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Santa’s enterprise faces serious exposures, each with the potential to wreak holiday havoc. Here’s how Santa can rein in his risk to protect key elements of his operation.

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Insuring Santa: Workshop Insurance

Santa’s workshop may be where the magic happens, but he shouldn’t assume his North Pole operation is immune to mishap.

Insuring Santa: Workers’ Compensation

Every year, Santa’s elves do a knockout job that could leave them nursing a workplace injury instead of a peppermint hot cocoa.

Insuring Santa: Cyber Coverage

Surely Santa has protected his cyber exposure in the event hackers exploit his massive database of names, addresses and routes?

Insuring Santa: Reindeer Coverage

Without his trusty reindeer, Santa would be a decidedly unjolly old elf. If he hasn’t already, he should insure his famous flyers to make sure his annual deliveries go off without a hitch.

Insuring Santa: Ocean Cargo Policy

Santa might think he’s home free when the toys are loaded on his sleigh and the reindeer have completed their pre-flight Christmas Eve checks. He’d be wrong, though. He needs to insure his toys specifically for the time they are in transit.

Insuring Santa: Sleigh Insurance

Even though Santa’s sleigh is magical, it’s still vulnerable to risks from the kind of damage unique to flying, open-air cargo transporters pulled by reindeer.

Workshop Insurance

Santa’s workshop may be where the magic happens, but he shouldn’t assume his North Pole operation is immune to mishap.

With a manufacturing facility like no other, Santa should definitely consider adding a property policy to his insurance wish list. Fortunately, Argo Group is ready to help.

“We might send a loss-control engineer out there to makes sure everything is good,” says Dave Higley, senior vice president and head of E&S Property and Inland Marine at Colony Specialty.

Santa’s policy would cover:

  • The value of the building if damaged or destroyed.
  • A limit on contents and equipment.

Underwriters would consider the four property risk characteristics of construction, occupancy, protection and exposure (COPE), including:

  • The construction of the workshop.
  • The sprinkler system.
  • The findings of a loss-control engineer.
  • Santa’s management practices and loss history.

Santa’s annual premium for a $25 million property policy would be $100,000, Higley says. That assumes, of course, that he isn’t permitting the elves to engage in risky practices, such as welding near a stack of wooden sleds.

Workers’ Compensation

Every year, Santa’s elves do a knockout job that could leave them nursing a workplace injury instead of a peppermint hot cocoa. Argo has evaluated Santa’s workers’ compensation risk and has a gift just for him: three tips to reduce his exposure.

Toy making is serious business. Using saws, climbing ladders and spending months repetitively wrapping millions of presents means even the most careful elf is at risk of a workplace injury, said Thom Rickert, vice president and head of marketing at Trident Public Risk Solutions.

Santa strives for an injury-free workshop, but on-the-job accidents certainly can happen – even at the North Pole.

Trident recommends Santa follow these three steps to minimize his workers’ compensation exposure:

  • Provide robust safety, training, and equipment maintenance and inspection programs.
  • Require elves to use personal protective gear such as gloves and parkas.
  • Rotate jobs on the workshop assembly line to limit repetitive-motion injuries.

Although Santa is proactive about workplace safety, Trident found room for improvement.

  • Following an increase in losses due to burns, the elves are no longer allowed to bake cookies with Mrs. Claus.
  • To reduce the risk of animal bites, only specially trained elves are permitted to work with Santa’s reindeer.

“Comet is especially skittish,” Rickert said.

So what does Santa pay for workers’ compensation insurance? The system he uses to compensate his elves is nonstandard, as is Trident’s calculation of his premium – a jingle-jangling $500,000 a year.

That’s a lot of candy canes.

Cyber Coverage

Surely Santa has protected his cyber exposure in the event hackers exploit his massive database of names, addresses and routes. On the off chance his data is ripe for the swiping, Argo has just what he needs to rest easy as his annual delivery ramps up.

Santa’s operation is just as vulnerable to cyberattacks as any other business. Imagine the possibilities:

  • A massive denial of service attack – Santa is monitoring his virtual private network (VPN) when a surge of thousands of server requests hits.
  • A classic ransomware attack – Hackers lock Santa out of his computer and demand $100,000 in bitcoin.
  • A database scramble – Hackers mess with Santa’s address list, causing him to deliver presents to the wrong addresses – and giving him a headache of global proportions.

