Insurance can sometimes be a wild and wooly business, where the risks range from longhorn cattle on the loose to exploding baseballs, National Underwriter's annual look at the far side of specialty market underwriting revealed. This year's casual survey of unusual risks among readers and other insurance professionals turned up stories that ranged from coverage of taste buds to model aircraft.
Let us begin with the much-ballyhooed baseball explosion–a risk that Prime Insurance, a surplus lines carrier in Chicago, took on a few years back.
The horsehide in question became a target for destruction after it came to symbolize the bad luck of the Chicago Cubs. On Oct. 14, 2003–with the club a few outs away from its first National League pennant since 1945–a fan, Steve Bartman, reached over and deflected a foul pop before leftfielder Moises Alou could make the catch. After that the Cubs let eight runs get by, lost that game and eventually the playoff series.
As a publicity stunt, Harry Caray's Restaurant purchased the ball symbolizing the Cubs' pennant jinx, and arrangements were made for a public spectacle of its destruction on Feb. 26, 2004–but it was not until 24 hours before the event that a broker came looking for coverage.
Looking back, Rick Lindsey, the president and chief executive officer of Prime, chuckled over concerns about the risk.
"Everybody got worried about exploding the ball and the damage it could do," he recalled. Mr. Lindsey did some checking and found that a veteran Hollywood pyrotechnic expert was doing the blast and had prepared for the event with 10 test explosions.
The blast itself, he said, "was more like a sparkler going off than an explosion. It was kind of silly they worried." Mr. Lindsey said his firm covered the event for a half-hour. He did not reveal the price, but noted that "the market was kind of tight at the time."
Mr. Lindsey's company seems to attract all manner of risks that are off the beaten path–or, in one case, the well-trod beach. Among the most unusual he's encountered:
o A longtime client is the world's only underwater hotel–the Jules' Undersea Lodge in Key Largo, Fla.–a facility that was converted from a former naval research laboratory. Guests must scuba dive 21 feet to enter the premises.
o The insurer also provides coverage for Casey Dale, a bungee jumping expert who makes arrangements so daredevils can leap from helicopters into the mouth of a volcano. Mr. Lindsey said Prime would be insuring Mr. Dale when he provides the expertise for a talk show host's planned jump into a crater for his 50th birthday.
o They also cover a British company that makes high-tech explosives used by ski areas to knock loose snow buildup that could cause avalanches.
To underwrite such unconventional items, he said the company gathers as much information as it can, and may require signed release forms. When it needs to, he said the company is not afraid to contest claims, but "the execution is important–we don't take bad cases to court.
He noted that many oddball risks get presented, and when brokers get the steep price, "they just don't happen."
One exposure that occurs regularly at rodeos and other cowboy celebrations in Oklahoma and Texas is a cattle drive along a parade route, consisting of 50 steers belonging to the historic longhorn breed that sport wicked 6-foot-long horns.
Don Matheson, owner and vice president of Figley Salz and Company Inc., in Woodward, Okla., who secured coverage for the drive, said the animals are the property of Wes Sander, who operates Chain Ranch Longhorns LLC in Woodward.
For all their history as a creature of the Wild West, the longhorns are apparently a pretty docile bunch. Mr. Matheson said in all the 10 years he has been involved with their coverage, there have been no stampedes and no losses.
At one point a steer attacked a 1999 Ford van, but the Elks Rodeo event where the herd was appearing elected to pay the claim, Mr. Matheson noted. Liability insurance for the drive is provided by Wellington Specialty Insurance Company in Scottsdale, Ariz., on a per-parade basis. There is a $500 deductible.
John Finnegan, president of the Macomber Farr & Whitten agency in Augusta, Maine, is also involved with insuring the public viewing of animals. "I feel like Dr. Doolittle," he said, describing his involvement with the Maine Livestock Exhibitors.
The event–like a county fair–has creatures of every description, but Mr. Finnegan said there have only been two claims. "One was an escaped goat. A woman went after it and broke her leg," he recalled, citing a horse bite as the other claim.
Mr. Finnegan places the event with American Bankers. He said he has a concern about rabbits, which he has learned can give a mean bite. There have been no claims so far, "but watch out," he warned.
"My specialty is insuring people," said Jonathan Thomas, a divisional underwriter for accident and health at the Canopius Managing Agency, which operates in the Lloyd's market. That explains why a few years ago he briefly took on coverage of a British wine expert's taste buds.
Mr. Thomas said the policy was taken out as part of a promotional effort by a United Kingdom supermarket chain that wanted to hype its ability to sell good wine.
The insured was the concern's wine taster–Angela Mount–whose taste buds were insured for ?10 million ($19.69 million at current exchange rates), which included ?500,000 ($984,000) in standard coverage and ?9.5 million ($18.7 million) "for the loss of her tongue by physical separation," he explained, making sure to point out that "her being decapitated was excluded," along with sword-swallowing accidents.
The risk was minimal, according to Mr. Thomas, who said the firm got a lot of publicity mileage out of those ?10 million taste buds.
Other well-publicized people and body parts Mr. Thomas has covered include former baseball slugger Mark McGwire and his deteriorating ankle. Mr. Thomas said his firm took on the coverage in 1998, when Mr. McGwire hit his record 70 homers for the St. Louis Cardinals after normal sports disability insurers wouldn't take the risk.
Mr. Thomas said he only insured one part of the ankle, noting that Mr. McGwire was required to play with it taped and wear an orthotic insert for his shoe.
Cornerback Kevin Smith had a lower-leg problem when the Dallas Cowboys signed him, with provisions for bonus money if he played beyond a certain number of games, according to Mr. Thomas. He said the football star took out insurance with Canopius against a lower-leg injury preventing him from fulfilling his contract. "He had a really good season," recalled Mr. Thomas.
He also recounted providing coverage related to Princess Diana. At the time, a South African soap company was using a Diana look-alike for an ad campaign, so they had a vested interest in the looks of the royal personage. Mr. Thomas said the company insured against the princess becoming sick or dying.
Joseph Carig, office manager at Andrew G. Gordon Insurance in Norwell, Mass., reported that a client who called to insure an aerial photography business surprised him with what the coverage actually involved. The risk did not sound particularly unique until Mr. Carig learned that the aircraft involved was a model helicopter.
The insured used the model with a camera strapped on to take pictures of homes and other locations for local realtors.
"Not a large account by any means–just one I had not ever come across," Mr. Carig said in an e-mail.
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