The Tua contract was about more than his playing abilities

Tua Tagovailoa, the stellar Miami Dolphin quarterback who has worked through his share of injuries, had his fifth-year option on his rookie contract picked up for $23.2 million for the 2024 season.

With their decision, the Dolphins bought themselves much-needed time on Tua. Some ask, were the Dolphins locking in Tua because if he suffers a career ending sickness or injury, the team has purchased career ending disability insurance to reinsure a portion of the extension? Or did the Dolphins lock in the 2024 season at half the contract price of the Giants' quarterback, Dan Jones' new extension, or both?

There are also those that were surprised by the move, as Tagovailoa's injury history, specifically the recent concussions he's suffered, have been well publicized. However, this signing is a clear example of a team who may have hit it out of the financial park twice. If they bought the career ending permanent total disability policy as reinsurance protection if Tua's career ends, then the Dolphins are covered. If they made a savvy financial decision in the wake of the marketplace to lock in less than $24 million for their marquee quarterback, then good negotiating.

I mentioned Dan Jones, so let's take a look at the New York Giants for example. Whether the team made a decision over injuries or over his play, the Giants declined Daniel Jones' fifth-year option. However, after a serious improvement in his play and the team's first playoff appearance and victory in many years, the team signed Jones to a four-year, $160 million extension that could wind up being worth as much as $195 million. While Jones had a quality, injury-free season, it's obvious the team would rather have had another year to see if he is able to duplicate what he did without investing almost $200 million.

Long-term permanent career ending disability insurance can be purchased to cover a number of years. Teams can use the permanent total disability insurance to offset a guaranteed player's contract if injury or sickness tragically ends a key player's career.

In Tua's case, trying to reinsure this new fifth year option may have been difficult at best. In addition to concussions he sustained this past season, the young QB also has had:

• Finger fracture - 2018

• High ankle spring (grade 3) - 2019

• Inguinal hip strain - 2019

• Rib fracture - 2021

• Finger fracture - 2021

The hip injury is particularly noteworthy because it's the same injury that ended former NFL running back Bo Jackson's NFL career roughly 30 years ago.

Professional teams today need to be confident in moving forward with extensions like this and are finding ways to afford young, promising quarterbacks even if they have had injury concerns. The dollar amounts for NFL signal callers is now approaching $50 million per season for playoff-caliber starters, and insurance like permanent total career ending disability policies may be one-way teams can protect their financial interests.

Permanent total disability is a product available at very high dollar amounts from Lloyds of London and others, with different years of coverage available. These policies can protect a team and/or player if an injury or sickness prevents that player from playing his or her professional sport in the future. Players can also protect their own interests by purchasing a permanent total disability policy and adding a rider to their coverage called "drop in free agency insurance" as they approach a new contract year. This rider covers the drop in free agency ranking or rating if the player gets sick or injured and the drop is tied to the loss of value.

Important strategy for players, agents, managers, and team executives

Sports has been a multi-billion-dollar business for decades, and while most teams have been wise enough to protect their financial futures, players, their agents, and managers have to think about and protect every draft, every contract negotiation, and every free agency period because their career earnings are short.

These types of policies, and the riders for drop in draft or drop in free agency, can be purchased for professional, collegiate, and even high school top draft choice athletes. For example, high school baseball players, young tennis players, and high round college athletes in both men's and women's sports are pursuing these types of policies in droves. Pricing varies based on the length of time for the permanent total disability benefits and the amount insured for drop-in-slot.

Professional teams will often reinsure key players' guaranteed salaries, but players can also purchase the coverage individually. Colleges and universities are also buying and offering permanent total disability as an incentive for a player to stay on for a fourth or fifth year to help their school win a national championship, or as a recruiting tool for players contemplating entering or coming out of the transfer portal.

Every policy needs a keen legal eye

While these policies provide rich benefits with modest premiums, the application process needs to be carefully addressed so no fraudulent misstatement arguments by the insurance company or the syndicate can bear fruit. The application process once an injury or sickness is present is a minefield of fatal problems if the claim application isn't meticulously presented. Often a player has a chronic sickness or injury that on the surface looks like payment should be imminent, but the company suggests it's not the result of the injury or sickness, but rather the player's girlfriend broke up with them the night before the combines, or the permanently disabling problem isn't an accident but an excluded condition like a degenerative problem.

Permanent total disability policies with a rider for drop-in-slot or drop in free agency are terrific additions to a team's insurance basket and now are increasingly part of a player's package, along with colleges and universities joining.

It is extremely important to consult with a skilled athlete disability lawyer on policy applications and key word analysis before these policies are purchased. Meticulous claim presentation and sometimes litigation is necessary, where an insurer or syndicate unreasonably delays or denies permanent total or drop in slot coverage. Litigation like this is not for the faint of heart. In fact, high stake athlete disability or team claims like these cost many hundreds of thousands of dollars to litigate and require cutting edge medical and insurance prowess to be successful.

Players, agents, business managers, team executives, athletic directors, and possibly even coaches should invest time talking to and becoming familiar with these types of insurance policies, to make sure that if disaster strikes, their interests are well looked after. If a marquee player gets sick or injured and there's no recourse, the losses can run into the millions of dollars.