Boat Insurance

Boat and Watercraft insurance policies protect several kinds of boats and personal watercraft (PWCs). A standard homeowner’s policy may not cover your boat or PWC as they may be too big or too expensive. Therefore you need watercraft insurance for protection.

For example, Progressive will cover boats up to 50 feet long and up to $250, 000 in value, as well as personal watercraft up to 15 feet long and $27, 000 in value.

Watercraft insurance goes beyond what a homeowner’s policy covers. These benefits include Roadside Assistance, which covers towing of your boat for free, as long as your trailer is covered; on-water towing in case you are stranded on the water; uninsured boaters coverage; fuel spillage liability and wreckage removal coverage. You may also want to consider Personal Effects and Fishing Equipment coverages.

Some insurance companies limit where you can go with your watercraft and still be covered, or you are charged extra if you travel. Progressive covers you at no extra charge on all inland lakes, rivers and navigable waterways of the US and Canada including ocean waters within 50 miles from the coast of the US and Canada.

You should be covered in case of an accident that involves injury to another person or damage to someone’s property. Your insurance company will pay for the cost to replace or repair damaged property, as well as medical bills and loss of wages by an injured person, as a result of an accident.

Several coverages can protect you if you are hit by someone who does not have insurance, or is underinsured. You would want to rest assured that you have coverage for medical care you receive as a result of a boating accident and can be used regardless of who is at fault. Another option which is available is comprehensive and collision coverage, whereby you can choose how a claim can be resolved if your boat is ever damaged beyond repair.

Replacement Cost Personal Effects coverage pays for loss of or damage to personal effects while on board an insured boat or while being carried on or off an insured boat. This coverage does not apply to permanent or portable boating equipment. Personal effects include: binoculars, cell phones, coolers, cd players, scuba equipment, cameras, portable radios and clothing.
Allstate Insurance has coverage for your personal effects with the addition of fishing equipment under that coverage.

On-Water Towing and Labour Coverage Service – pays towards towing and labour costs, depending on the amount of coverage chosen. Labour coverage applies when work is performed at the time and place of disablement, while the boat is in the water.

Roadside Assistance coverage, is usually included in many boat insurance policies. It provides towing to the nearest qualified repair facility and covers necessary labour at the time and place of disablement when the tow vehicle or boat trailer is disabled due to any of the following: – mechanical or electrical breakdown, battery failure, insufficient fuel, oil, water or other fluids, flat tyre, lockout, or lost or stolen keys, entrapment in snow, mud, water or sand within 100 feet of the roadway.

Fishing equipment coverage pays for loss or damage to fishing equipment while on board, or while being carried on or off an insured boat. There will be a deductible for each loss and this can vary according to the different insurance companies.

Fuel Spill Liability coverage is included with Bodily Injury/Property Damage Liability Coverage. Fuel Spill Liability covers unintentional oil or fuel spills resulting in bodily injury or property damage for which you are legally responsible because of an accident arising out of ownership, maintenance or use of your insured boat.
Wreckage Removal Coverage is usually included with Comprehensive and Collision coverage and will pay any reasonable costs you incur for any attempted raising, removal or destruction of your insured boat or private watercraft.

Water Sports coverage is usually included with Bodily Injury and Property Damage Liability at no extra cost, for bodily injury or property damage caused by someone towed by the insured watercraft for activities such as waterskiing, knee boarding, wakeboarding or tubing.

Activities usually not included in Water Sports coverage include parasailing, hang gliding, kite skiing or any other activity involving a device designed for flight.

With Coastal Navigation coverage, you are covered when you boat on all inland lakes, rivers and navigable waterways in the United States and Canada, including ocean waters 50 miles or less from each country’s coast.

If you have Comprehensive and Collision Coverage, then your pets that join you on the boat will be covered for injuries arising out of a boat incident, such as crash, theft, fire or flood.

AIG offer a range of yacht loss prevention services to assist the insured to minimise injury and costly damage. For example:
1. Crew background checks which assess crew members who will have access to your vessel, family and valuables.
2. Hurricane Preparedness Reviews: Specialists can review your hurricane preparedness plan and provide recommendations and contacts for service providers in your area.
3. Safe Harbour, Dry Dock and Repair consultations: You can be connected to the best-in-class facilities if you are cruising, out of port or faced with a storm.
4. Yacht Safety Awareness Material: A range of towing tips and safety and security materials will help your family and crew stay well-informed.
5. Safety at Sea Awareness Programs: AIG produces informational sessions to share security, fire and general safety tips as well as advancements in search and rescue technology and equipment.

