Instead, the renegotiated contract contains a clause acknowledging that the Broncos have purchased insurance to protect them against a serious injury to Manning. The contract must mention the insurance in order to position the Broncos for a cap credit, if they ultimately collect on the policy.
Per a source with knowledge of the situation, the Broncos will get $10 million if Manning suffers an injury (other than to his neck) in 2013 that prevents him from playing in 2014. If it’s an injury to the neck, Manning’s $20 million guarantee in 2014 evaporates, making the insurance unnecessary.
Basically, then, Manning will get the full $20 million for any non-neck injury in 2013 that prevents him from playing in 2014. The Broncos, in turn, will get half of it back via insurance.
The only potential donut hole in this equation comes from the possibility that Manning will suffer a neck injury in 2013 that is separate from his 2011 ailment (which would allow him to get the $20 million) but that does not escape the neck exclusion in the insurance policy (which would prevent the Broncos from recovering $10 million).
In that case, the Broncos could end up out $20 million — and without the $10 million in insurance proceeds.