Tokio Marine & Nichido Fire Insurance Co. has introduced a new policy for professional sports teams that will cover the salaries of players who cannot compete due to injuries and other reasons.
While common in other markets such as the UK and the US, this policy is the first of its kind in Japan.
Professional teams in baseball, football, basketball, and many other sports pay their players high salaries, even when the athlete cannot play due to injury or other reasons. Also, in the case of long-term player injuries, a replacement athlete will usually be needed to fill the vacated roster spot, increasing the financial burden on the team. While the biggest teams can afford these costs, many smaller and financially struggling teams may not.
With the new insurance policy, Tokio Marine & Nichido will pay out benefits equivalent to the per diem salary of an injured or ill for the remaining contract period. In cases where the player will be out for over six months, the insurer will also cover the salary of the replacement player, as well as other costs. Premiums will be dependent on the target player’s age, injury history, and other factors.
In 2015, Tokio Marine & Nichido’s parent company acquired US-based sports insurer HCC Insurance Holdings Inc, which caters to Major League Baseball teams, among others. Tokio Marine & Nichido aims to harness HCC’s expertise in the field to bring the product to the Japanese market.
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