Cell Phone Insurance

According to Sprint, one out of every three customers will lose or damage their phone within the first year. According to Asurion, this amounts to approximately 60 million cell phones that are lost or damaged every year in the US alone. Perhaps you are spending more money than you are saving when buying cell phone insurance. Many cell phone carriers offer cell phone insurance at a low monthly rate.

Generally if you have a low-cost budget cell phone, you would not be saving by insuring it. With higher priced phones (and especially smartphones) insurance would be more valuable.

Sprint offers an equipment replacement program for $4 per month with a $50 – $100 non-refundable deductible (depending on the device) per approved claim.

AT&T charges $4.99 per month with a $50 – $125 non-refundable deductible per approved claim, and allows two claims per year with a maximum replaced value of $1, 500 per claim.

The charge for insurance from T-Mobile is $5.99 per month with various non-refundable deductibles.

Verizon Wireless charges $5.99 per month with a $39 deductible for basic phones or $7.99 per month with an $89 deductible for more sophisticated phones.

You cannot just contact Asurion to purchase iPhone insurance. Your mobile phone carrier has to offer it under their coverage plan. When you sign up for insurance with your mobile phone company, Asurion is the company who provides the insurance. Unless you accept insurance from your mobile phone carrier at the time of purchase (or shortly thereafter depending on your cellular provider) you will not be able to get coverage through Asurion. If you do accept mobile phone coverage from your provider, you will be paying the insurance premium on your mobile phone bill each month and Asurion will be the company that is covering you.

While your cellular provider probably will not tell you this, there is more than one way to get insurance for your phone. SquareTrade offers iPhone insurance starting at just $99 and allows you to build a plan that best serves your needs. It is always in your best interest to research all of your insurance options. Asurion is only one of your options.

When comparing Asurion iPhone insurance to other insurance options, always look at the deductible that you will have to pay should something go wrong with your phone. For iPhones, Asurion charges a deductible of $199. SquareTrade charges a deductible of $50. The monthly fee that you will pay for Asurion insurance will likely be less than the price you will pay for insurance with SquareTrade.

Unlike SquareTrade, Asurion charge a monthly fee directly through your cellular provider. The price for this coverage is usually between $5 to $12 per month depending on the type of coverage you select and your specific cellular carrier.

To determine whether or not the insurance is worth it you have to do some math. Let us say you have an iPhone 4G. You pay Asurion $8 per month from the time you buy your phone. Eight months later the phone breaks and you have to file a claim to get a refurbished one, not a new one. You are going to have to pay the $199 deductible. When you add the eight months of service you paid for ($64) plus the deductible, you realise you are paying $263 to replace your iPhone with a refurbished one. If you go to eBay, you can see the same phones are being sold for about $500. In this case, the insurance will definitely save you some money

Physicians’ and Surgeons’ Disability Insurance Plans

Preparation is extremely important in the life of a medical professional. Many physicians and surgeons do not enter their respective fields until their early to mid thirties. College years are spent preparing for examinations and the years in residency qualifying to learn how to manage patients. Many young medical professionals experience financial turmoil, accumulating loans and bills as they proceed through years of study. When they begin earning good incomes, most of the time any planning or preparing for disability, loss of income and/or retirement is least likely to be taken into consideration at that stage.

Physicians and Surgeons’ Disability Insurance Plans are designed to ensure that professionals working in the medical field will be able to maintain their standards of living in the event of an injury or illness which results in their inability to work. It is of primary importance that a physician or surgeon’s occupation or medical speciality is properly classified as this classification determines the premium rate. Premiums can vary greatly from one company to another, as different insurance companies may assign a different occupational class to the same occupation.

Some companies feel that if the above-mentioned medical specialists cannot practice their speciality, but decide to work in another capacity earning a similar income, he or she should not be entitled to receive disability benefits. It is wise to purchase a policy which is both Non-Cancellable and Guaranteed Renewable (i. e. contract that cannot be changed and premiums that cannot be raised). (Source:

“Own Occupation” coverage means that you continue to receive monthly income benefits until you are able to perform the specified duties of your speciality. It is not always available to Neurosurgeons, Orthopedic Surgeons, Anesthesiologists, Emergency Medicine Physicians and Thoracic Surgeons. Some companies feel that if the above-mentioned medical specialists cannot practice the specialty for which they were trained, but decide to work in another capacity earning a similar income, he or she should not be entitled to receive disability benefits.

