Fantasy Sports Team Owners Can Score Real Disability Insurance

About a year ago, Long Island, N.Y., insurance broker Henry Olszewski was sitting pretty, poised to make a run at a fantasy football league title with New England Patriots quarterback Tom Brady, the reigning National Football League most valuable player in 2007, leading Olszewski's team.

Then Olzsewski's fantasy world crumbled. Brady suffered a serious knee injury midway through the first quarter during the first game of the season. He was out for the year.

"Friday, he was psyched for the season to begin; he thought he had the winning team," said Anthony Giaccone, a broker with Olszewski at Intermarket Insurance Agency Inc., a nationwide insurance brokerage founded about 75 years ago. "Sunday, that was pretty much all gone."

Giaccone said Olszewski came into work Monday with a question the pair have turned into a one-of-a-kind business venture: "Why can't you buy disability insurance for your fantasy football players?"

Now, you can. Giaccone and Olszewski on Aug. 1 launched Fantasy Sports Insurance, which offers what they say is the first policy that recoups fantasy team owners of all costs associated with the league should a key player suffer a serious injury like Brady had.

With Brady's injury last year, not only was Olszewski's season ruined but so were possibly hundreds of thousands of others. At the time, Darren Rovell, sports business reporter for CNBC, said Brady's injury shifted about $150 million in fantasy league winnings, and other fantasy football experts said Brady's injury affected the value of other players, such as wide receivers on the team.

Team owners in fantasy leagues basically act as owners and draft players from professional sports to make up a team. Leagues differ -- from fees to play to points awarded for certain statistics -- but owners of some of these teams invest a lot of time and money into the hobby. The fantasy sports industry is said to rake in about $800 million to $1 billion annually.

A policy from FSI allows owners to recoup their total league investment, including money spent on Web sites and magazines used to study statistics.

"I just thought it was immediately an interesting idea and when we looked and found out that about 11 million fantasy football teams are founded each year, it was clear there could be an opportunity," Giaccone said.

Giaccone said he gauged some interest among fantasy team owners and got positive responses. Then, he looked to insurers. Policies are underwritten by Lloyd's, which offers disability insurance to professional athletes.

"They had a comfort level for this and loved the idea," Giaccone said. "It's really no different -- you're just working with smaller numbers."

FSI compiles a list of the 50 top fantasy players from each sport. Insurance can only be purchased for these players, Giaccone said. Four coverage options are offered that allow an owner to insure one to three qualifying players at a time. Cost is calculated at a 10% rate of the insured value, plus fees. If an owner insures one player for $200, the cost is $20.

Fantasy Sports Insurance offers its policies online, only to fantasy football team owners but Giaccone said they plan to expand to professional baseball, basketball, hockey, soccer, racing and golf.

"Right now, we're on target with our market research," Giaccone said. "We've sold a lot of policies."