurers because the insurers also claimed they did not have a duty to defend or indemnify against the concussion lawsuits.

This could signal that Alterra sees the concussion litigation as being a major expense to defend, with an additional threat that it will be required to fork out millions, or perhaps billions, if a judgment is rendered in the former players’ favor. On the other hand, this is also what insurance companies do best: avoid and/or deny payments.

In either event, it is now up to the court to decide whether Alterra will be required to defend the NFL in the concussion lawsuits.

The case is Alterra American Insurance Company v. National Football League, filed in the Supreme Court of New York, New York County. The complaint can be accessed here: Alterra v. NFL.


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