Argo Pro’s customizable Cyber Tech PROtectSM would solve Santa’s woes by offering:

  • Specific first- and third-party coverage in the event of a cyberattack.
  • Data Restoration Expenses coverage, which would cover Santa’s bungled gift delivery.
  • Access to cyber risk management and data breach experts to educate Santa on how to both avoid losses and respond to them.

The cost? Santa’s annual premium would be $25,000, assuming he implements firewalls and intrusion detection.

Reindeer Coverage

Without his trusty reindeer, Santa would be a decidedly unjolly old elf. If he hasn’t already, he should insure his famous flyers to make sure his annual deliveries go off without a hitch.

Santa would be smart to make sure his team of uncommonly aerodynamic reindeer is covered should the unthinkable happen.

Argo has options for Santa:

  • Theft – Santa would pay an annual premium of at least $55,000 for a theft extension to an all-risks livestock mortality policy through ArgoGlobal, with no deductible and each of the nine reindeer valued at $100,000, says Jenny Boatman, a senior underwriter, livestock, at ArgoGlobal.
  • Emergency vet care – Because vet bills can soar higher than Blitzen in a blizzard, Santa should think about an emergency life-saving veterinary fees extension that provides a sub-limit in case a reindeer requires emergency life-saving surgery following an accident.

The reindeer must be well cared for, current on vaccinations and deworming, and individually identifiable.

“Shouldn’t be a problem for Rudolph and his red nose,” Boatman says. “The others might have to be microchipped, though.”

Unsurprisingly, exclusions apply.

“Unfortunately, we wouldn’t be able to provide for loss of use of Rudolph’s nose, as this is a standard exclusion for livestock mortality coverage,” Boatman says. “We would recommend that Santa use a satellite navigation system as a backup.”

Ocean Cargo Policy

Santa might think he’s home free when the toys are loaded on his sleigh and the reindeer have completed their pre-flight Christmas Eve checks. He’d be wrong, though. He needs to insure his toys specifically for the time they are in transit.

Here is a fact as cold as the North Pole: Santa’s property policy on his workshop doesn’t cover gifts from the time they are packed in his sleigh until they arrive at their final destination. By taking out an ocean cargo policy, Santa will be protecting the goods his elves worked so hard to make all year long – whether they travel by land, sea or air.

Santa should be strategic in selecting which gifts to include in the policy, though. A cargo policy premium is calculated on the value of the goods covered, so he should insure only the priciest presents in his bag.

“Since the elves made extra stuffed animals, Santa doesn’t need to insure those,” says Steven Shea, senior underwriter for Argo Group. “However, the unicorns and ponies are very expensive, so he’ll want to make sure those are covered.”

With so many gifts to deliver, Santa has to make multiple trips from the North Pole each Christmas Eve. The total value of Santa’s toys is too high for a single insurance company to cover, but Argo would provide $25 million of coverage for each trip Santa makes. If he were to make 20 trips at $125,000 in premium per trip, Santa would pay an annual premium of $2.5 million.

Sleigh Insurance

Even though Santa’s sleigh is magical, it’s still vulnerable to risks from the kind of damage unique to flying, open-air cargo transporters pulled by reindeer. To make sure he maintains his perfect record year after year, Santa needs insurance for his ride.

A working sleigh is non-negotiable in Santa’s line of business.

It turns out Santa has the perfect option to protect it: an inland marine mobile equipment floater, which would cover the sleigh on site while he’s on the ground (or roofs) making deliveries and while he’s flying around the globe on his route. The coverage also would cover repairs and business interruption, which includes getting Santa to his backup ride.

“The sleigh needs to be protected from the perils Santa will encounter such as fire, flood, roofslide and even theft by an evil elf,” says Dave Higley, senior vice president and head of E&S Property and Inland Marine at Argo Group.

Higley estimates the annual premium to be $150,000, but he noted that Santa would need a casualty policy to cover damage to chimneys and other property caused by the sleigh.

And for the 364 days a year Santa isn’t using his sleigh to deliver toys, he could insure it in storage. The policy would require a sleigh inspection (or just detailed photos, given the distance to the North Pole) and specific information on the storage premises, owner access and number of sleighs in storage, says Colony Specialty Senior Underwriter Kerri Irving.

Santa’s minimum annual sleigh storage premium would be $500, although that could increase to $750 if his sleigh is antique or full of fancy gadgets and instrumentation.