INSURING FAME & FORTUNE

Rough Notes, Dec 2004 by Zinkewicz, Phil

From its beginnings as an insurer of professional sports, Sutton & Co. expands to cover entertainers and corporate executives

In 1978, Bill Sutton had just started up his Canada-based insurance agency, which he named William J. Sutton & Company, Ltd. At that time, the managing general underwriter (MGU) wrote insurance coverages only for professional sports teams and players. One of his first clients was a young basketball player named Larry Bird, entering his rookie season for the Boston Celtics. On the day that Bill and Larry were to meet for the first time to finalize a personal disability insurance contract, Bill was sitting in the doctor's office waiting for Larry and his agent. Eventually Larry arrived with his arm in a sling and a splint on one finger. Bill quipped: "We're not starting out very well, are we?"

"Of course, everyone laughed," says Bill's son, J. Gregory Sutton, executive vice president of William J. Sutton & Co. "Larry was a shy, unassuming young man from French Lick, Indiana, and he hastened to assure my father that he had only slightly injured himself playing baseball with his brother. Larry and my father hit it off beautifully and the contract was signed."

Today Sutton & Co. still specializes in providing insurance products and services to respond to the unique needs of professional sports teams and athletes. However, over time, the company has developed into a broad specialty accident & health underwriter, offering specialrisk coverages for many clients and risks in the corporate world and the entertainment field.

Last year, Sutton & Co. celebrated its 25th anniversary with a "family skate" at the Air Canada Centre. Clients, friends and their families skated on the home ice of the Maple Leafs alongside four great Leaf captains from Sutton & Co.'s last 25 years. The Toronto Maple Leafs were my father's very first client in September 1978."

The MGU has come a long way since those early days. "Our primary markets are Canada and the United States, although we can write business all over the world because of our binding authorities and treaties with Lloyd's of London," says Greg. "On the professional sports side of our business, the majority of our book comes from the U.S. On the specialty side, most of our business comes from the Canadian corporate world. We are primarily a surplus lines market. Our motto is, if you can get the coverages you want at the limits you want in the traditional marketplace, then do it. We entertain the risks that fall outside the parameters of the usual. Our risks are special, whether because of high limits, location or occupation."

One of the products available from Sutton & Co. is high limit disability. "This product was developed for the professional sports and entertainment industries, but it is also available for corporate executives and other business professionals," says Greg. "It offers high individual sums insured, broad coverage to include special exposures and the availability of high-limit, lump-sum benefits in the event of permanent disability. We sell temporary total disability, insuring against injury or illness that causes a temporary inability to work, and permanent total disability, which insures against an injury or sickness that causes the insured to be disabled beyond hope of improvement and permanently prevented from engaging in their occupation or profession. High-limit disability is most suitable in situations where there is a contract, a guarantee, an obligation or a value related to a person's ability to perform their occupation. In the case of sports professionals, this cover can be purchased by an individual player or by the team."

Sutton & Co. also underwrites accidental death and dismemberment protection for sports figures, entertainers and executives in the corporate world. "In AD&D, the principal coverage is a lump-sum benefit for accidental death," says Greg. "Also included are benefits for loss of limbs or faculties under a dismemberment schedule. This coverage is usually purchased by teams with themselves as the beneficiary. The sum insured is normally the equivalent of the player's contract, although asset value can be taken into consideration. An option is for a team to purchase term life insurance as a replacement for AD&D."

The MGU also sells personal accident insurance and major medical policies for individuals traveling to faroff countries. Among the more exotic products offered by Sutton & Co. are special hazards products. "For example, we offer war risk coverage," Greg says. "This is a coverage routinely excluded by other underwriters, but it can be covered under a specially designed AD& D policy. We also write corporate owned or leased aircraft. Coverage is for concentration of risk for employees or guests traveling together. We can also provide coverage for foreign residents to fill the gap on group programs that typically exclude foreign nationals and other employees working abroad. Recreational activities such as pilot coverage can be added. In firms whore employee business travel is widespread, a group business travel contract can be provided with coverage for all accidents 24 hours a day while on the trip. Terrorism insurance is another coverage often excluded by other underwriters, but we can provide a product for that as well."