What risks might the CEO of K. Kringle Manufacturing—Santa Claus—want to insure? Insurance-broker Lockton provides an in-depth look at the exposures and coverages involved with manufacturing and delivering millions of toys for good girls and boys.
Coverages Santa may consider purchasing include exotic animal coverage for his reindeer (a $1 million-limit policy for a premium of $16,000), ocean marine coverage to cover the toys in transit (a $1 billion-limit policy for a premium of $100,000), an employment practices liability policy to cover the potential for discrimination cases from hiring only elves that have certain physical characteristics, such as short stature, pointy ears, etc. (a $1 million-limit policy for a premium of $50,000), and a Lloyd’s policy to insure Santa’s famous beard.
To see Lockton’s full analysis, visit http://www.lockton.com/Resource_/PageResource/MKT/Riskmas%20Poem_2012.pdf
Lockton also leaves us with the following “Riskmas” poem:
“Twas the night before Riskmas,
and throughout Santa’s shop, not an exposure was covered,
from bottom to top.
Though elves worked hard to make toys with great care,
the risk for injury was still always there.
Santa should have been nestled all snug in his bed,
but visions of big losses danced in his head.
He poured himself four fingers of eggnog as his nightcap,
and hoped he could solve his problems after a quick nap.
As he drifted off into a deep slumber,
the potential for claims multiplied in number.
Santa dreamt of the holiday preparations and his beloved sleigh,
and realized that unless coverage was bound, he would have to pay.
Possible equipment breakdown could result in a clatter;
he would need risk management to help solve the matter.
If the naughty and nice list was erased in a computer crash,
the work his elves had done all year would be gone in a flash.
He dreamt about his eight tiny reindeer that were ready to go,
but he knew they were uninsured motorists—a potentially crushing blow.
Santa remembered tall Sam, an elf who was very bright,
but could not get hired to Santa’s staff, due to his height.
Another catastrophe could be a visit from the Grinch,
who had proven the theft of Christmas could be done in a cinch.
He thought of the stockpile of coal,
as a contaminant would surely take its toll.
Father Christmas without facial hair would be quite weird;
he must go to Lloyd’s for coverage of his beard.
Numerous policies might not cover it all;
he would need an umbrella policy to cushion a fall.
When Santa awoke, he was sitting in his chair,
Only to discover the exposures really were there.
The Yuletide lesson to learn as we draw to a close,
Is that risks—ever present—will leave you exposed.
So Santa gave his risk manager permission to bind,
Leaving him fully covered, with great peace of mind.
Then, as he loudly exclaimed, and breathed a sigh of delight,
“Merry Riskmas to all, and to all a good night.”