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Featured Solutions: Liability (Personal)

Sports & Entertainment coverage is designed to protect athletes, entertainers and their representatives. In this case, Insurance Market Source discusses the loss of income specific to sports agents due to death, disability and disgrace of a professional athlete.

No one wants to open the morning sports page to find their favorite player is out for the season, especially if they earn income based on the athlete’s ability to play. Just as athletes insure their championship rings, sports agents, financial advisors and lending organizations need to safeguard their championship accounts with Sports & Entertainment Insurance.

Financial Impact: Beyond the Player

Career-ending injuries can have a disastrous financial impact not only on the player and franchise, but also on the professionals employed by the player. In 2003, Jay Williams, former basketball player, was in the second year of a $16.14 million contract with the Chicago Bulls when he sustained career-ending injuries in a motorcycle crash. Williams injury led the Bulls to a $3 million buyout of his contract in early 2004.

According to Andy Furr, Assistant Director, Accident, Health & Special Risks with London-based Chesterfield Group, “Beyond the club or franchise, there are a number of other individuals and organizations that are financially dependent on a professional athlete’s contract. The risk of being uninsured is the loss of income derived from services provided to the athlete.”

Retail brokers and agents should ensure their clients who work with professional athletes are also properly covered against financial losses due to a player’s injury.

Loss of Income: Off Court Behavior

Injuries are not the only instances that can end an athlete’s career. An athlete’s off the court behavior can become an issue to the franchise and the player’s sponsors as well. The behavior does not need to be criminal to lead the athlete’s team and sponsors to break their respective contracts with the player.

“Behavior that simply does not reflect the team or a major sponsor’s values can place a player’s contract in jeopardy,” adds Chuck Bastan, National Sales Manager, Burns & Wilcox, who specializes in accident, health & special risks.

This past September was the first month since July 2009 that an NFL player was not arrested. “That is 73 straight months of one or more NFL players having their names in the headlines for reasons detrimental not only to themselves, but to the franchise and sponsors they represent,” says Bastan. “In fact, during the past five years there were a total of 254 NFL players that have been arrested. Keep in mind, we are just talking about one of the major sports here and have not even touched on other professional sports.”

Sports agents, financial advisors and lending organizations are at an elevated risk for financial losses resulting from a player’s acts of disgrace.

Protecting Your Clients

For retail brokers and agents who insure athletes and their paid representatives, Sports & Entertainment coverage is an important addition to the insurance policies already being provided. Policies are tailored specifically to the contracts of each athlete the client works with.

“Coverage can depend on the position they play, value of the contract and how much time is left on the contract,” says Furr. “Oftentimes athletes who are cleanest cut can be the hardest to cover.”

Furr explains, “When someone has a known persona with a reputation for being wholesome or straight laced, then the risk of losing a contract due to disgrace can be bigger than for someone who is known to have a checkered past.”

Brokers and agents should work with a wholesaler to gain an enhanced understanding of the risks facing their clients in order to be in a better position to recommend tailored solutions.

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