Fantasy football is now a $3.6 billion industry in the United States. With 33 million people participating in fantasy teams, it’s not an activity reserved for die-hard football fans anymore. From personal leagues with friends or co-workers, to season-long leagues offered by CBS, Yahoo!, ESPN and others, to daily play tournaments with FanDuel and DraftKings, there are plenty of options for fans who want to have a little fun and fans who want to go all in.
According to a 2014 Forbes article, the average Fantasy Football player spends $110 a year. For super-players on platforms like DraftKings and FanDuel, the buy-in can get much larger. Risk&Insurance reports that buy-ins can reach upwards of $10,000. While average leagues typically have reasonable payouts of a few hundred dollars for the top three winners, the pots offered by fantasy-focused companies are reaching astronomical levels. For the 2015 season, DraftKings is offering a potential payout of $15 million with a guarantee of $5 million.
Like real teams, fantasy teams live and die by injuries. One bad day can take out a star player for the entire season, essentially ruining a fantasy captain’s chances of winning. With more and more money being bet on the health and success of various players, people are naturally looking to protect their investments. That’s why some fantasy fans are opting to buy Fantasy Football insurance as part of their seasonal spending.
A few companies have emerged in recent years that allow fantasy players to take out modest insurance coverage for the athletes on their fantasy teams. Each company has its own stipulations, but in general the policy will pay out if an insured athlete experiences a major injury that makes him miss a certain number of consecutive games. These policies are generally intended to cover the amount of money the player spent joining the league and doing pre-draft and in-season research and stat tracking.
Premiums can range from less than $20 to $100 depending on how much coverage the player purchases and which athletes the policy covers (insuring an injury-prone athlete can cost more than someone who typically stays healthy all season). Most policies max out at $1,000 coverage, but the average policy is for $300-$500.
During the 2005 season, the first season Fantasy Player Protect offered Fantasy Football insurance, the company sold around 700 policies. A few years later, more fantasy captains had caught on. Fantasy Sports Insurance was founded in 2008, inspired by Tom Brady’s (New England Patriots) season ending knee injury that year, and reportedly issued 2,000 policies for the 2012 season.
Even organizations that run fantasy leagues are embracing this new type of insurance. National Fantasy Football Championship (NFFC) offered team owners who paid via a certain method free insurance coverage for one of their players. The site reports that no payouts occurred last year (because none of the insured players suffered a qualifying injury), but 2013 was a rough year for injuries, with 241 players on the injured reserve list or labeled as out indefinitely by the eighth week of the season. That year, fantasy team owners collected insurance on Doug Martin (Tampa Bay Buccaneers), Randall Cobb (Green Bay Packers), Reggie Wayne (Indianapolis Colts) and David Wilson (New York Giants).
The sustainability of this insurance venture is currently unclear. Neither of the two major players in the field have active websites right now, but NFFC appears to be offering fantasy insurance for the 2015 season through Fantasy Sports Insurance. The legality of this type of insurance has also been called into questions, since fantasy captains arguably don’t have an insurable interest in the health of professional athletes.
Either way, the Fantasy Football industry is growing, and with it, a lot more money is being spent. As fantasy fans get more serious, and buy-ins and payouts increase, they’ll likely look for ways to protect their investments.