J. Gregory Sutton is Executive Vice President of Canada-based William J. Sutton & Company, Ltd.
INSURING FAME & FORTUNE
From its beginnings as an insurer of professional sports,
Sutton & Co. expands to cover entertainersand corporate executives
By Phil Zinkewicz
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J. Gregory Sutton is Executive Vice President of Canada-based William J. Sutton & Company, Ltd. |
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 special-risk 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 far-off 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 where 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.”
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—Greg Sutton |
Sutton & Co. also offers extortion, kidnap ransom insurance, a product generally considered a property and casualty coverage, but one which Greg says fits into the company’s areas of specialization. “Each year, thousands of people are kidnapped worldwide,” he says. “While the majority of incidents occur in South and Central America, some of the better-known cases have occurred in North America and Europe. Though in the past associated with political motives, the majority of kidnappers remain primarily concerned with financial gain, increasing the need for this type of protection for many clients. In our program, four basic coverages are provided to a maximum limit of $20 million: kidnap/ransom; extortion/bodily injury; extortion/property damage; and post kidnap/extortion exposures. One of the most valuable features of our program is the exclusive expert crisis assistance of Control Risk Group (CRG), the world’s leading specialist international business risk consultancy. CRG guarantees, subject to visa availability, to have a consultant on the scene of an incident within 24 hours anywhere in the world. On call 24 hours a day, the services of CRG’s worldwide negotiation team are provided to our policyholders at no additional charge.”
Greg says that market capacity for sports insurance coverages has shrunk considerably in recent years, especially for players. “Salary levels for top players have risen to such astronomical amounts, that many insurance companies are reluctant to write high disability levels,” he says. “Also, medical technology and expertise has moved rapidly. On the one hand it can be beneficial to underwriters. There was a time when a knee injury could keep a player out indefinitely. That’s what happened to Bobby Orr, who suffered some serious knee injuries back in the 1970s. Today, with new surgical techniques, a player can be back in the game in a relatively short period of time. On the other hand, there is the concussion exposure. Years ago, if a player experienced a concussion, that player would go right back onto the field and continue playing. But with the advances in new medical technology today, we know a lot more about the long-term effects of concussion. Players are reluctant to return to work too soon after a concussion. Because of the volatility in the sports business, a lot of insurance companies have moved out of the business.”
Greg says that Sutton & Co. was encouraged by representatives of Lloyd’s of London to take its sports-related products into the corporate world in the early 1980s. “So, for the last 20 years, we have been aggressively pursuing corporations and their executives with our products,” he explains. “Today, a corporate executive’s salary can be upwards of several million dollars annually. Our high-limit disability and AD&D products fit nicely into this market just as they do in the sports area. Our kidnap ransom products are particularly applicable in the corporate world. Today, our sports business and corporate business run about 50-50.”
On the entertainment side of the business, Sutton & Co. sometimes comes across the more than unusual exposure that must be dealt with. “We insure singers against the danger that they will lose their voice for a period of time,” says Greg. “We have insured symphony conductors and musicians against the loss of limb. We also sell prize indemnity insurance, such as hole-in-one coverage. The strangest insured we had in that area was some years ago when a tour company was trying to promote its cruises. They had one cruise that had an ‘Elvis’ theme, where people would come dressed as Elvis. They advertised that they had sent Elvis an invitation at Graceland to this cruise and that, if he showed up—the real Elvis, mind you, not some Elvis impersonator—then everyone who bought tickets to the cruise would be reimbursed. We provided the prize indemnity protection in case Elvis showed. We didn’t exactly feel like thieves, taking the money for this coverage. But you can be sure that we kept the premium very low.”
Sutton & Co. continues to expand and grow. Greg reports that he is “very excited” to be in the process of finalizing a strategic alliance with an A rated domestic life and health carrier to further develop the MGU’s specialty accident and health products in the United States. *
For more information:
William J. Sutton & Company
Web site: www.wjsutton.com