former American football linebacker Brian Bosworth will lead to a loss of insurance coverage in the sporting world, according to the head of a Bermuda-based firm which helps to insure superstars such as Michael Jordan and Wayne Gretzky.

"Headline cases such as that involving Bosworth will to a certain extent sort out the men from the boys,'' said Mr. David Ezekiel. "The people who know how to write this business will continue to be in there and will presumably make money out of it.

"But there's also likely to be a reduction of capacity by virtue of the fact that a few companies who are not specialists in this area will probably take fright and leave.'' Premiums will be pushed up, which is bad news for the National Basketball Association and the National Hockey League, whose captive insurance companies are managed by International Advisory Services, of which Mr. Ezekiel is president and managing director.

Stars such as Jordan and Gretzky already cost their teams hundreds of thousands of dollars annually in insurance premiums.

"You're talking about protecting a major guaranteed contract for a player,'' said Mr. Ezekiel. "The nightmare for the owner is that he's going to have a star on a guaranteed contract who suddenly can't play. Apart from the effect of that on a team's performance, the financial fall-out is an enormous loss of earnings.

"One player can influence season ticket sales by as much as 30/40 percent in some cases. As a result, the owners of teams are prepared to pay a fairly hefty known cost to protect themselves from this happening.'' He added: "There's a lot of premium out there but, if you don't know what you're doing as an insurance company and if you don't have the right people administering and overseeing the programme on virtually a day-to-day basis, you're just setting yourself up for some major losses.'' The Bosworth case was watched with considerable worldwide interest across the whole sporting spectrum, particularly basketball, ice hockey and baseball, where the threat of injury is common.

Bosworth, who played for the National Football League's Seattle Seahawks had a brief, brash professional career that ended in 1989 after shoulder problems forced him out of the game.

In the court case, which hinged on whether his injury was degenerative or the result of an on-field accident, the jury went with the latter, deciding that Lloyd's should pay out the full $5.1 million on two permanent total disability policies and $220,000 on a temporary disability policy.

Some sports fans found it hard to believe that anyone was willing to insure Bosworth in the first place, given his history of steroid use and well-publicised shoulder problems. He was said to have been turned down for insurance several times.

"One of the things that the Bosworth case points out is just what a highly-specialised business the sports insurance business is,'' said Mr.

Ezekiel. "There are only a handful of people who know exactly how to write this business.'' IAS has managed the captive insurance interests of the NHL since its incorporation in 1986 and, a year later, took on the NBA, helping to arrange cover for risks such as permanent disability, temporary disability, workers' compensation and general liability.

One of the newer problems facing the sports insurance industry, and the insurance industry in general, for that matter, is that of AIDS. Basketball player Magic Johnson was forced last year to retire prematurely after contracting the illness.

Mr. Ezekiel refused to discuss specific cases involving individual players.

While IAS does all the accounting and policy issuance for the captives and handles the claims payouts, it does not underwrite the risks, which are passed on mostly to the Lloyd's market, or adjust the claims.

Without Lloyd's, which is prepared to cover risks that other insurance markets shy away from, many of today's leading players would have problems finding anyone to insure them.

The real expertise in relation to sports insurance programmes comes from risk management specialists in the United States who advise the league and team owners, monitor the business on a constant basis and adjust the claims, said Mr. Ezekiel.

He said the Bosworth case was unusual in that it involved a relatively young player with several years of playing time ahead of him.

He added: "Problems usually occur with older players who develop injuries in the years leading up to their retirement.'' The captives handle workers' compensation coverage for all staff employed by the NBA and NHL, including all its players.

"We don't get many payouts on the workers' compensation side because players are usually under guaranteed contracts and do not normally need to make these claims,'' he said.

On the disability side, each team gets to choose which players are important enough to insure and which are not. The Pittsburgh Penguins, for example, would have been insured against hockey star Mario Lemieux's temporary absence from the ice due to Hodgkinson's disease.

The captives also handle general liability coverage, which includes any accidents involving spectators which are incurred in connection with a hockey or basketball game.

If a puck flies off the ice, as it regularly does, and smacks someone in the face, the claims adjusters will deal with it. Knowing how to handle these claims is "critical'', said Mr. Ezekiel.

"It is important to get to the claimant early and try to resolve the issue before it becomes a lawsuit,'' he said. "Often there are many alternative ways of resolving matters which are satisfactory to everyone.

"In minor injury cases, a real hockey fan will be more than happy with, say, a hockey stick signed by Gretzky along with a small payment. That way you can nip the whole thing in the bud before it gets out of hand.'' Risk managers often face a difficult task trying to introduce even seemingly minor safety measures in a bid to reduce the number of claims, said Mr.

Ezekiel.

Some years ago there was uproar over an attempt to increase by six inches the height of the transparent barrier running around the circumference of a hockey rink which protects fans from a flying puck.

"All of a sudden you had an almighty fuss among season ticket holders who had seats at a level affected by this,'' he said. "The furore was incredible and, as a result, the height of the glass remained at the same height which it has been at now for some time.'' Mr. Ezekiel said that the risks associated with insuring sports apparently as dangerous as ice hockey were not as great as most people believed.

"Much of what makes captives successful are that they cover risks which are perceived to be high but, properly managed, are not as frightening in the end as one would expect,'' he said.

"This does not apply just to sporting organisations but basically across the board to all coverage areas to which the industry has a knee-jerk reaction, such as insuring certain product liability and medical malpractice risks. The perception of the risk is, in fact, much greater than the actual risk.

"The commercial industry does not adequately recognise this and does not any longer seem to want to take the time to properly underwrite this business or examine what the claims history really is, preferring instead to just say `this business is terrible' and not handle it or simply charge too much for it. Captives fill this void.'' The difference in claims relating to basketball and the more rugged activity of ice hockey was, surprisingly, not that great, he said.

"In fact, the incidence of claims in both these sports is not as high as one would think,'' he added. "Professional sportsmen are, by definition, a fairly tough lot. What in another industry might be classed as a serious injury is regarded in professional sports as merely first aid.'' He added: "We handle one hockey team that defines first aid as anything less than ten stitches.'' AN INSURER'S NIGHTMARE -- AIDS, which cut short the career of Magic Johnson (pictured here at last year's All-Star game), is one of the new problems facing the world of sports insurance.