Name Insured, Santa Claus.

We Have a Great Opportunity.

With the holidays quickly closing in I have a hard deadline to meet. My client needed his insurance program put together and bound by Thanksgiving. After that he was too busy to discuss insurance.

Named Insured was Santa Claus. I still need to determine the type of entity we need to insure. Is this an LLC, C Corp, or a partnership? If other entities are involved, we need all the details for the correct named insureds.

Property coverage is for a workshop / office / transportation hub at the North Pole. Given the scope of manufacturing described this would be a significant property exposure. There may be a wide range of special hazards and the need for special extinguishing systems.

Given the location at the North Pole we need details on building construction and heating system. High winds may make a roof review important. How accessible is this location? The risk described his primary transportation as a sleigh. Is the fire department available to respond? Construction class, building size and private protection would be important.

Contents coverage will be a challenge to quantify. There seems to a steady buildup of values until late December when the inventory is suddenly depleted. Perhaps a reporting form with a peak season endorsement is needed. Storage arrays and protection will be critical to understand.

Business income is a head scratcher. Santa says he does not sell the goods but gives them away. Somehow there must be an income stream to pay for this. We need to do some serious research to define the incoming revenues to define the business income limit and exposure.

Give the remote location, I expect that a mechanical breakdown policy is needed for heating, power generation and other utilities. The risk has a data center of some sort, so coverage for those equipment exposures is needed.

The general liability is different. Santa maintains that there are few if any visitors to his homebase. He travels extensively and meets his clients in retail settings during the last quarter of the year.

He has a staff that lives on site called the “elves”. The “elves” manufacture the products that Santa distributes. We may have some type of residential habitational exposure to consider. The potential products list looks like an old Sears catalog.

Products liability will be tough to place. The scope of the products is soup to nuts. The target customers are children, so we have a very sympathetic plaintiff. How the “elves” turn out so wide a range of products is unknown. We may have a significant distribution only exposure if Santa gets merchandise from others and simply delivers the goods. How much is delivered or drop shipped is an open question.

Santa will need a good fleet policy to cover his delivery operations. I suspect there are at least eight power units. I could not find “Rudolph” in SAFER, so perhaps a DOT number would help with fleet underwriting. He was very proud of this part of his operation and all delivery operations may be very time compressed. What about driver fatigue and hours of service?

The radius of operation of the deliveries is said to be worldwide. If this is true then, we need an ocean marine policy for the goods in transit overseas. Perhaps an ocean marine throughput policy may be best to package the real property at the North Pole and the goods in transit across the globe.

If there are more delivery outlets than Rudolph, we need to consider transit coverage or verifying that carriers have adequate limits for their motor truck cargo legal liability.

Santa says he delivers the goods and installs some of them. He mentioned something about chimneys, but I must have misunderstood him. All we need is a work at elevation exposure to scare off potential carriers. Depending on the installation work being performed, is an installation floater required?

WC coverage is reported to be needed in all states. We may need to manage the four monopolistic states and getting the remainder covered will require a carrier with a lot of WC reach. I was not clear if the international workforce who delivers is our own staff or subcontractors. If subs, we need to do the employment test to verify that WC does not apply. We should ask for an NCCI EMR worksheet.

Cyber is a big issue for this risk. Santa reports that he maintains a list of all the children and separates them into good and bad categories. This suggests a lot of PII around children and we need to have strong cyber controls. It was not clear of the data is maintained at the North Pole or in a cloud. Would the separation be a source of potential discrimination claims?

I only got bits and pieces of this operation over the open bar at the Chamber luncheon. I am trying to get back in front of the client this week to start gathering data. This could be a big revenue account.

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