Fantasy sports insurance – revolutionary or flash in the pan?

Will fantasy sport insurance take off now that sites like DraftKings and FanDuel are starting to dominate the market?

Will Fantasy sport insurance grow as these sites get prohibited in certain states? 

Fantasy sports insurance - revolutionary or flash in the pan?Fantasy sports insurance - revolutionary or flash in the pan?

Back in 2009 the Wall Street Journal, reported about “A New Kind of Protection”, protecting fantasy owners from the loss when their superstar player goes down with a season ending injury.  The WSJ wrote, “Pro teams have hedged against their largest contracts with insurance for years. Now owners of fake teams can now protect themselves against the injuries of real players with actual insurance policies.”

In the article, an example of a company reported to offer this product is Fantasy Sports Insurance, or FSI, started by two brokers at Long Island’s Intermarket Insurance Agency, Inc.  FSI offers the fantasy owner the ability to recoup league fees and all other related costs if one of their star players falls to an injury and misses the bulk of the season.


This is a great Blue Ocean idea and InsuranceShark loves Blue oceans.

We are not sure who the insurance carrier supporting this product is however, as more and more insurance companies come into this space you can imagine there will be only a short period of Blue ocean, if it is successful. There has not been much media or press related to this concept lately and a number of the reported participants websites are under construction.

FSI offers three options for the nervous fantasy owner to protect his investment:

1. A player misses 10 of the first 15 games due to injury

2. A player misses eight of the first 12 games due to injury

3. Three players miss a combined 18 of the first 15 games due to injury.

InsuranceShark questions:

Now that daily fantasy sports has become so popular we have a few questions:

  • what has it done to the player who plays week to week competitions for a whole season?
  • Who is buying this season long product for a daily game? A lot has happened since 2009 and we are interested in if this product has taken off.

This is a great innovation in an insurance landscape that constantly needs innovations to stay relevant to the economy.  As risks change and the spread between economic and insured losses grow, the relevance of insurance to the economy decreases.  Therefore, this type of thinking is exactly what the industry needs.  We applaud the creators and innovators.

However,  a product similar to this brings into question the insurable interest.  If the risk associated with fantasy sports is insurable, how about the risk of going to a movie or game and not liking it? Can you collect an insurance for the ticket price?  Fantasy sports was ruled by the Supreme Court as a game of skill, can other skill games be insured?  What are the different impacts of Federal and State regulation and how will those coincide with Insurance regulation?

There are many questions to be answered and we are sure insurance regulators are also asking more questions, but once the daily fantasy sites get past their own growth/regulation problems – the landscape will be carved out for Fantasy Sport Insurance products.

More to follow from InsuranceShark…

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Arnold Smith

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