“Loss of earnings” policy has become more common place in the industry today. It typically pays benefits if you are “unable to perform the substantial and material duties of your occupation and you are not working”. Unless your policy contains a residual disability rider, no benefits would be paid if you choose to work in another occupation or medical speciality.

Residual disability means that you are at work and not totally disabled under the terms of your policy, but due to sickness or injury, your loss of income is at least 20 percent of your prior income. This rider also states that if your loss of income were more than 75 percent of your prior earnings, the insurance company would regard your loss to be 100 percent and future benefits would be paid.

Residual disability:  Examples of information that may be required to obtain Residual disability could be tax returns for the past 5 years, monthly profit and loss statements for the past 3 years and perhaps even bank account statements. Basically, aside from all the details asked, if you were working 50 percent of the time that you used to work and you are making 50 percent of your pre-disability earnings, then you would receive 50 percent of your benefit because you had a 50 percent loss of income. In simple terms, Residual Disability Benefits typically begin when the insured is able to return to their regular occupation in a limited capacity but have incurred a loss of earnings of at least 20 percent.

Partial Disability benefits are paid to the insured person who experienced a loss of time or duties due to a partial disability. The person will be eligible for a flat percentage of their monthly benefit which typically works out to a maximum of 50 percent.  What if he/she no longer performs surgery? What if he/she had eyesight that started to fade or was confined to a wheelchair?

A disability is simply defined as an illness or injury that interferes with your ability to work. You want to have a contract that can never be changed or premiums that can never be increased. The definition of a good contract will read: if you cannot perform the material duties of your speciality, benefits will be paid.

With good disability insurance contracts if you could not perform your speciality because of an injury or illness and you engaged in any other occupation you would still receive your monthly benefit. Even if you were making a higher income in your new occupation, you would still receive your monthly disability benefit. Most good disability contracts will have extra policy riders you can purchase. Riders that would allow you to increase your coverage later in life regardless of your health. A residual rider that would pay benefits in the most realistic claim scenario of being partially disabled but still working in your own occupation. A cost of living rider ensures that if you were to go on to claim, your benefit would increase every year to keep pace with inflation. Insurance companies know from claims statistics that most claims involve partial disability where individuals are still working in their own occupation or in another occupation.

International Travel Insurance

International Travel insurance is insurance intended to cover medical expenses, financial default (i. e. failure to meet the legal obligations) of travel suppliers as well as other losses incurred while travelling either within one’s own country or international.
Whether your trip is for business or pleasure, domestic or abroad, adequate medical emergency evacuation coverage is important should you experience illness or injury during your travels.

Natural disasters. Building evacuation due to fire or smoke. Political unrest. Every day thousands of travelers across the globe risk being subject to unforeseen events of all kinds. What happens next is the bigger issue.

Emergency evacuations are not uncommon – especially these days. Whether you call the United States home or reside in another country, it’s not enough to have basic insurance coverage. Emergency evacuation is a foreign country could involve much more than hospitalisation. In fact, it is likely in such an event it will involve a number of other expenses surrounding your emergency evacuation, which could threaten your financial stability.

Traditional insurance carriers are hard-pressed to provide you with adequate emergency evacuation coverage due to high risks and exposures you face in a situation requiring emergency evacuation. Moreover, most carriers do not cover medically related expenses in such emergency situations.

Temporary travel insurance can usually be arranged at the time of booking of a trip to cover exactly the duration of that trip, or a ‘multi-trip’ policy that can cover an unlimited number of trips within a set time frame. Coverage varies and can be purchased to include higher risk items such as ‘winter sports’.

The most common risks that are covered by travel insurance plans are:
1. Medical emergency (accident or sickness)
2. Emergency evacuation
3. Repatriation of remains
4. Return of a minor
5. Trip cancellation
6. Trip interruption
7. Visitor health insurance
8. Accidental death, injury or disablement benefit
9. Overseas funeral expenses
10. Lost, stolen or damaged baggage, personal effects or travel documents
11. Delayed baggage (and emergency replacement of essential items)
12. Flight connection was missed due to airline schedule
13. Travel delays due to weather
14. Hijacking

Medical expenses coverage can be Per Occurence or Maximum Limits

Some travel policies will also provide for additional costs, although these vary widely between providers.

