From Amateurism to Endorsements – A New Era, A New Risk Landscape

Since the NCAA formally allowed student-athletes to profit from their Name, Image, and Likeness (NIL) in 2021, a tectonic shift has taken place in college sports. Athletes at universities large and small have signed endorsement deals with brands ranging from local car dealerships to national athletic wear companies.

But this new landscape brings with it a complex web of commercial, legal, reputational, and compliance risks—many of which universities are only beginning to understand. Whether an NIL deal is facilitated by the school, an affiliated collective, or the student-athlete independently, the institution could still be exposed to liability.

Now, risk managers, university legal departments, compliance officers, and finance leaders must rethink their approach to coverage, governance, and education. Let’s explore the primary risks NIL introduces—and how schools can proactively mitigate them through commercial insurance, contract oversight, and risk education.

1. Brand Association Risk: When Student Deals Reflect on the School

Student-athletes are seen as representatives of the university. If an athlete enters into an NIL deal with a company involved in questionable practices—or posts inappropriate content while promoting a brand—the reputational fallout could extend to the institution.

Example: A football player partners with a controversial energy drink company known for inflammatory social media marketing. If the athlete wears school-branded gear in the campaign, the university may face blowback even if it had no role in the arrangement.

Risk Mitigation:

• Implement clear NIL guidelines and policies that outline acceptable partnerships and restrict the use of university marks or branding.
• Require NIL contract reviews through the compliance or general counsel’s office, even if the deals are brokered externally.
• Consider reputation risk insurance or ensure D&O (Directors and Officers) policies address reputational damage fallout.

2. Legal Liability from Affiliated Collectives and Boosters

Many schools work closely with third-party NIL collectives—independent entities that pool donor or booster money to facilitate athlete deals. However, blurred lines between the university and the collective can lead to legal exposure if claims of undue influence, unfair recruiting practices, or Title IX violations arise.

Example: A collective tied closely to the school promises a recruit a six-figure NIL deal. If a rival program accuses the university of violating NCAA inducement rules, the school could face investigation—even if the deal was technically “independent.”

Risk Mitigation:

• Maintain formal separation between the institution and any NIL collectives, including legal independence and operational governance.
• Conduct periodic compliance audits of collective activity.
• Ensure the university’s E&O (Errors & Omissions) or professional liability coverage includes protection for compliance allegations tied to NIL.

3. Title IX Implications and Gender Equity Lawsuits

As NIL money flows primarily to male athletes in high-profile sports like football and basketball, some institutions could face scrutiny under Title IX. If schools are perceived to be facilitating or endorsing unequal economic opportunity for women athletes, legal action may follow.

Example: A university actively promotes male athletes’ NIL deals on social media or in university press releases while giving female athletes little visibility. This could be cited as unequal treatment.

Risk Mitigation:

• Develop a gender-equitable NIL support framework and track visibility metrics by sport and gender.
• Provide equal access to NIL education, legal resources, and networking opportunities for all athletes.
• Confirm that educators, athletic departments, and marketing personnel are included in employment practices liability (EPL) and Title IX liability insurance.

4. Contractual and Tax Risk for the Athletes Themselves

Many NIL participants are teenagers with no prior business experience. Mismanagement of contracts or failure to report income can lead to lawsuits, IRS investigations, or PR fallout—which could then be traced back to the university if it failed to educate or guide its athletes properly.

Risk Mitigation:

• Offer or mandate NIL literacy training covering contracts, taxes, intellectual property, and financial planning.
• Host legal workshops or partnerships with vetted third-party experts.
• Provide written disclaimers clarifying the school’s role and limiting institutional liability for mismanaged deals.

5. Insurance Gaps for Injuries During Commercial Activity

While traditional student-athlete policies cover injuries during university-sanctioned activities, they may not extend to injuries sustained during an NIL promotion—such as filming a commercial or participating in a photo shoot.

Example: A basketball player injures their ankle while filming an outdoor NIL spot for a local shoe company. Their athletic injury policy might not apply, leaving them (or the school, if involved) exposed to medical costs or liability claims.

Risk Mitigation:

• Educate athletes on liability insurance needs related to NIL activities, particularly if physical participation is required.
• Consider participant accident insurance or event liability coverage extensions for school-facilitated NIL engagements.
• Review policies to ensure appropriate secondary coverage is in place.

6. Use of School Facilities for NIL Deals

If student-athletes use university grounds, logos, or media teams to produce NIL content, they introduce additional risk—especially if the promotion is for alcohol, gambling, or other restricted categories.

Risk Mitigation:

• Require pre-approval for any NIL activity on university property, with facility use agreements clearly outlining liabilities.
• Restrict usage of logos, mascots, team names, and uniforms in NIL content unless licensed and approved.
• Protect the university through general liability and media liability endorsements where appropriate.

7. Increased Scrutiny from State Legislatures and NCAA Audits

With NIL still in its regulatory infancy, the patchwork of state laws and NCAA guidelines is constantly shifting. Schools face potential audits or investigations for non-compliance—whether intentional or not.

Risk Mitigation:

• Stay engaged with state legislation, especially as laws evolve to create uniformity or stricter enforcement mechanisms.
• Retain legal counsel or compliance consultants to review NIL frameworks annually.
• Ensure your institution is covered for regulatory investigations and legal defense under appropriate management liability insurance.

8. Future Claims from Disgruntled Athletes

As the NIL market matures, there may be lawsuits from athletes claiming they were deprived of fair opportunities, misled about the value of their deal, or denied equal access by the school or its collective.

Risk Mitigation:

• Maintain clear, documented policies and procedures for all athlete-facing NIL activity.
• Avoid favoritism in access to university NIL resources.
• Protect against lawsuits with E&O, EPL, and D&O coverage that explicitly includes NIL-related claims.

Building an NIL Risk Response Plan

As NIL becomes more embedded in the college sports ecosystem, schools should consider the following steps to create a formalized NIL risk mitigation strategy:

1. Form a Cross-Functional NIL Risk Committee – Include Athletics, Legal, Compliance, Risk Management, Finance, Student Affairs, and Communications.

2. Conduct a Risk Assessment – Map your exposure across all athlete touchpoints—on and off campus, contractual, reputational, and legal.

3. Review and Update Insurance Coverage – Work with your broker to audit your current policies and recommend endorsements or new coverage specifically for NIL-related exposures.

4. Develop a Training Curriculum – Include contract literacy, financial education, brand management, and ethical conduct.

5. Define Acceptable Use Guidelines – What NIL activities are permitted on campus? What brand categories are off-limits? Are there pre-approval requirements?

Conclusion: NIL is Here—Now Let’s Manage the Risk

NIL has opened exciting doors for student-athletes, alumni, and institutions. But it has also transformed the risk profile of college athletics. The schools that will thrive in this new era are those that treat NIL not just as a compliance issue—but as a full-spectrum commercial risk.
With the right policies, insurance coverage, education, and oversight, universities can empower their athletes while protecting their reputation, legal standing, and long-term sustainability.

Need Help Auditing Your NIL Risk Exposure?

HUB’s higher education risk and insurance experts can help you assess, model, and manage NIL-related risk across your institution. Let us help you turn uncertainty into strategy.