Carnegie Insurance Service provides
personalities, including sports figures,
with necessary coverage
By Samuel Schiff
Alan S. Rubin is President of Carnegie Insurance Service Corporation in Cleveland, Ohio.
What's in a name? That which we call a rose by any other name would smell as sweet!
Romeo and Juliet--William Shakespeare
That famous line, spoken by Romeo to Juliet, notwithstanding, being a well-known person or having a "name" in today's world may not be so sweet. Just reading the papers or popular magazines or watching television tells us that being a public figure comes with a price. There is no doubt that fame carries a heavy burden.
The threat of violence is always present in these calamitous times, but far more common in our litigious society is a lawsuit against a high profile individual. While the assertion may be frivolous, the cost of defending can run into thousands of dollars, and if the charge is proven true, the verdict can cost millions. While various means of protection exist--including a cadre of bodyguards, a fearsome or aloof manner that turns off the public, or becoming a hermit--the protection that is most sensible for today's high profile person is a personal umbrella liability policy.
That's where Carnegie Insurance Service Corp. comes in. Headquartered in Cleveland, Ohio, the company has been in business since 1971. In addition, Carnegie has branch offices in Chicago, Illinois; Merrillville, Indiana; and Sarasota, Florida. Although Carnegie writes a broad range of personal lines and commercial insurance, its particular niche is working as a managing general agent with independent agents and brokers who have high profile "target" clients.
"This would include entertainers, politicians, Fortune 500 executives, television personalities and professional athletes," says Alan Rubin, Carnegie's president. "All these people are candidates for lawsuits, and the umbrella policy provides them with necessary protection over and above any underlying policy or policies they may have such as homeowners and auto insurance."
Along with Rubin, who is also the chief executive officer, Carnegie's other top officials are Scot Russell, senior vice president and chief operating officer; and Tom Novak, senior vice president and chief financial officer.
Rubin points out that not all high profile people are created equal. "There are four classes of high profile persons," he says. "There's the local name, local name and face, national name, and national name and face, with the premium depending on what category the person falls into."
He goes on to explain each of the classifications:
The local name would likely be a radio personality, such as a disc jockey or radio reporter, newspaper columnist or political figure, including the mayor, councilmen, county commissioners, and others, "The size of the town is also a consideration," Rubin says, "and in this classification it's a population in excess of 25,000 people.
"The second category is a local name and accompanying face," he notes. This would include a local television personality, such as a newscaster or local company executive or advertiser. Elected state representatives, state and federal judges also fall into this group. In the entertainment sector there are talent agents, writers, producers and directors with prime time record, television and/or major motion picture credits.
"The national name category would be someone whose name is well-known but whose face is unfamiliar to the average person, with best-selling authors as a typical example," says Rubin. "Others would include lead writers, directors and producers of primetime television shows or motion pictures, chief executive officers of Fortune 500 companies, nationally known syndicated radio personalities, mayors of cities with a population of more than 250,000 persons and U.S. congressmen and senators who are not nationally recognizable.
"The national name and face category is the largest and the one most susceptible to problems," Rubin explains. "These are the people whose names and faces are recognizable in all sectors of the media." This grouping includes any professional sports figure, whether player or coach in the National Football League, National Basketball Association, Women's National Basketball Association, Major League Baseball and Soccer Leagues, National Hockey League, professional men and women golfers, wrestlers, boxers, tennis players and race care drivers. Also college football and basketball coaches are included. "Away from the sporting world the listing is also extensive," Rubin notes, "and includes any national television personality, such as news anchors, news show and talk show hosts and comedians, television and movie stars and popular musicians in all areas of the music world. In addition anyone else who has 'instant' recognition falls into the high profile insured category."
Carnegie Insurance staff includes: (front row, left to right) Robert Wheatley, Personal Lines Underwriter; Thomas Novak, Senior Vice President; Alan Rubin; (back row, left to right) Dennis Liniman, Personal Lines Manager; and Scot Russell, Senior Vice President.
