With insurance, bases covered on Beckett

Sox likely to buy some insurance

By Nick Cafardo
Globe Staff / April 7, 2010

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Baseball teams are insuring fewer players on their roster because premiums are so expensive. But rest assured, while there is no medical language per se in Josh Beckett’s four-year, $68 million deal, there likely will be major protection for the Red Sox if Beckett breaks down.

General manager Theo Epstein said the team put its money where its mouth is in terms of signing Beckett without medical language, but lost in the verbiage was that Beckett was insurable. The likelihood is that the Sox eventually will take out a policy on him; it may be a mere formality after the contract is officially filed or when the extension kicks in next season.

According to one industry source, a contract the size of John Lackey’s or Beckett’s could cost the team in the $3 million-$4 million range if the entire deal is insured. Teams are allowed to insure 50 percent, 75 percent, or all of the contract, and it usually comes with a waiting period of 90-120 days of disabled list time before a team can collect. The rates for pitchers are higher, according to industry sources.

Epstein has gone about signing at-risk players in different ways. In the case of Lackey and J.D. Drew, the team likely did not take out insurance because of the inclusion of medical clauses. Drew’s deal could be void if he suffers a right shoulder injury and misses 35 games. Lackey’s deal includes a clause where, if injured seriously enough, he has to give the Sox an option season at the major league minimum.

But if no medical language was included in Beckett’s deal, many are wondering, why wouldn’t the Sox have taken out insurance for a Jason Bay deal? Again, because the cost would have been prohibitive, and according to an industry source, Bay’s pre-existing condition might have created issues concerning a payout because, as an everyday player, his injuries would be tougher to discern than those of a pitcher who blows out his shoulder or arm.

Yet Sox fans still will wonder, could the team have paid the exorbitant premiums and reduced Bay’s salary a tad? Bay himself is probably wondering the same thing after the Beckett deal. The Sox are willing to pay the freight for his insurance because they know they aren’t throwing money out the window. Beckett’s right rotator cuff didn’t undergo a major healing process over the last year. Whatever is in there, is in there.

As long as the insurance company is comfortable with the data it gathers independently and from the medical tests the teams have provided, that’s all it cares about. And Beckett has pitched well with whatever maladies he has in the shoulder for a few years.

With the four years, the Sox stretched the contract to its limit. There was no way they would have gone to a six-year commitment, despite their optimism about Beckett’s health. They elected not to go the route of a medical clause, but was that because Beckett’s agent, Michael Moye, wouldn’t go for it, or because the Sox knew they would find another way to protect themselves?

The Beckett signing is a win-win.

As Terry Francona pointed out yesterday, acquiring premium pitching can be an expensive proposition. And if you have it, you might as well keep it unless you can do better in free agency. Beckett could have been a free agent after this season, but in hitting the market, he would have taken a major risk that 1. he could stay healthy all season and 2. he would have a season worthy of No. 1-type money.

The Sox got it all with this one; they even skirted the luxury tax for this season by announcing the deal after Opening Day, saving themselves about $880,000 on this year’s tax.

So now all that’s left for the Sox is to decide how much insurance they’ll need to buy on Beckett.

One way or another, the Sox will protect their investment.

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