Insuring Santa Claus

As written by Burns & Wilcox- December 19, 2018


From his bustling workshop to his nine loyal reindeer, Santa Claus operates one of the most complex enterprises in the world.

That level of global intricacy requires an expert review of risk management strategies.

“There are a number of insurance products that I would think Santa would have in place,” said Chris Zoidis, Corporate Executive Vice President, Burns & Wilcox. “He has proven to be a pretty smart business person over the last 200 or so years despite his reliance on old holiday traditions and the high costs he likely pays on his heating bills.

“Santa keeps things under wraps so to speak, so it’s anyone’s guess what his and Mrs. Claus’ personal assets even include. Their compound has to be massive, although I heard real estate values have been slumping in the North Pole.”

Here are four areas where Santa should have coverage to protect his empire.

1. Santa’s Bustling Workshop

Published estimates put the number of elves staffing Santa’s workshop at 90,000, a figure that is hard to confirm given the difficulty of traveling to the North Pole to conduct an official census.

As a result, Santa first and foremost needs an Employment Practices Liability policy to protect against discrimination, wrongful termination or other employment-related situations. This policy would protect Santa in case an elf sues for height discrimination or poor work conditions.

Building toys also comes with inherent risks. One toy-making mistake could result in a toy injuring a child, or worse: a non-working toy could result in an unhappy child on Christmas morning.

In recent years, elves have been taking “elvies” with their phones; they also listen to “wrap” and other music while working. As a result of such potential distractions, Product Recall Insurance can help cover the cost of recalling toys at small or massive levels, as well as the cost of toy replacement.

“All it takes is one screw loose – literally not figuratively – or a missing Lego piece,” Zoidis said. “Even the Big Guy isn’t perfect.”

2. Naughty and Nice in the Cloud

Some of the most educated elves in the world run Santa’s sophisticated IT department. Yet like other corporate IT departments, Santa’s group struggles to protect the network against hackers, especially children who want to move their name from the “naughty” to the “nice” list.  

Santa should carry Cyber & Privacy Insurance to provide coverage in case his system is breached. This policy would cover investigative and legal costs if a breach were to occur, Zoidis said.

“Of course some of Santa’s data is stored in the clouds – and I mean literally in the sky where he can access it with his sleigh,” Zoidis said. “Like we would tell any of our clients, it’s best to be prepared for any risk that may occur.”

3. Global Sleigh Ride

While it’s difficult to confirm that Santa uses this GS-900 sleigh that one UK-based company provided him, it is understood that his around-the-world trip puts him in danger of a breakdown. Equipment Breakdown Insurance can help protect Santa against such unforeseen equipment issues, including potential problems with Rudolph’s glowing red nose.

An Auto Liability policy would cover damages caused by turbulent sky conditions and icy roofs, which can make for tricky sleigh landings. While Santa hasn’t reportedly had any accidents on his ride since the mid-1960s, he does use Google Maps on a regular basis and occasionally will text Mrs. Claus updates from the skies. This partnership with Google has allowed the internet giant to create a tracker for Santa that can be viewed each year around the world. (Of course Santa doesn’t text and ride. Rudolph is trained not to leave the ground until Santa is completely hands-free.)

“For any other business, having your owner travel anywhere from 500 to 1,000 miles an hour all night in the sky would be considered a high risk, but Santa’s pristine driving record trumps that,” Zoidis said.

4. The Business of Santa

While Santa and his reindeer have made it through some massive winter storms – the Denver storm in 1982 and the White Christmas snowstorm in south Texas in 2004 – being unable to deliver toys on Christmas Eve is always a threat. Business Interruption and Extra Expense Insurance will cover the cost of toy delivery through an alternate means if unforeseen circumstances arise.

While Santa is delivering presents, there is always the potential that he may deliver the wrong present to the wrong house – or may inadvertently skip delivering presents to a child altogether. In addition, wish lists can be lost or may be forged by a troublesome sibling. Santa and Mrs. Claus should protect personal assets with Errors & Omissions (E&O) Insurance. In general, this type of policy protects professionals when their clients claim they haven’t performed to expectations.  

And while his insurance costs could be astronomical, Santa’s history and reputation likely play a big role in making sure they are affordable since Santa supposedly is well paid, but also pays for many materials and parts out of his own pocket.

“Everyone in our industry wants to make sure that Santa can operate his business affordably,” Zoidis said. “His track record shows his operations come with little risk. It’s an amazing organization he and Mrs. Claus run but I would think they both can sleep better at night knowing they have the right insurance.

“And the day after Christmas, I’m sure they sleep for a long time.”

This information was provided by Burns & Wilcox, North America’s leading wholesale insurance broker and underwriting manager. Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent to review any of your personal or business policies to ensure you have proper protection, whether or not you deliver toys to children around the world or not.

Posted 11:00 AM

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