12 Days of Riskmas: An Insurance Broker’s Story

In giving her Christmas gifts for 12 straight days, a true love inspires his girlfriend to build a whole new life.

It’s a joyful story for the holidays but one that comes with risks.

According to the popular Christmas carol, The Twelve Days Christmas, a true love gives his significant other a total of 364 gifts over the almost two-week period beginning on Christmas Day. These gifts include 12 partridges, 40 golden rings, 30 lords a leaping, 40 cows with maids-a-milking, and, of course, 12 drummers drumming.

While the true love’s generosity is a thing of beauty, so is what happens as a result of his spending spree. The grateful girlfriend is so moved that she decides to not only accept the gift menagerie but also use the gifts to create a new life for herself. This woman, who 12 days earlier was living a quiet life in a modest home, seizes the opportunity presented by her true love’s gifts and transforms herself into a successful entrepreneur.

Although she is busy and has little time now for her true love, she is delighted with the new life she has created from the 12 days of gifts. Very quickly– by some accounts as early as the 13th day of Christmas– she realizes that she must protect her growing enterprise.

Insurance Journal asked global insurance broker Lockton to imagine the success of this woman who made the most of the gifts she was given and assess some of the risk management and insurance needs she now faces as a result of her success.

Lockton 12 Days Christmas

In a special report, Risk Management Issues, 12 Days of Christmas, the Lockton team imagines that the woman, Felicia Navidad, has done quite well for herself. She has property worth about $20 million, revenues of about $8.6 million, 140 employees and a payroll of $4.7 million.

According to the Lockton report, the gifted Navidad has progressed to the point where she is running a farm, complete with an aviary and a cow barn. The farm is open for daily tours. She has also built a performing arts theatre where ladies dance, lords leap, pipers pipe, and drummers drum. Her concession stand sells liquor, including eggnog made with French hen eggs, of course. She has further expanded into manufacturing and distribution, and opened a gift shop selling CDs starring her entertainers.

The account managers at Lockton provide Navidad with an analysis of exposures, coverages and insurance costs.

To help her understand her situation, the Lockton team lays out some claims scenarios she could encounter. A leaping lord takes one too many leaps and falls off the stage. One of the dancers feels she is not being featured as much as the others and files an employment suit. There is a salmonella outbreak with a large batch of eggs, meaning they must all be recalled.

Lockton’s team advises Navidad that in order to protect her success, she requires more than just standard property and general liability insurance coverages. The brokers advise her to consider additional coverages including: livestock mortality, equipment breakdown, product recall, inland marine, spectator liability, liquor liability, workers’ compensation, directors & officers liability, jeweler’s block, a musical instrument floater and more.

The Lockton report includes estimated premiums for each coverage. The bottom line for Navidad is an estimated combined premium for all of her coverages of close to a half million dollars, or $464,670 to be exact.

The special report was written by one chief elf and five elves in training on the Lockton global team. Peggy Henley, CPCU, ARM, a vice president with Lockton, assigned the project to five associate account managers in training: Andrea Cole, Carrie Marsh, Connor Newth, Dan Ellison and Tanner Rapelye.

According to Henley, the account trainees “creatively decided” how to approach the project and brainstormed the possible claims scenarios including a barn fire, a theft of the golden rings, and a theatre-goer who has one too many eggnogs.

“It was a great opportunity to kick around exposures in a fun format,” says Henley. “They are young and creative and made it easy.”

Click here for the entire Lockton report, Risk Management Issues, 12 Days of Christmas, or visit Lockton’s Web site at www.lockton.com.

Insurance Journal is pleased to join with Lockton in publishing this special report. Happy Holidays!

About Lockton

The 3,800 elves at Lockton deliver insurance, benefits and risk management services to more than 15,000 clients around the world. From its founding in 1966 in Kansas City, Missouri, Lockton has grown to become the largest privately-held insurance broker in the world and No. 1 in Insurance Journal’s Top 100.