The 2025 college football season is in full swing and the impact of name, image, and likeness rights is apparent. Recent transfers allowing college athletes to make big money is having an immediate and substantial effect.

But individual monetization is just the tip of the iceberg.

As student-athletes capitalize on their personal brands, new opportunities—and liabilities—are emerging for universities, athletic conferences, donors and sponsors, among others. Whether the goal is to guard against developing liabilities or protect the NIL revenue stream, stakeholders should consider both traditional and specialty lines of insurance.

1. What is “NIL”?

NIL rights allow college athletes to profit from their personal brand while maintaining amateur status. This includes earning income through endorsements, social media and other ventures.

The 2021 Supreme Court ruling in NCAA v. Alston allowed schools to provide education-related compensation to student-athletes, opening the door for athletes to pursue previously restricted business opportunities.

From 2021 to summer 2025, while genuine NIL deals took place, many schools used NIL payments as disguised “pay for play,” prompting criticism that these payments were not based on true market value for athletes’ NIL rights.

2. A new precedent

In June 2025, the $2.8 billion House v. NCAA settlement was approved, introducing revenue sharing between universities and athletes and updating the NIL framework.

The settlement, which resolves several antitrust lawsuits, sets caps on student-athlete compensation and adds reporting requirements for NIL transactions over $600, aiming to increase transparency and formally recognize athletes as stakeholders in college sports.

This landmark decision marks the NCAA’s public acknowledgment of collegiate athletes as significant stakeholders within the multibillion-dollar college sports industry.

3. Emerging risks

With new opportunities come new risks. The expansion of NIL rights introduces new exposures for involved parties:

• Universities may face management and board-level liability for failing to adequately monitor NIL deals, ensure Title IX compliance, or violating the tax code and jeopardizing their tax-exempt status.
• Athletes risk breaching contracts, violating NCAA or institutional policies, or becoming entangled in disputes over representation and compensation.
• Donors may question their investment when the athlete they supported is injured.
• Sponsors must navigate reputational risks and comply with advertising and endorsement regulations on both a state and federal level.

Critically, stakeholders must also consider risks like injury, academic failure, expulsion or transfer, as these can affect lucrative NIL earnings. Measures should be taken to safeguard NIL revenue in these scenarios.

4. Insurance can assist

To mitigate NIL-related risk, traditional and specialized insurance products should be considered. Stakeholders can benefit from the following insurance products:

• Permanent total disability insurance provides athletes with a lump sum payout if a career-ending injury or illness occurs, helping them recover lost future earnings. This coverage is common in professional sports contracts.
• Loss of value insurance protects against a drop in future contract value due to injury or illness. It is common among draft-eligible athletes or players nearing free agency.
• Temporary total disability pays a percentage of an athlete’s salary during recovery from a temporary injury or illness. Given the increase in student-athlete compensation, these policies may benefit underclassmen with remaining college eligibility.
• Contract guarantee/endorsement insurance guarantees contract or endorsement payments if an athlete is injured and unable to perform.
• “Booster insurance” is a new product developed as a direct result of the settlement and pays the donors that contributed the funds to retain an athlete that was subsequently injured.
• Critical illness and accidental death insurance insures against serious illness or accidental death to safeguard dependents and estates. This is often combined with career-ending coverage.
• Event insurance protects income tied to specific tournaments, playoff bonuses and special events. This includes appearance fees, prize money, or loss performance bonuses due to injury.

Traditional insurance lines like directors and officers (D&O), commercial general liability (CGL), errors and omissions (E&O) and media liability also cover NIL-related liabilities.

• D&O insurance can protect university board members against claims like breach of fiduciary duty related to tax-exempt status. Most universities qualify as tax-exempt under 501(c)(3) due to their educational mission or state affiliation. Recently, concerns have arisen that NIL deals could threaten this status, as direct compensation for NIL activities might violate rules prohibiting university earnings from benefiting private individuals.
• E&O insurance can guard institutions and sponsors against claims arising from misreporting NIL deals. The House settlement calls for fines against universities that misreport NIL deals. E&O policies may cover resulting claims and fines.
• CGL and media liability policies cover claims like defamation and advertising errors. With student-athletes signing deals with brands that may compete with exclusive university sponsors—such as Duke’s Cooper Flagg endorsing New Balance while Duke has a Nike contract—these policies help manage related risks.

Insurance is a proactive tool in the NIL ecosystem. As student-athlete compensation evolves, expect new insurance products and litigation.

Policyholders should check if current policies apply to these risks, since prior bans on such compensation may have required outdated exclusions.

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Originally published on November 6, 2025 with University Business. Reprinted with permission. Further duplication without permission is prohibited. All rights reserved.