In addition, often separate insurance can be purchased for specific costs such as:
1. Pre-existing conditions (e.g. asthma, diabetes)
2. Sports with an element of risk (e. g. skiing, scuba diving)
3. Travel to high risk countries (e.g. due to war, natural disasters of acts of terrorism)
4. Additional Accidental Death and Dismemberment Insurance
5. 3rd Party supplier insolvency (e.g. the hotel or airline to which you made non-refundable pre-payments has gone into administration.
6. Acute on-set of pre-existing conditions – this term is very different from Pre-existing conditions. It means a sudden and unexpected occurence of pre-existing medical conditions without any prior warning from a medical professional.

Travel insurance companies, especially in the USA, do not offer coverage for pre-existing coverage but they do offer coverage for acute on-set of pre-existing conditions. If you have pre-existing conditions, make sure you get this coverage to protect yourself against any emergency situation that arises due to pre-existing conditions in spite of taking care.

Common Exclusions

1. Pre-exiting medical conditions but a lot of companie now cover for “acute on-set of pre-existing conditions”
2. War or terrorism – but some plans may cover this risk, and some do cover for acts of terrorism.
3. Injury or illness caused by alcohol or drug use.

Usually, the insurers cover pregnancy related expenses, if the travel occurs within the first trimester. After that insurance coverage varies from insurer to insurer.

All Aboard Benefits can provide you with the coverage you need, helping you manage the complications and costs of medical and travel emergencies that may occur during your trip and help you to avoid a future loss of income.

The Emergency Medical Evacuation Insurance Program covers the wide variety of risks and exposures that can occur during your trip. They will provide you with emergency medical coverage of medically related expenses, should you experience illness or injury during your travels.

Coverage options include:

Emergency evacuation, including that for individuals with pre-existing medical conditions
Air ambulance rescue
Transport of dependent children back home
Hospital visit from spouse or other loved one
Repatriation of remains
Accidental death and dismemberment
Security evacuation (including natural disaster coverage)
Optional adventure sports coverage
Optional baggage coverage

The program also includes the following 24-hour emergency travel assistance options:

Arrangements for last-minute flight changes
Hotel and reservations arrangements
Lost luggage
Medical referrals
Replacement of lost prescriptions
Emergency cash transfers
E-mail and phone messaging to family and friends
Pre-trip health, safety and weather advisories
Airport transportation
Personal security assistance
Identity theft assistance

Group Travel Medical Insurance

Also available is a dependable and cost-effective international group medical insurance plan for international travelers and persons living or working abroad.


Large or Small Groups and Organizations:

Vacation tour groups, missionary or church groups, students and corporate groups.

Corporate Health Insurance for Employers:

Employers who need International Insurance Coverage: a policy can be issued if you have 5 or more non-citizen employees who do not qualify for the company’s existing health plan, if one already exists. Criteria is that the employees are living and working outside of their home country. Spouses and dependent children under the age of 18 can also enroll. Custom benefits can be designed according to your requests.

Standard US major medical benefits include inpatient and outpatient services and prescription drugs. International plans include emergency medical evacuation, repatriation of remains, medical provider referral and multilingual customer service.

Trip Cancellation Worldwide:

International Trip Cancellation insurance plans provide trip cost reimbursement benefits that help ensure you’re prepared in the event of an accident, illness or loss when travelling. These worldwide travel cancellation insurance plans also provide reimbursement if your international cruise or trip is interrupted or cancelled as a result of tour operator or travel supplier default, weather that causes complete cessation of services, or a number of other events that may cause interruption or cancellation of your business trip or prepaid vacation.

The Risks of Movie-making


The risks of movie-making make it a high risk industry and insurance has to be considered in order to protect the movie-making company and investors.

Bruce Lee’s son, Brandon, was fatally shot by a prop revolver while shooting a scene for The Crow that called for the firing of a blank towards the 28 year old actor.  A bullet had inadvertently been lodged into the barrel due to careless procedures by those working on the set and this resulted in a gunshot that took Lee’s life despite emergency surgery in a hospital in North Carolina.  Brandon Lee’s mother filed a suit against the Edward R. Pressman Film Corp.

