The season-ending injury to Dallas Cowboys’ quarterback Dak Prescott’s ankle has caused many to begin to wonder what will happen to Prescott from an economic perspective in case he never comes back to playing at full health. While unlikely, there is a possibility that Prescott will be unable to fully regain his prowess, which would be rather unfortunate for the quarterback, who was performing on a one-year, $31.4 million guaranteed contract when the injury occurred.
The positive for Prescott is that it appears he has covered himself with insurance policies. Per a September 8, 2019, article on Bleacher Report, Prescott has maintained loss of value and permanent disability insurance policies worth more than $50 million, which protect Prescott in case he is severely injured. Assuming he maintained the policies, he should be resting a bit more peacefully after surgery.
It is also possible that Prescott increased the value on his insurance policies after Patrick Mahomes and Deshaun Watson signed record-breaking deals for NFL quarterbacks. Even if he did not, Prescott was likely paying high six-figures and possibly a bit above $1 million in premiums for his insurance policies, per Matthew Vuckovich of The Gilbert Group, who works with athletes, entertainers, and surgeons on their insurance planning, and said that increasing the policy limits would have been money well spent.
Vuckovich, who has not worked with Prescott, said that if Prescott were his client he would have recommended sourcing the market for all cover holders for Lloyd’s of London to determine who was offering the highest loss of value and personal disability limits with respect to policy language. He would then try to obtain the highest coverage, irrespective of the premium, because Prescott is what he referred to as a “maximum contract guy.”
“Coverage would depend on what the cover holders are sourcing from the league,” Vuckovich said. “They contact scouts, front-office personnel, etc., to determine market value. They have their own internal teams that handle this for the different sports.”
While permanent disability benefits, which are paid out tax-free, would only kick in should Prescott never take a snap under center ever again, loss of value benefits (also paid out tax-free) could prove valuable to the injured quarterback. Vuckovich said that it is standard in the sports industry for insurers to offer one- to four-year policies irrespective of the term of the player’s contract.
“Loss of value is a threshold marker going into a contract year,” Vuckovich added. “The policies are constructed based upon data gathered and the threshold that the insurance company feels comfortable using. The tax-free benefit to the player is basically the difference between the threshold from the insurer and what the player signs for. That includes non-guaranteed money.”
People commonly talk about disability insurance not being paid. However, Vuckovich said that many of his clients have been paid out, whether in full or based on a settlement. Prescott and his advisors could be busy reviewing the Cowboys quarterback’s policy language as he attempts to recover from the nasty injured suffered on October 11.
Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at heitner@gmail.com and follow him on Twitter at @DarrenHeitner.
Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.
Kathryn Rubino is a Senior Editor at Above the Law, and host of 
