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Marqise Lee is suing Lloyd's of London, alleging the insurance marketplace failed to pay on a disability injury policy regarding the 2014 NFL draft.
The Jacksonville Jaguars wide receiver was injured during his junior season at USC and was drafted later than expected.
College Athletes and Injury Policies
As you may know, disability insurance policies are fairly common for college football players, especially those who expect to go early in the NFL draft. In some cases, schools are assisting players to pay for insurance.
These policies can come in multiple forms. Some protect against "total permanent disability" and would pay an athlete in the case of a catastrophic injury. Other policies protect "loss of value" tied to the player's projected draft stock: If a player drops in the draft because of injury, the policy would make up the difference in bonus money and salary.
Lee's Policy at Lloyd's
Loss-of-value policies are generally only available to elite players, and Lee was one. Before the 2013 season, he was projected to be a Top 5 pick in the 2014 draft. Like USC stars Carson Palmer and Matt Leinart before him, Lee purchased a loss-of-value policy, paying Lloyd's a $94,600 premium for $9.6 million in coverage. If he fell in the draft and signed a rookie contract worth less than that amount, the insurance would pay the difference.
And when Lee injured his left knee just two games into the season, it looked like a wise decision. Lee was never the same that year, dropped to the 39th pick in the draft, and signed with the Jaguars for $5.17 million. Lee filed an insurance claim for the difference, and has now filed a lawsuit in response to Lloyd's failure to pay.
If Lee is going to be the first player to collect on loss-of-value benefits, it looks like he'll have to do it through legal action. Lee filed his lawsuit in California district court the same day Lloyd's denied his benefits claim.