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Ho ho uh oh! K. Kringle Manufacturing may be under-insured

Every year, an untold number of Florida's families wonders what would happen if a big storm rolled in on Christmas Eve and Santa couldn't make it. Rudolph can only get so far with the shiny nose thing. In hail and sleet and even a major wind storm, Santa could be grounded -- or worse, he could be in an accident along the flyway or on the slippery roof of someone's house.

The question is really about us and what we would do. No one seems to worry about poor Santa, lying by the side of the road, surrounded by injured reindeer and broken toys. Let's hope the poor guy has insurance!

A brokerage firm decided to put together a proposal for Old St. Nick. The brokers looked at the various risks Santa and his workforce face and developed a series of coverage recommendations for K. Kringle Manufacturing. Naturally, they published their findings in a white paper.

Overall, the old guy will need to cover $1.175 billion in exposures. Considering the 14 scenarios worked up by the risk managers, the policy would cost about $1.2 million a year.

Surprisingly, the exercise involves many different types of coverage. For example, damage to toys in transit fell into the "ocean/marine" category; injuries to any of the eight (or nine, including Rudolph) tiny reindeer fell under "exotic animals."

An aviation insurance policy would cover airborne sleigh mishaps. And don't forget that naughty kids get lumps of coal in their stockings - that calls for pollution coverage.

Have we missed anything? We'll continue this in our next post.

Source: Insurance Journal, "Risk Managers Find Santa Exposed, Urge $1 Billion Coverage Plan," Dec. 19, 2011

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