Not the kind of insurance that you're probably thinking. This isn't about John Lannan or Chien-Ming Wang eating innings when Stephen Strasburg is shut down. We're talking actual insurance, like with dues and adjustors and such. And the Nationals have insurance on Strasburg's contract and signing bonus, which is a completely normal and expected thing. It might also be a factor in the Nationals' decision to shut him down. The Washington Post first had a writeup to a fascinating interview with Scott Boras:
"The protocol called for this range of innings, and we would then proceed with an increased amount of innings in 2013," (Boras) continued. "Everyone had notice of this. Everyone was given this. And to violate the protocol is something that ranges — in the opinion of medical experts — into risk factors....I pay very close attention to protocols given by physicians, particularly for players who have had operative procedures early in their career."
Boras mentioned legal ramifications, which sent people a-scurrying to conclusions. But he was likely talking about the insurance aspect, which the Post digs into later:
Boras had insisted the insurance policy for Strasburg’s contract could be voided if he pitches against medical advice and injured himself. Representatives from multiple specialty insurance companies backed the claim.
"Absolutely, it does" sound feasible, said Colin Fairlie, a vice president at Sutton Special Risk. "And frankly, I wouldn’t think that that would happen very often. What do you have a medical staff for if you’re not going to depend on their advice?
It's a tangled web without any easy answers, and while the insurance isn't the main (or even a primary) factor in the decision, it's still a multi-million-dollar factor.