The post-apocalyptic film – Water World, that imagined a world without land after the polar ice caps melted was reportedly the most expensive movie ever made upon its release ($175 million).   A large cause of the cost overruns came when a hurricane destroyed a multi-million dollar set off the coast of Hawaii. The Kevin Reynolds-directed and Kevin Costner- starring “Mad Max on water” adventure picture was tagged as a flop before it even opened.  The film had bad press concerning cost overruns due to the difficulties of filming on water as well as behind the scenes squabbling between Reynolds and Costner.

George Camilieri, a bodybuilder and extra, broke his leg during the filming of Troy.  He was operated on the following day but died two weeks later of a heart attack related to a blood clot. Ironically, Brad Pitt, who played Achilles in the blockbuster version of the Homer’s Illiad, also tore his left Achilles tendon during production. About three-quarters of the way through the film, Pitt’s Achilles faces Hector, played by Eric Bana and kills him.  While performing a difficult jumping strike against Bana, Pitt landed awkwardly and injured his Achilles tendon.

Insurance coverage is already in place when a film production is launched.  There are a number of speciality insurance brokers within the industry whose sole purpose is to protect a film or TV show’s production costs while shooting.  This insurance also covers risks associated with cast insurance (i. e. injury, death and abandonment).  Case in point:  Halle Berry broke her foot while on location in Spain filming Cloud Atlas, which pushed back shooting two-and-a- half weeks to allow the actresses foot to heal. Production did however continue by filming around her injury – either in closely cropped shorts or using stunt doubles.

Along with the injuries to the cast, the insurance also covers delays caused by fire, theft, damaged film and other setbacks, and it typically totals between 0.8% – 1.5% of the film’s entire budget.  This number can fluctuate, however, based on such factors as where the film is being shot or an actor’s health.  “Traditional insurance can cover almost anything that impairs the ability to make a film” said Konrad Dowling, managing director of Arthur J. Gallagher Entertainment Services in Glendale California.  The Gallagher Entertainment consultants have brokered the insurance for 90% of the American Film Institute’s Top 100 films.  They have been involved in many high-profile claims including Hurricane Katrina and September 11, 2001 production claims as well as serious cast losses.

Production Coverage Protection

Props, sets and wardrobes

Extra expense

Third party property damage liability

Miscellaneous equipment

Negative film

Faulty stock, camera and processing


Office contents

Money and currency

Animal mortality

Civil authority

Difference in conditions

General and automobile liability

Foreign general and automobile liability

Excess liability

Errors and omissions

Aircraft liability

Dowling’s firm insured, in one capacity or another, two-thirds of the films that were nominated at this year’s Academy Awards.  As successful as Gallagher and the handful of other insurance brokers that operate in this arena are, there are some risks that cannot be underwritten by traditional carriers.  There are specialised underwriters that are able to take an added risk.

An actor wanting to pilot his own aircraft during production of a film would qualify as something left to speciality insurance, and the cost of coverage can vary depending on how many times the star intended to fly the aircraft during filming and where he is flying.

There is no shortage of actors whose penchant for party life has the potential to put a film in jeopardy.  Drugs and alcohol are not the only personal risks that require extra coverage.  Sometimes factors beyond anyone’s control arise.  People get sick.  Lori Shaw, an entertainment insurance advisor with Aon remembers, “We were involved with a TV production that was about to be launched when their anchor star was diagnosed with a life-threatening medical condition”.  The insurance carrier covering the cast was not willing to take on the medical risk, which would have shut down the series before the first episode was filmed.  Fortunately Aon was able to help solve the problem.

Everyone complains about the weather, but no one does anything about it.  In Hollywood, the insurance industry tries, but there is only so much that one can do.  You can avoid the Philippines during monsoon season.  In Florida, a time other than the hurricane season can be chosen.  However, even with forethought, circumstances do not always work out favourably.

Last Fall, Hurricane Sandy wreaked havoc during the filming of Noah, as floodwaters threatened the sets.  The exterior sets for Noah, including the 450 foot long ark were constructed directly in the storm’s path in Oyster Bay on Long Island Sound;  the damage to the area made it impossible to fully assess the costs.  The $115 million film was fortunately covered by insurance.    High profile film events, including the gala premiere in Lincoln Square of the Keira Knightley film

Anna Karenina were cancelled.  TV shows affected included:  Law & Order:  Special Victims Unit, 30 Rock, 666 Park and Gossip Girl.  Taping of live shows, such as Late Night with David Letterman had to go ahead without an audience.

