Most of A-Rod's owed money insured

If Alex Rodriguez is unable to play in 2013, or in a worst-case scenario is forced to retire because of the hip injury that will require surgery next month, it would not be a total loss for the Yankees.

At least not financially. According to a baseball source with knowledge of the contract, the Yankees are insured for a good portion of the $114 million they owe Rodriguez over the next five seasons.

According to the source, who has worked on similar contracts, it is likely that New York could recoup at least 75 percent, and perhaps as much as 100 percent, of the money it would still have to pay Rodriguez.

However, Rodriguez would have to be disabled for at least a full season before the team could begin to collect on the policy it has with Team Scotti, a Pittsburgh-based insurance firm that provides insurance to Major League Baseball teams. It is unclear whether the contract, which runs through the 2017 season, is insured for its entire length.

It is also unknown whether any exclusions were written into the policy that would void it in the instance of certain injuries, although at the time the Yankees signed Rodriguez to a 10-year, $275 million extension after his 2007 AL MVP season, he had been remarkably healthy, spending only three brief stints on the disabled list in his first 12 seasons and playing in all 162 games three of those years.

Yankees president Randy Levine refused to provide details on the insurance policy covering Rodriguez's contract, and declined to give approval for John Scotti, the owner of Team Scotti, to speak with ESPNNewYork.com. But in a recent article published in Insurance Journal, an industry publication, Scotti was quoted as saying insurance companies have put a five-year limit on policies covering "most professional athletes." Whether A-Rod falls into that category is unknown, as is how much the Yankees had to pay to insure what was the most lucrative contract in the history of professional sports.

The Yankees announced on Monday that Rodriguez, who will turn 38 in July, would undergo surgery on the labrum in his left hip, a procedure similar to the one that was performed on his right hip before the 2009 season. The team said it expects his recovery to take four to six months, which places his return to action in late June at the earliest.

According to Chris Lack of Exceptional Risk Advisers, a firm that also insures professional athletes, the coverage on a contract the size of A-Rod's was likely spread out over several insurance companies.

"No one would take that on themselves," he said.

Lack also said that Rodriguez's latest injury would not necessarily make it impossible for the Yankees to trade him at some point in the future -- if they are able to transfer the insurance policy to the next team along with the contract.

After a four-to-six-week period of pre-rehabilitation, Rodriguez will undergo arthroscopic surgery by Dr. Bryan Kelly at the Hospital for Special Surgery in Manhattan in mid-January. The surgery on his right hip, which cost him six weeks of the 2009 season, was performed by Dr. Marc Philippon of Vail, Colo.

The Yankees say Rodriguez's injury was detected in a routine postseason examination by Philippon. According to general manager Brian Cashman, the latest hip problem likely contributed to Rodriguez's poor performance in the playoffs, although Cashman said Rodriguez was "asymptomatic" and not in any pain during the postseason, in which he batted .200 and was benched for three games.