Canadian Underwriter

Insuring jolly old St. Nick

December 23, 2021   by Brooke Smith

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December 24th is an exciting date for many children — along with the young at heart. But for Santa, it’s all work and potentially an insurance nightmare if he doesn’t have proper coverage.

So, if the jolly, red-suited man himself drops by your brokerage this week, ensure he has standard commercial business liability and auto (er, sleigh) insurance policies in place. And consider a few additional essential coverages.

On the nose – What happens if the proboscis of everybody’s favourite reindeer suddenly stops working? (Not ideal for making it through those wintry blasts!) “Do we insure [Rudolph’s nose] for equipment breakdown, or is that sudden and accidental?” said Guida Leyland, director of commercial lines with Bryson Insurance.

One-man show – While Santa’s elves make the toys, he’s the sole delivery guy. “If something happens to him, who’s going to fill his boots?” she said. “Who’s the alternate? Mrs. Claus? The elf supervisor?”

Keyman insurance is a must.

Rich & famous – Santa’s a popular guy. And there may be any number of grinches just waiting for a chance to capture him. Better sign Santa up for a kidnap and ransom policy.

Labour issues – Santa likely has employee benefits for his elves — especially dental given the mountains of candy on hand in toy land. However, in case he has to let a wayward elf go, Leyland said it would be wise to have an employment practices liability policy in place.

Getting online – Of course Santa’s moved with the times. He’s no longer hand-writing out those business-critical lists; he’s a spreadsheet master. But where there’s an Internet connection, there’s potential for a breach.

“Cyber is going to be gigantic for Santa. All those naughty kids hacking into the system, trying to put themselves on the Nice List,” said Leyland. “Not to mention the gigantic file that he keeps — forever — on each child. That’s a huge cyber exposure.”

And you’d better remind Santa to get multi-factor authentication (MFA) in place and ensure his IT department performs regular system backups.

Not-so-small world – Some insurance policies include coverage worldwide. But what if Santa’s sleigh smacks a satellite dish? “Is this going to be considered worldwide,” Leyland asked, “or do you need to go to the next level — that is, anywhere in the universe?”

Insurers may make coverage for “territorial limits” an exclusion, so you’d better speak to Santa about purchasing this coverage in case he drives his sleigh beyond the stratosphere.

Insuring Santa is no easy feat, but if you’re his broker, make sure you do it right. You don’t want to end up on the Naughty List.


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