Well, I have officially been in the insurance business too long! While most people enter the holiday season excited about time off with family, tasty holiday meals and gifts under the tree, I find myself pondering the question, “What if Santa Claus needed to buy insurance?” Not only that, but what kind of insurance would he need and for that matter would he even qualify?
Right off the bat, Santa’s house and workshop are located in a protection class 10. In general terms, this means there would be no responding fire department in the event of a fire at his dwelling or workshop. While Santa would need property insurance protection, he would find himself limited to high risk property markets that may struggle to establish an accurate value for his home and business property. He also doesn’t need a personal auto policy as his only vehicle – his sleigh – is for business use (this is, however, a commercial auto exposure, which I will address later).
What’s left? Maybe life insurance? I’m pretty sure Santa would have a tough time finding coverage based simply on his age and, not to be rude, he would also be a few pounds over the maximum acceptable weight.
Sounds like he’s going to face some barriers when it comes to personal insurance, but maybe we could help him out with his business insurance. We already know the property policy is going to be a tough one to write for the workshop, but what about general liability? Santa is a toy manufacturer and that’s not an easy class of business to write. His products are used by children, distributed worldwide, and failure of or injuries from his product could be subject to multiple jurisdictional lawsuits. I’m afraid that, with the type of product he is producing and his worldwide distribution, this would also be a tough policy for him to procure.
Santa may also have a need for errors and omissions or professional liability insurance. He claims he knows when you are sleeping and knows when you’re awake. He also claims to know if you’ve been bad or good…so be good for goodness sake! What would happen if Santa arrived when you were awake or, even worse, you had been good but yet your gift was delivered in error to another party currently on the naughty list? Without proper professional liability protection and the Ebenezer Scrooge of attorneys, Santa might find himself in some serious litigation without the proper cost of defense being provided. Now you may be thinking, “Who would take Santa to court?” but may I remind you that this would not be his first time! You may remember he appeared in court to face some identity theft claims that arose while he was working for a department store on 34th street. The charges were later dismissed, but there were still defense costs associated.
Now let’s explore that business auto policy. We have some big problems here! First, Santa uses a custom vehicle mainly for delivery purposes and while it’s only used one day of the year, his delivery radius is huge, he travels many miles, and let’s not forget about those icy conditions. Santa also has some potential loss and MVR issues. The claimant’s grandson insists that Santa was involved in a hit and run when his Grandma got run over by a reindeer while returning home on Christmas Eve. Santa also had a theft claim when it was reported the Grinch attempted to steal Christmas. Then there’s the problem of trying to put a value on his vehicle. All in all, I think a commercial auto policy is out of the question.
Now what he might want to consider is an aviation policy, although he’ll need to go to a specialty market for that. Maybe we could do something to help with his eight reindeer, although I doubt there are any livestock mortality tables for flying reindeer. Perhaps we could try to offer him some kind of equipment breakdown coverage? No, that won’t work – all manufacturing is done by hand not by machine.
This leads me to another tough policy – workers’ compensation. Oh my, where do I begin? Santa’s work force uses older manual tools and would be subject to repetitive motion and other injuries. We also have a potential issue as his entire workforce has a height challenge. Hopefully he is in compliance for that but I’m not familiar with what OSHA or ADA requirements exist in the North Pole. Santa may need to consider an Employer’s Protection Liability policy. Santa has an aging workforce and, let’s face it, with a diet of mostly candy they could have a lot of potential health issues, so I’m pretty sure work comp and group health are going to be tough to get. I guess Santa could look to a disability policy for himself, but treading across icy roof tops and sliding down into confined spaces I’m sure will make even the most warm-hearted underwriter still issue a decline notice.
Well one thing is clear: being Santa’s insurance agent or company would be a difficult task. I guess Christmas is not meant to be underwritten but to be enjoyed in the company of our loved ones. So parents, assure your kids that Santa will be passing through yet another successful year without incident, albeit self-insured, and, in his words, a Merry Christmas to all and to all a good night.