To an outsider it seems like a simple operation. Not to mentionastonishing. Do no advertising. Orders flood in from around theglobe. Be loved by everyone. And work just one month out of theyear.

But the truth is that Santa Claus's operation is much morecomplicated and not always so jolly. The amount of things that can,and do, go wrong is legion. Few know this but the bearded one hasan insurance program as complex as that of a drug manufacturer.

It wasn't always this way. "Why on Earth would I needinsurance?" Santa would say to the insurance agents constantlymaking pitches to him while their kids were bouncing on his lap."Insurance? Who would sue Santa Clause?" he would ask incredulouslywhile letting out a big belly laugh.

But times change.

In '68 some heathens in Philadelphia booed Santa. And two yearslater someone did the unthinkable and sued Santa. The reindeer camein for a hard landing and damaged a few shingles on a roof. It wasminor. But Santa got dragged into court — mumbling all the wayabout no good deed going unpunished.

After that, Blitzen bit off a kid's finger and the family waspretty frosty. The floodgates were now open. Insurance became oneof Santa's biggest expenses. He stopped delivering gifts to triallawyers' houses.

For the past four decades Santa's insurance has been written byArctic Insurance Group. But despite all of Arctic's promises tobail him out of trouble, it has been quite the opposite. Santa'ssuccess at getting claims paid has resembled that of the Cubs. Andthe reason for this is easy to explain — for the past 33 years,Santa's claims were assigned to the Insurance Grinch.

The Insurance Grinch found just about every way possible todisclaim coverage for just about every claim that Santa presented.His skills were unparalleled. When Santa began to get inundatedwith claims for knocking out Dish Network service with his sleigh,the Insurance Grouch disclaimed coverage on the basis of theaircraft exclusion. Wow! Now that's impressive.

Good news for Santa: The Insurance Grinch recently retired. He'sheaded to Minnesota to enjoy the warmer weather. He bought a housein a neighborhood with lots of kids so he can tell them to get offhis lawn. The Insurance Grinch agreed to give an exclusiveinterview to Coverage Opinions addressing a claims career like noneother.

Coverage Opinions: Thank you Insurance Grinch for takingthe time to discuss your 30-plus year career handling Santa'sclaims. Were the other adjusters jealous that you handled such afascinating and unique account?

Insurance Grinch: Very much so. But not becauseI was handling Santa's claims. Because it meant that I didn't haveto deal with any construction defect claims.

What was your favorite thing about handling Santa'sclaims?

When you put on your Match.com profile for "occupation" that youhandle Santa Claus's insurance claims, it makes a lot of peoplewant to meet you.

What was the most common claim from Santa that youhandled?

That's easy. A kid would ask Santa for something — like an iPad.And he'd wake up on Christmas morning and find a sweater. Then,just as day follows night, in rolled the claim against Santa forbreach of contract and detrimental reliance.

How did you handle these?

Well, there was no "bodily injury," "property damage" or"personal and advertising injury" to trigger commercial generalliability coverage. And several years ago, the North Pole SupremeCourt held that when Santa opens a letter from a youngster, itqualified as the formation of a contract. I know. It's crazy,right. But it's a liberal bench up here. But once the court foundthat an opened letter was a contract, it became easy to disclaimcoverage since the professional liability policy has a breach ofcontract exclusion.

Tell me about that claim where Blitzen bit off a kid'sfinger?

The kid was visiting Santa on a school trip and handing Blitzena carrot. Except the kid was holding it in front of Blitzen's mouthand the pulling it away. Holding it in front of his mouth and thepulling it away. The kid deserved it. I'm pretty sure Blitzen didit on purpose. At least I hope he did.

Was it covered?

No. We had a reindeer exclusion in all of the policies. I know.It seems strange given that the reindeer are such an essential partof Santa's operation. But Santa didn't read the policy. At leastnot until it was too late. And the broker was asleep at the switch.So we were able to get it in. And we have refused to take it out.We're the only insurer in the North Pole. So where else is Santagoing to go?

What was the most expensive claim that youhandled?

One year Santa was in someone's living room, and his toy sackknocked a vase off a table. Turns out it was from the Ming Dynasty.Worth $2 million. The homeowner's insurer paid for it. We were surea subro claim would be made. We kept waiting but it never came in.Word on the street was that the homeowner's carrier was afraid ofthe bad press from suing Santa.

Were there any unique liability issues involvingSanta?

Many years ago, the North Pole Supreme Court held that Santa canbe liable for a defective product under the Restatement of Torts402(A). As you can imagine, this opened Santa up to massiveproducts liability exposure — defective BB guns, Easy Bake Ovensthat start a fire, Parcheesi pieces that get swallowed. He wasnever able to get products coverage after that.

You don't get too many visitors up here. Seems likeSanta's premises exposure was pretty minimal.

True. Not many make their way here. No direct flights. But thatdidn't stop Santa from having premises liability exposure. Santanever shoveled the snow. He blamed a bad back, but I think he wasjust lazy. The mail man would come 10 times a day during the busyseason, and constantly wipe out on ice while walking up Santa'sdriveway. Santa knew it was going to happen. Finally, we saidenough is enough and disclaimed coverage based on no"occurrence."

Were there are claims that involve Coverage B of thecommercial general liability policy?

One in particular. Santa would put a kid on the naughty list.The brat would turn around and sue for defamation. But we weresuccessful in knocking these out of coverage on the basis thatthere was no "publication" of the kid's naughty status. The onlyone who knew was the kid himself when he received the mandatory10-day notice letter from Santa.

What about the elves. Did they ever cause any troublefor Santa?

Look, this was a big operation. At peak time, the elves work 16hour days. What choice did Santa have? Work the elves to death ordisappoint a kid in Cedar Rapids who wanted a fire truck. So ofcourse, there were some wage and hour and overtime disputes. But wehad an exclusion for this. The elves also got hurt fairlyregularly. All the uncovered lawsuits required Santa to cut somecorners on safety. Thankfully we didn't write the comp.

Did Santa ever damage any chimneys? Let's face it, he'snot exactly svelte.

All the time. But that was an easy one to handle. Those claimsfit right into the exclusion for property damage to that particularpart of real property on which you are performing operations.

Any other interesting things about Santa's riskprogram?

We require Santa to be an additional insured on all of the mallSanta's policies. Not surprisingly, Santa sometimes gets broughtinto a suit against a mall Santa who did something stupid. ButSanta didn't police their policies so he was never an additionalinsured. And we had an exclusion for Santa's failure to secureadditional insured rights.

I'm starting to wonder — were any claimscovered?

Of course. Back in '98 we paid a claim. Wait. It might have been'97. A tyke fell off Santa's lap. We looked at everything but justcouldn't find a reason to disclaim. We thought about no"occurrence" since it seemed like faulty work. The kid is supposedto stay on Santa's lap. He fell off. That sure sounded faulty tome. But in the end we settled and wrote a check. The policy had apretty low sub-limit for claims arising out of, based on, inconnection with or related to kids falling off Santa's lap.

Have you been training your successor?

I have. But he still has a long way to go. On my last day in theoffice he got in a claim from a germaphobe family saying that Santasneezed on their son. The kid is seeking medical monitoring for therest of his life. The new adjuster was ready to appoint counsel. Isaid not so fast. Sounds like the pollution exclusion.

What advice did you give to your successor?

I explained to him that the vast majority of the claims come inthe door in January and February. If he's doing his job, he'll havethem all disclaimed by the end of March. After that the key is topretend to be busy for the next nine months.

This article originally appeared on Coverage Opinions.

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