The majority of Carnegie's clients and the major portion of business come from professional athletes--particularly baseball, basketball, football and hockey players--and while the company is able to do business in all states, Ohio and Illinois account for the major portion of premiums followed by Indiana and Florida.
"The lion's share of submissions comes from independent agents who have sports management company clients," explains Rubin. "However, very often young athletes, particularly those just out of high school or underclassmen in college, do not have a manager; and a family attorney, relative or friend would contact his insurance agent to place the needed coverages. Accordingly, a number of our accounts are from agents in small towns who are not familiar with the marketplace and whose in-house carriers will not provide a premium quote."
It is also difficult to place an umbrella liability policy for young athletes because, in many cases, they may still live at home, do not own a car or, if they do, it may be newly acquired. Thus they do not have a profile. "Most standard carriers are reluctant to write a policy for the young athlete, so we are in a position to provide a monoline personal umbrella policy," Rubin says.
The volume of new submissions for umbrella coverage has increased since September 11, 2001, notes Rubin, in part because of the difficult homeowners insurance market as well as the negative publicity that some professional athletes have received recently. Because the value of many of the homes is in excess of $1 million and personal umbrella policy limits of $10 million or more are frequently requested, the standard markets are reluctant to offer such umbrella coverages.
"By working with several 'A' or better rated carriers," says Rubin, "we are able to place such accounts, thanks to a very knowledgeable underwriting staff. Also our coverages are available in all states." Carnegie's markets include AXA Fine Arts, Chubb Custom, Lexington, United States Liability and Navigator Insurance Co.
Admitting he is not a sports fan, Rubin says that a number of Carnegie's people keep him updated on the proposed insureds among the athletes. "When a name comes up, we do a thorough computer check on the person, to make sure that there are no problems that may have occurred while he or she was in school. We search the Internet in order to bring up a biographical profile," he notes, adding that often there is no insurance-related information or record and the athlete may still be living at home, thus making the placement of insurance difficult.
One of the features of the umbrella policy is that it follows the insured/athlete at all times. "Many of the athletes we insure maintain two residences--one for the season and another in the off-season. The policy that we provide gives them 24/7 protection," says Rubin. "Also, should an athlete be traded, there is no change in the policy coverage."
Along with maintaining two residences and the always-present possibility of being traded, there is the question of retirement. Rubin explains that the retention of coverage depends on the individual, but "they are still considered to have a high profile and if they become involved in an untoward event--such as an automobile accident--they are going to be sued. For that reason, maintaining the umbrella policy makes good sense."
While Rubin acknowledges that Carnegie's niche may be somewhat off the traditional insurance industry path, he adds, "We are not the only firm in the marketplace and the competition is becoming more and more intense."
In addition to writing insurance for high profile individuals, Carnegie is, in fact, a full service managing general agent. "Our personal lines department writes preferred, standard and nonstandard personal umbrella coverage for non-high profile insureds. We provide excess comprehensive personal liability (CPL) insurance for residences that are placed into state FAIR plans, and coverage for homes and condominiums that have been non-renewed." he says. Also Ohio Carnegie is the managing general agent for nonstandard private passenger automobiles.
"Another coverage we write is personal and corporate fine arts and collectibles insurance, primarily through AXA Fine Arts Insurance Company and Chubb Custom Insurance," Rubin says. He believes that art was badly underinsured by many firms whose offices were destroyed in the September 11, 2001, destruction of New York's World Trade Center.
The final piece of Carnegie's business is written through its commercial lines department, which places coverage for day care facilities and apartments, as well as professional liability and insurance agents errors and omissions coverage. It also provides coverage for restaurants, bars and nightclubs, including liquor liability. Carnegie also writes many classes of general liability and commercial umbrellas.
Carnegie's niche of insuring high profile personalities is a key engine driving its growth and while Rubin eschews making forecasts for the future, he indicates that the client list is increasing and renewals are growing steadily. It is clear that being a high profile person/celebrity is fine, but having the proper umbrella insurance protection is probably the single most important consideration in keeping problems away. *
For more information:
Carnegie Insurance Service Corporation
Phone: (440) 439-5555