Under insurance policy, Broncos get $10 million if Peyton can’t play in 2014

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As explained earlier today, Broncos quarterback Peyton Manning’s new contract doesn’t change the money or the cap number, in any way.

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.

14 responses to “Under insurance policy, Broncos get $10 million if Peyton can’t play in 2014

  1. Well it’s not a perfectly desirably policy that you would normally want to buy, but in this situation where cap dollars are at a premium and owners are often willing to overinvest beyond what they would do in a typical business situation, then it’s a small consequence to buy something that has some chance at creating newfound cap dollars. It’s tempting to throw away a lot of money even if it’s not close to a 1 for 1 value exchange.

    That’s the premium a competitive owner will sacrifice to try and gain some small edge. Those insurance premium dollars are simply extra consideration given up that doesn’t have to conform to the cap rules. Good for the Broncos’ fans that they are willing to splurge for that advantage pickup in a qualified worst case scenario.

  2. When are they taking out a policy to protect against a secondary collapse in the divisional round?

  3. If the Broncos would get a cap credit with a payout of the insurance, they should be taking a cap hit for purchasing the insurance.

  4. nes296:

    Good point, in my post I’m just guessing the premium dollars don’t count against the cap, but they were well could and should. There might have also been changes to this recently so I have no idea what the rules are on that. You would think they would have a provision for that detailed in some way. Otherwise it’s just a loophole to spend more than your cap investment.

  5. How in the world do you find an estimate and insurance premium for that type of thing??? How does an insurance company estimate risk?

    Amazing to think about.

  6. Knowing insurance companies….this only covers
    games played on Saturdays and if a boulder hits him
    on the head and it comes with a 5,000,000.00 deductible.

  7. thats ok, bronco’s have a 10 million dollar policy, and Manning personally took out a 40 million dollar lloyds of london policy.

    Either way he is getting paid big bucks.

  8. Hopefully it doesn’t come to these scenarios playing out. Peyton’s way too smart to take any unnecessary damage to his body and knows how to take care of himself. I don’t see him getting hurt again throughout the rest of his career, but that’s just me.

  9. Payton, Love the courage but sometimes there is a fine line between courage and stupidity. I would hope by now that you have enough money to ride of into the sunset with the health that you have. You made a full recovery, don’t press your luck. That is a whole lot more than most people that have neck surgery can claim. It doesn’t take much to loose the ability to control your arms. Been there done that just a piece of friendly advice.

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