Everyone knows Santa to be a great humanitarian and a “jolly old elf,” but he wants to be known for something else: business transparency. So, in our latest client meeting with St. Nick and his senior elf management, they asked us to share all the risks we helped with this year.
1. Cyber: The Glitch That Stole Christmas
Santa had a brand new bag of liabilities due to a breach of the highly sensitive “Naughty List,” as Anti-Christmas hackers known as Scroogeonymous posted the personally identifiable information on a website, threatening to take down all of North Pole Enterprises. Luckily, Santa’s cyber insurance has notified the naughty, and is working with regulators, service providers and elves to assist the affected. Update: The individuals behind Scroogeonymous have been added to next year’s Naughty List.
2. Aerospace: Just Your Typical Flying Reindeer/Sleigh Coverage
With current soft-market conditions we got Santa a reduced premium when he renewed his policy this year. Sleigh coverage remained largely unchanged but we encouraged a review of limit of liability. The rare, high-value power units of the flying reindeer needed to be taken into account when looking at the overall policy value. The extra expense aspects of the policy were a concern for insurers as it is unlikely that a spare flying reindeer (in particular one with a high-powered red nose) could be leased in at short notice, especially not in the holiday season. The third-party liability aspect, however, was of greatest concern: The sheer number of take-offs and landings in a single night, not to mention the challenges of landing reindeer hooves on snowy rooftops. While individual chimney stacks and roof tiles will not be significant, it is the aggregated value of these attritional losses that was a challenge for insurers.
3. Life Science: Santa Sued Over Unapproved Use of Plant Substance
Plaintiff attorneys have filed several mass tort actions resulting from allegations of misuse of mistletoe as a substance to enhance holiday mirth. Attorneys cited several eye-witness accounts of Santa using the substance to kiss plaintiffs’ mommies. The FDA is considering a revised label change warning consumers about the risks of mistletoe off-label use. We will keep you posted as to Santa’s testimony before regulators.
4. K&R: Concerns Beyond the Grinch
In case juveniles from the Naughty list resort to extortion for their toys, Santa secured kidnap and ransom insurance from SCR. This allows Alert:24’s elves to analyse his vulnerability to the myriad man-made and natural threats he will face on Christmas Eve, from spiked cookies to air piracy. Trained in evasive maneuvers and other flying techniques, his team will be tracked for the full 24 hours by the Alert:24 Operations Centre, who stand ready to coordinate the Christmas crisis management plan with the elfin ops centre at North Pole Enterprises.
5. Power: Failing Another Miracle of the Oil, Perhaps Wind?
Maximising energy efficiency is a key element in the drive to cut greenhouse gas emissions, not only for governments and power companies, but also for North Pole Enterprises. Santa must occasionally cast an envious eye at the Jewish festival of Hanukkah, which commemorates the Miracle of the Oil, when one day’s supply of oil miraculously illuminated the Temple in Jerusalem for eight days – providing one of the earliest and most successful recorded examples of energy efficiency. Unable to rely on such divine intervention himself, Santa at least tries to keep his carbon footprint down by using reindeer rather than a jet to get around the world – although sadly this is not without environmental cost.
6. Environment: Ewwwwww Rudolf… Was That You?
Santa’s reindeer are few in number, but extremely active this time of year and, like all livestock, produce notable amounts of manure and global-warming methane gas, which have been known to threaten humans, fish, and ecosystems. The exposures include nitrate pollution to surface waters, fish kills due to nutrients in animal waste (causing algal blooms which use up oxygen in the water available to fish), disease-causing pathogens and fecal coliform that can be 10 to 100 times more concentrated than those found in human waste. We advised Santa to think not only about his potential pollution legal liability but also his carbon “boot”print.
7. Weather: White Christmas Cover
Just as Santa was about to set off with a sleigh stocked with woolly jumpers, hot water bottles, bobble hats, sledges and slippers, a heat wave brought prolonged periods of unseasonably warm weather. Fortunately, ever-resilient Santa had a bespoke weather policy that responded to adverse temperatures, and he was compensated for the cost of replacing his presents with more suitable gifts. The policy responded, even though Santa’s sleigh and all of the unwanted presents were undamaged.
8. Executive Risk: LIST-Rigging Scandal
North Pole regulatory authorities are investigating allegations that elves charged with the preparation of the ‘Nice’ list may have manipulated the system to reduce the number of toys required for the holidays. These allegations follow close on the heels of suggestions that a large number of children have been “banging the close” by acting especially nice in the few weeks leading up to Christmas in order to move further up, what has, until now, been considered the inviolable register of the “Nice.” Willis is confident that insurance may well cover any costs associated with the investigation; however if the elves or children are found guilty of fraud, severe coal penalties are expected.
9. Personal Insurance: Flood Insurance a New Necessity in the North Pole
With global warming threatening to melt the global icecap, Santa wanted to consider flood insurance for his home and workshop. Chilly water could flood the premises and bring toy production to a screeching halt. Quick restoration is a must if Santa expects to deliver magic right on time. (Santa, no more milk and cookies until you purchase that flood policy still on my list – see my annual review for confirmation I’ve been nice for at least the past 12 months.)
10. Elf Benefits: What Happens to Benefits for Part-Time Elves in the Off Season?
Santa was considering dropping his elves’ benefits coverage and letting them get coverage on the U.S. federal exchange to save money. But since they are seasonal rather than full-time employees, Santa was worried they wouldn’t be able to afford the coverage on their elfin pay (or whether they qualified for subsidies). He was also uncomfortable with data security issues if people found out where he really lives. We suggested he investigate the Willis Advantage, Willis’s private health insurance exchange, and he is now very interested in creating an elfin wellness program.
11. Product Recall: In Case There’s a Little Engine that Can’t
A meeting with his risk manager opened Santa’s eyes to the consequences of dropping down chimneys and disappointing children. Despite huge focus on quality control, Santa wanted to eliminate the risk of defective toys and damage to the “Santa” brand. We suggested improved testing and traceability procedures as part of his product recall insurance renewal. Santa emailed his satisfaction “Ho Ho No E&O!”
12. Safety Recommendations for Santa’s Big Night
Finally, we advised Santa that a pre-flight inspection of the sleigh and the reindeer crew is critical because of the amount of travel and the speeds the sleigh will be reaching during the big night. We also suggested close inspection of reindeer harnesses, sleigh skids, reigns, sleigh seating surfaces and seat belts. Santa’s GPS or communication equipment should also be inspected to ensure that they are in good working order. Santa should never use communication devices when the sleigh is in motion, and should only be used when the sleigh is properly parked atop a roof.
And What Does Santa Want for Christmas?
Before we left our meeting, Francis Kean made sure to ask Santa what he wanted for Christmas. Without skipping a beat, Santa replied, “I want a one-stop, no quibble, cradle-to-grave, all risks policy covering the life, health, family, property and future liabilities of every one of my clients–with a special extension for the partridge sitting in my pear tree.”
Our lawyers remind us that Santa may, or may not be, real. Willis disclaims all responsibility arising out of, or related to if you (or your children) should determine that Santa is not real, including, in particular, all claims for emotional distress. Without any admission that Santa is real or not, please note that it may be a criminal offense to take out insurance on fictitious people and non-existent assets (an indicator of fraud and/or money laundering). Willis advises you to seek your own counsel in any business dealings with Santa, elves, snowmen and reindeer with electrified or radioactive noses. Willis wishes you the maximum holiday cheer as allowed by applicable law.
This post was originally published here December 10, 2013.