Craig Calcaterra makes a great point about the Red Sox and insurance in regards to the Jason Bay contract:

To sum up: Henry’s bad experience with an insurance company has caused him to (1) take a hard line on pre-existing conditions; and (2) demand large deductibles. In light of this, it would seem that in the case of the Red Sox anything an insurance company could do would be redundant.

The Red Sox try to force the player to insure the contract. If they keep this up, I would think the union would come down on them, as player contracts are supposed to be guaranteed. The players, however, might benefit in the long run to insuring their own contracts through giving up money for pre-existing conditions. Any money a team pays to insure a contract is money the team doesn’t use to pay players. So the players could demand higher salaries in exchange for covering the cost of a pre-existing condition.

There was a free-agency year earlier this decade where teams were limiting players to three-year contracts, because insurance companies would not write policies past three-years. Of course, the real reason was that insurance companies would not write contracts past three years for the price the owners were willing to pay. Any risk can be insured, it just may be very costly to do so.

I’d love to see John Dewan, an actuary before he joined STATS, Inc., to do a study on how much players my gain via insurance on their own contracts.