No matter the perils, traditional insurance brokers do an exceptional job protecting film and television productions.  It would be impossible to list just how many times that coverage has prevented studios from hemorrhaging fortunes after disaster strikes.  Occasionally something arises that is outside the purview of the traditional brokers, and the speciality carriers fill the gap.  If not for them, many films would never have seen the light of day.

Bicycle Insurance in South Africa

Most insurance companies require you to insure your bike as part of your household insurance. Other companies offer all-risk cover, but then you are not covered for competition and training with your bike. There are insurance companies who provide policies, which are cyclist and bike specific. They offer stand-alone cover for your bike when you are travelling, riding, hijacked or if your bike is stolen.


One of the first companies in South Africa to offer and to cover in competition was Cyclesure. The company was started 10 years ago after the founder, Fred Henning realised that cyclists did not have proper cover. He decided to make the difference by offering cyclists stand-alone cover on their bikes and components, whether you are competing, training or commuting. They also provide quick claim resolution and Henning says that 95% of all their claims are resolved within 24 hours of receiving relevant documentation.


In 2008 Momentum started offering bike insurance. They decided to get involved in bicycle insurance as they saw a gap in the market. The majority of short-term insurers do not provide stand-alone cover for bicycles; the norm in the industry is that household contents need to be insured as well. There are also companies in the market that exclude accidental damage while training or racing, so they decided to create a policy which is attractive to cyclists.

Miway and Outsurance

Others who offer bike insurance include Miway and Outsurance. Both of these offer similar cover to the abovementioned companies, however they do specify cover in the event of fire damage.


They offer:
Complete Protection
Worldwide coverage
Stand-alone cover
Additional benefits
Personal Accident cover worth R25, 000
Automatic personal legal liability up to 5 million

You are protected against:
All Risk
Loss or damage
Damage during transit, training or participating.


They offer:
Worldwide coverage
Stand alone cover
Additional benefits
Personal Accident Cover
You are protected against:
Accidental damage
Damage during training, transit or participating.


They offer:
Standalone cover
International coverage
Additional benefits
Personal legal liability for 1 million rand
Personal accident cover for R10, 000 (applies to official rides only)
Medical expenses up to R5, 000 for any accident (applies to official rides only)
Cover for bicycle hire

You are protected against:
All Risk
Damage during transit, training or participating


They offer:
Worldwide cover
Stand alone cover
Additional Benefits (optional)
Personal Accident cover worth R25, 000 (covers death, permanent or temporary disability)
Personal legal liability worth R5 million (if you insure your household contents with Momentum as well)

You are protected against:
Loss or damage during transit and training
All risk while participating in an event (no limit)

The four leading bicycling insurance companies quoted to insure an average R10, 000 bike:


Premium – R73.76 (including the Personal Accident, Medical expenses and R1, 000, 000 liability cover)

Basic – 5% of claim minimum R250.00
Theft and hijack – 10% of claim
All wheel claims – 10% of claim


Premium – R70.00 (depending on the underwriting information)

Excess – R400.00


Because they individually write each risk (client) premiums and excesses vary from one person to the next, regardless of the cost of the bike.

The information used to calculate the risk:
1. Client’s ITC profile (i. e. credit score)
2. Current insurance history
3. Area the client lives in
4. Previous incidents and cancellations
5. Type of bicycle i. e. mountain vs road bike
6. Value of the bicycle

This is the possible cost of cover with Momentum, based on a fiction client.

Premium – R123
R103 (single speed)
R98 (racing)

Excess – R460 (can negotiate a lower excess at additional cost)


Premium – between R250 – R490 +

Excess – R490

Insuring Fine Art

Art Insurance is a slot market with distinctive rules. Insuring fine art is of paramount importance. Transport is the biggest risk and can be reduced by expertly packing and shipping sculptures or paintings. Insurance losses are rare, but expensive, when an insurance policy is to reimburse via opinions of their current market value rather that at a pre-arranged value. The value of works of art have headed up over the past decade. Two paintings by Turner were stolen in 1994 when on loan to Germany. The claim made to Hiscox, a British Museum was for $37 million.

At present, art insurance tends to follow general trends in P & C. (Personal and Commercial). In particular, says Charles Dupplin at Hiscox, the rates for transits between museums are going up. Transporting works of art across countries and continents is still a risky undertaking. Standards of safety and care vary considerably, say, between America and the former
soviet Block.

