The caste of athletes is as old as history. So is the caste of insurance salesmen: in ancient Babylonia, merchants underwrote the caravans through loans that were paid back when the goods arrived. Only in recent years, however, have the two broad industries of insurance and sport recognized the financial opportunities that each provides for the other. Today they are so closely mated that every kick, dribble, stroke, wheel and lace of sport is insured against life's impending dooms.
Dooms are everywhere, of course, and they range from oversudsing to earthquakes. Perhaps the most impending of them all in the mind of the sports fan—or sports executive—is a plane crash in which a whole athletic team would perish. Humans have an inborn fear of flying. Nearly every comedian has a routine about it. And it was an acknowledgment of this fear, coupled, perhaps, with the fear of going broke, that prompted the owners of professional baseball and football teams to adopt disaster plans whereby, through insurance, a ball club could be restocked with players in the event of a crash.
The National Football League has a plan which allows the owner of any team lost through an air disaster to collect $2.25 million from the insurance underwriters. Half of that sum would serve to help a team immediately purchase proven talent from the remaining squads in the league; the balance would be working capital for the future. The premium costs $1,342.85 per club. In baseball the American League has what it prefers to call a "rehabilitation plan." Under any name, the plan provides a $1,875,000 policy for the purpose of restocking a club—at $75,000 a player—after it has lost seven or more players through a crash. The premium costs about $50,000 for the three-year period and is prorated among the 10 American League teams.
The National League has no such disaster plan, but the league does provide a $50,000 traveling policy for every individual player and coach. The league bears the entire cost of the premiums, which total about $10,000 per year. In the event of a disaster, President Warren Giles says an emergency meeting of owners would be called and a club restocked. "We feel you can deal better and more generously when a man is in trouble than if you have a prearranged plan," says Giles. He said something very much like this before his team owners stocked the Mets.
Baseball takes the precaution to insure itself against a lot of other things besides plane crashes. It worries about public liability, property, fire, theft and—sometimes—a wild throw or a wicked foul. The clubs do not insure their superheroes against sore arms and chipped bones (the players have their own policies), nor do they insure themselves against the loss of revenue in case a superstar gets hurt ("I wish we could," says Yankee Publicity Man Bob Fishel). However, the clubs are protected if a ball park collapses, gets flooded, burns down or if a spectator breaks a leg chasing a foul.
Athletes who break legs and other as sorted limbs accidentally are equally covered as insurance weaves its web around sports. A professional golfer, for only $350 a year, can collect $500 to $15,000 for hitting a tree root with his club, depending on how hard he hits it and on how long his wrist or hand or arm suffers from the impact. Professional football players are insured against flying tackles just as pro baseball players are insured against flying Coke bottles. Jockeys are insured against broken bones if a Thoroughbred bucks them off, and Thoroughbred owners are insured against accidents to their horses. Among the amateurs, the NCAA offers each member school a policy for its intercollegiate athletes covering everything from a stubbed toe on a baseball field to a fatal crash of the team bus. Skiers are insured against faulty chair lifts, and ski lodges are insured against fallible skiers. Aspen, for example, carries $200,000 for individual liability, with maximum payment by the insurance company of $1 million for any one accident. Nobody can insure against a lack of success in sports, but anyone can insure against not being able to try.
The business of insuring, i.e., setting the odds on, an athlete's survival has brought into the field some bold, new sportsmen. They are not to be found on the sports pages of the newspapers, because they make forward passes with quick smiles instead of footballs, and they only race their Jaguars to the banks. These are the men who sell sports insurance and, like the fine print in their contracts, they are everywhere.
The best place to find them is in that ponderous market for calculated risks known as Lloyd's of London. Since the 17th century, the underwriters who sit in a vast hall known as The Room at Lloyd's have been prepared to provide insurance of every conceivable kind. It was through Lloyd's that Actress Bette Davis insured her waistline, that a department store in Sydney, Australia covered its employees against accidental death caused by a Russian satellite circling the earth, that the odds on a mother giving birth to twins were figured (at 23 to 1) before the fourth month of pregnancy. And, naturally, it was at Lloyd's that nearly all of the peculiar types of sports insurance began.
Most of the underwriters at Lloyd's look like distinguished bankers. They can evaluate the laws of probability and set the rate for every human fear. Said one of the Lloyd's brokers recently, "Underwriting is a sort of controlled gamble where you set the odds on a situation and think you will win. You always walk a tightrope, and the trick is not to slip too often."
One broker at Lloyd's who almost never slips is Peter Nottage, the lanky, austere director of a firm that deals primarily in what are known as contingency risks. "Lloyd's dealings in sport come largely under three headings," explains Nottage. "First, there is coverage for the abandonment of events for any reason, the chief one being the weather. Second, Lloyd's insurance covers disability or death of any sportsman, and third, there is insurance to cover receipts of U.S. theaters handling closed-circuit TV in case there is a breakdown in the broadcast or an inability to pick up the signal." Lloyd's closed-circuit coverage for boxing includes only heavyweight world championships. The promoters of both Patterson-Liston fights took out $1 million against breakdown. As for boxing's other weight divisions, Nottage says, "The underwriters feel that below the heavyweight level the moral hazard in boxing is too great a risk."