It's the most a college player has ever collected on a loss of value policy, which insures the player if he slips in the draft.
Olomu and the University of Oregon bought the loss of value policy for the first team All-America cornerback before his senior year. Olomu tore his ACL in practice two weeks before the college football semifinal playoff game at the Rose Bowl against Florida State.
At the time the policy was written, Olomu was projected to be picked among the top 12 in the first round. But he slipped to the seventh round and therefore was due the money because he lost at least 50 percent of his value. The Cleveland Browns took him 14 picks before the last player taken.
Olomu revealed soon after the draft that he had also dislocated his knee, and he likely will miss the entire 2015 season for the Browns.
Loss of value policies, which are attached to permanent disability policies, have been offered to college players for years, but they have picked up in the past two years as schools have found a way to pay for them.
A source said that Olomu paid for the majority of his premium but that Oregon did contribute. It is not clear how Oregon's contribution will result in any loss of tax benefits. If the player pays the full premium, the money has been tax free.
Chris Larcheveque of International Specialty Insurance, which wrote the policy, declined to comment on more specifics of Olomu's policy.
Although Olomu will collect $3 million, his injury still cost him about $4 million. Had he not been hurt, Olomu could have been selected in the top 12. The Minnesota Vikings took cornerback Trae Waynes with the 11th pick and gave him $7.6 guaranteed. Ekpre-Olomu's signing bonus is less than $60,000.
Olomu is the second player to collect on a loss of value policy. Former USC running back Silas Redd, who had injuries as a junior and a senior, collected an undisclosed amount on his policy when he went undrafted in 2014.
The fact that the companies are paying up is believed to be good for the insurance product, as it could encourage more players to take out such policies -- as long as they think they could collect.
Former USC wide receiver Marqise Lee is suing Lloyd's of London for $4.5 million after the insurance company refused to pay the wide receiver when he slipped to 39th (selected by Jacksonville Jaguars). Lloyd's of London says he failed to disclose a knee injury when he applied for the policy.
Lloyd's of London also went to court to fight the largest claim in NFL history in the early '90s. In 1993, a jury awarded former Seattle Seahawks linebacker Brian Bosworth nearly $7 million.