Contractual Bonus Coverage

Performance-based bonuses are becoming a more common element of compensation packages in college and professional sports. As adoption of performance bonuses has increased, the size of contingent payouts has also grown significantly. At the same time, incentive compensation remains both underutilized and under-optimized in the sports world.

There is a type of insurance product, called Contractual Bonus Coverage, that can be used to simultaneously offset the risk associated with large incentive payments while maximizing available resources.

Game Point Capital provides Contractual Bonus Coverage products. In practice, Contractual Bonus Coverage functions like a standard insurance policy:

  • In exchange for an upfront premium, we assume all liability associated with performance-based compensation covered under the policy agreement.
  • When a bonus payout is triggered, we transfer the full required amount to the policyholder.

But unlike typical insurance, performance bonus coverage pays out in the event of a positive outcome, like winning a Super Bowl, World Series title, or National Championship, or upon achieving an individual milestone like a tennis player winning a Grand Slam or a baseball pitcher reaching the 20-win mark.

Through an arrangement with our strategic partner, all of our policies are underwritten with Lloyd’s of London, the world’s largest specialty insurance market, and other A-or-better rated insurers.

Contractual Bonus Coverage is widely used in Europe, where performance incentives in soccer, tennis, and golf are significant. This type of insurance is gaining popularity in the U.S., especially at the collegiate level where performance-based bonuses have grown rapidly and become increasingly difficult for athletic departments to manage.

Game Point Capital’s Contractual Bonus Coverage is a powerful tool that allows organizations to budget with certainty, align their interests, and optimize their resources.

Ultimately, our offering will:

  • Promote winning by properly aligning incentives across the organizational structure;
  • Optimize budgets by transforming large, variable expenses into manageable fixed costs, allowing them to invest in talent and capital projects that will take them to the next level;
  • Attract talent through enhanced compensation packages.