The two paintings Shade and Darkness – the Evening of the Deluge and Light and Colour (Goethe’s Theory) – The Morning after the Deluge – Moses writing the Book of Genesis are two of Turner’s most significant works. Shades and Darkness was recovered on 19th July 2000 but no announcement was made for fear it might jeopardize the recovery of the second painting. Light and Colour was recovered on 16th December 2002.

The Mona Lisa was stolen from The Louvre on 21st August, 1911. The Louvre closed for an entire week to aid in the investigation of the theft. It was recovered in 1913 after the thief Vincenzo Peruggia attempted to sell it. Currently The Mona Lisa is estimated to be worth $743, 000, 000 although art critics say it is priceless.
The Boy in Red Vest by Paul Cezanne was stolen from Foundation E. G. Buhrle in Zurich valued at $91, 000, 000 and recovered in Serbia on 12th April, 2012. These are only some of the famous paintings stolen over the years.

If you own fine art, and want to insure the collection, the first task is to create detailed records of your art collection. The name of the artist, title, date that the work was created, the medium used (oils, acrylics etc), its size and general condition. Keeping original receipts for art works purchased is also prudent. Taking photographs is advisable, which should be kept in a safe place.

Certain insurance companies that specialise in fine art insurance may send a specialist to evaluate the collection and at the same time give advice on the protection of the various pieces from light, fire and water spoilage. Any fading or cracking that may be caused by artificial light or natural light will not be covered in this policy. It is necessary to take extra precautions if you live in an area which is susceptible to hurricanes and earthquakes. Wall-hanging devices such as special earthquake hooks should be used to secure the art on walls. Three dimensional works of art like big sculptures should be attached to the floor by means of a heavy base and the use of museum wax will ensure that lighter sculptures will not topple over should you have an incident such as an earthquake or hurricane.

Several years ago, “The Scream” and “Madonna”, two major paintings by Norwegian artist Edvard Munch were stolen from the Munch Museum in broad daylight. An interesting fact that is that Munch had created four versions of “The Scream”.  The one that was stolen was created in 1910 – with tempura on board.  It shows water damage in a lower corner suffered during the ordeal although some art historians view that intrigue as an asset.  The other three versions were two in 1893 and one in pastel in 1895. A Rembrandt and a Vermeer, amongst others, worth approximately $300 million were stolen from a museum in Boston in 1990. In both instances, the art was not insured against theft, although they were insured for fire and water damage as well as reparation costs that may be incurred if the pieces were damaged. John Oyaas, managing director of the Munch Museum said that the Munch paintings were irreplaceable. So what is implied here is that there are paintings that are so valuable, they are not worth insuring. This does not make sense as some insurance is better than no insurance at all. 

The issue is getting compensated in some way if the art is stolen. The cost of insuring an entire collection at a museum may well be prohibitive, however, thieves only steal parts of the collection. If you purchase theft insurance, you are insured for the coverage amount no matter what gets stolen.

One could pay for as much insurance as one can afford. That way, if the art gets stolen, there will at least be some funds to hire top private detectives to try and recover the stolen art, or enough to even pay a ransom amount.
Alternatively, the funds obtained could be used for a state-of-the-art security system which would be a deterrent to future art thieves.

Make sure you understand your insurance policy. Read the fine print and ask every question about every conceivable loss or damage situation that comes to mind. Theft/damage insurance for art added to a homeowner’s policy generally costs $1 – $2 per $1000 of coverage and less if you have a good security system in place. Several insurance companies specialise in covering art and antiques exclusively.

However, additional fine art insurance may cover fire, accidental breakage and loss from severe weather. You may need a separate flood policy to be protected in the event of flooding. Fine art policies can also include transportation coverage. This can be especially beneficial because a significant 5 – 10 percent of art collection claims are as a result of damage or loss to the pieces during transit.

Construction Insurance

Every single building project should have construction insurance. These insurances can provide coverage for material risks, natural disasters and employees. Some of the most common insurances in the construction industry are:

Liability Insurance: This insurance will protect home builders, contractors and remodellers against accidents, injuries or property damage suffered on the job. Workers can accidentally damage a property by mishandling tools and materials or while the remodelling process is under way.

Common business practice requires you to provide evidence of construction liability insurance before repairing or remodelling homes. Sub-contractors are also required to present their evidence before entering or starting a construction job. Having good construction liability insurance protects builders from lawsuits or when they suffer losses from unexpected conditions.

