Insurer QBE has reportedly declined a $1.2 payout over Anthony Watmough's career-ending knee injury, leaving Parramatta to pay out the remainder of his NRL contract.
News Corp Australia is reporting QBE has deemed the knee injury that ended the veteran's career - barely 12 months into his four-year Eels deal - was pre-existing.
Faced with paying out Watmough's contract for the next two seasons, Parramatta reacted angrily on Thursday night to the insurer's denial of the claim.
A furious Eels administrator Max Donnelly told News Corp: "It's outrageous!
"Why the hell do we have insurance?"
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If Parramatta end up funding Watmough's contract, it will leave the club a record $11 million-plus in the red for the 2016 season.
The only encouraging news for the Eels is that the NRL says the former Manly forward's payout will not be included in the 2017 and 2018 salary caps, despite QBE's ruling, leaving them free to pursue marquee players.
A NRL spokesman said QBE's decision did not override the league's ruling in May that Watmough's injury was career-ending.
"If we determine a player has suffered a career-ending injury, we can exclude that player's payments from the salary cap."
The Watmough insurance claim is believed to have been the first potential seven-figure payout for a player's career-ending injury since QBE became the insurer for the top 25 players at each club in 2014 after the Alex McKinnon tragedy.
