The Calhoun Shot: A lesson in insurance and risk communication

As NBA finals between Boston and Dallas have come to close, it’s a fitting time to reflect on one of the most remarkable moments in basketball history - The Calhoun Shot. In April 1993, Don Calhoun, a $5-an-hour office supplies salesman, was selected from the crowd during a Chicago Bulls game to take a shot that could make him a millionaire. Calhoun, initially reluctant but encouraged by a Chicago Bulls' marketing representative, made a remarkable 23-metre shot, securing his place in sports history and sparking widespread media attention. However, what followed was a saga that highlights the importance of understanding insurance policies and how a broker can play an imperative role in effectively communicating risk.

A Game Changer - the event and its aftermath

Don Calhoun’s shot, referred to as "The Calhoun Shot" or the "Immaculate Connection," was part of a promotional event offering a million-dollar prize to any fan who could make a long-distance shot. When Calhoun's shot went through the hoop, the stadium erupted in celebration, and he was instantly thrust into the limelight. The media coverage was extensive, and Calhoun became a household name overnight.

However, the excitement was short-lived. The insurance company responsible for the payout, American Hole 'N One Inc., voided Calhoun's prize on the grounds that he had played college basketball, which violated the promotion's amateur-only rule. Despite this, the event sponsors, including Coca-Cola and the Chicago Bulls, stepped in to honour the prize, albeit in a structured settlement of $50,000 per year for 20 years.

On the Rebound - Lessons learned

Although it might not be the first thing it is remembered for, the incident also highlights several key aspects regarding the importance of clear communication in insurance policies:

The devil is in the detail: The disqualification of Calhoun's prize due to his college basketball experience highlights the necessity of understanding the terms and conditions of an insurance policy. It is crucial for policyholders to ensure they understand and are aware of every detail, including eligibility criteria and exclusions.

Leave it to the experts: As Insurance Brokers, it is our role to bridge the gap between insurers and our clients. We are responsible for ensuring that all parties understand the risks involved and the specifics of the coverage. In the Calhoun example, a broker could have clarified the amateur-only rule to both the event organisers and participants, potentially preventing the disqualification.

Be clear and concise: Effective communication is crucial for managing expectations and preventing potential disputes. Insurers must deliver clear, concise, and accessible information about policy terms. Similarly, policyholders must fully understand these terms before entering into any agreement, making the involvement of a broker extremely valuable.

Nothing but Net - the Importance of Accurate Risk Communication

The Calhoun Shot incident highlights the importance of accurate risk communication for several reasons, including:

Mitigating Misunderstandings: Ensuring that terms and conditions are clearly communicated is essential to prevent misunderstandings that can lead to disputes and financial losses. If the rules had been effectively explained to Calhoun and the other participants, the disqualification could have been easily avoided.

Building Trust: Transparent communication establishes a strong foundation of trust among insurers, brokers, and clients. When clients are well-informed and have a clear understanding of the risks and coverage involved, they are more likely to trust their brokers and insurers. This trust not only enhances the client’s confidence in their insurance decisions but also fosters long-term relationships and assists in helping them feel valued and secure, knowing that their needs and concerns are being addressed

Protecting All Parties: Accurate risk communication safeguards all parties involved. For insurers, it means avoiding unforeseen liabilities by ensuring that all terms and conditions are clearly understood and agreed upon. Clients benefit by being able to make well-informed decisions about their coverage, knowing exactly what is and isn’t covered, which helps them manage their expectations and avoid unpleasant surprises. Brokers, in turn, can maintain and even enhance their reputations by ensuring their clients are thoroughly informed.

MVPs - the Broker's role

Insurance brokers are pivotal in the insurance landscape, acting as intermediaries who facilitate clear communication between insurers and clients. Here are key responsibilities of brokers in ensuring effective risk communication:

Educating Clients: Brokers must educate their clients about the specifics of their insurance policies. This includes explaining coverage details, exclusions, and any potential risks associated with the policy.
Policy Review and Analysis: Brokers should conduct thorough reviews of insurance policies to identify any ambiguous terms or potential issues. They should then communicate these findings to their clients, ensuring that there are no surprises down the line.
Advocacy and Support: In the event of a claim or dispute, brokers act as advocates for their clients, ensuring that the insurer fulfils their obligations as per the policy terms. They also provide support and guidance to clients throughout the claims process.

The story of Don Calhoun’s million-dollar shot is more than just a sports anecdote; it is a powerful lesson in the importance of clear and accurate communication in insurance.

The Calhoun Shot serves as a reminder that behind every policy is a promise, and as Brokers, it is our responsibility to ensure that this promise is clearly understood and upheld. As the insurance industry continues to evolve, this story underscores that in the realm of insurance, much like in basketball, preparation, clarity, and communication are key to success.

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The Calhoun Shot: A lesson in insurance and risk communication