Parramatta is taking landmark legal action against the NRL’s insurer after it refused to make a seven-figure payout to Anthony Watmough.

The Eels have begun Supreme Court action against QBE with a claim of $1,096,613 over the insurer’s decision not to provide Watmough a career-ending insurance payout.

The case has the potential to result in a flood of similar claims from NRL clubs relating to injuries that have led to players retiring prematurely.

Former Parramatta forward Anthony Watmough's injury is the centre of a landmark Supreme Court case. Credit:Matt King

Parramatta signed Watmough on a four-year deal from 2015 to 2018, although the former Manly, NSW and Australian backrower managed just 17 appearances for the blue and golds.