Sometimes homeowners may want to sue contractors for damage during the construction process. Perhaps a worker is injured and may want to file litigation against the homeowner or contractor. Your contract with the sub-contractor, as a homeowner, should insist that the subcontractor has his own liability insurance, so that you, as the homeowner are exempt from any responsibility arising from damage caused during the construction process. It is recommended that the insurance coverage is two to three times the amount of the construction budget.

Construction liability insurance has also its limitations. You must set limits per each occurrence and limits for accumulated values. Limitations are also set for fire damage to property under construction as well as medical expenses for injured workers on the job that might not be covered under workers’ compensation. Covered damages also include liability for personal and advertising injury, that is litigation produced from claims that the contractor’s promotional advertising in some way caused the homeowner or other interested party to incur a financial or personal loss.

Many options are available under construction insurance. They depend on the policy’s provisions, including the causes of loss or perils being insured against. While they should be studied before the construction contract is drawn, they seldom are. The Builder’s risk policy is often purchased after the contract has been signed and without regard to what it specifies or what the exposures of the construction projects are. As a result, coverage problems can arise – to the detriment of most parties, including the insurance representative.

Construction insurance will provide coverage for damage done to the insured structure from a wide variety of events. Damage from the following events will be covered by most policies:

  • Fire
  • Wind (may be limited in coastal areas)
  • Theft
  • Lightning

Limited coverage is provided for collapse. Standard exclusions are:

  • Earthquake
  • Employees theft
  • Water damage
  • Weather damage to property in the open.
  • War
  • Government action
  • Contract penalty
  • Voluntary parting
  • Mechanical breakdown

An important exclusion which should be read in its entirety excludes coverage for damage resulting from faulty design, planning, workmanship and materials.
Extension of coverage may be provided for certain situations. The coverage for these may be limited.
Common builder’s risk insurance coverage extensions include

Property in transit
A coverage extension to protect property from loss while being transported to the jobsite.


Coverage is extended to apply to scaffolding, construction forms and temporary structures, but only while they are at a location you have reported.

Property in Temporary Transit

Property that will be used or installed in the secured location and pertaining to the insured company.

Fire department service charge

When the fire department is called to save or protect covered property from a covered cause of loss.

Debris removal

The builder’s risk insurance policy will pay your expenses to remove debris of covered property. This debris must result from a loss that is covered under this form.

Sewer and Drain Backup

Water damage from the back-up of sewers and drains is usually covered.

Valuable Papers

(site plans, blueprints, etc.)

Additional Information you should know

The insurance will not cover the property of others.
Sub-contractors are required to have their own insurance.
There is no coverage for tools or equipment
No coverage for liability.
It does not cover accidents on the job site.
Usually coverage ends when the building is completed, or occupation is taken.
The premium for the annual policy is fully earned.

Linked to construction insurance is the necessity for a construction contract, which is an agreement that sets a date and specifies which parties are going to participate in the construction process.  Usually the contract agreement is formed between the Owner of the project and the contractor or supplier that is providing the requested services.  It includes

  • Project description
  • Contract price
  • Payment basis
  • Construction schedule
  • Contract document list
  • Contraction scopes
  • Construction conditions and responsibilities
  • Contract law

However, contract agreements must: –

  • Be in writing
  • Be understood and clear between both parties
  • Include services being contracted clearly
  • Include cancellation or termination clauses


Bicycle Insurance UK

When purchasing insurance cover for your bicycle, it may be advisable to consider using a company that has developed their policy conditions in conjunction with cyclists and people with experience in the cycle industry. There are different levels of cover to suit a wide variety of cyclists. You may only need cover which is geared for a bicycle that is used to commute or for recreational purposes. If you need insurance cover for racing or competition, that could be arranged by means of an optional extension to your policy.

Cycleguard, is an example of a company that specializes in bicycle insurance in the United Kingdom (UK).

  •  Their cover against theft and accidental damage is up to £10, 000.
  •  A bike which is less than three years old will be replaced on a new for old basis, however bikes older that three years old will be subject to depreciation.
  •  Whilst bikes are being repaired Cycleguard will arrange bicycle hire for you until you get your bike returned to you.
  •  Your cover may be extended to other areas for a certain period of time, for example:-

UK only
EU for 90 days (30 day maximum trip)
Worldwide (45 day maximum trip)

Your optional extensions are: –

  •  Public liability and accident cover
  •  Racing or competition use
  •  Roadside recovery
  •  Family members option


  •  If your bike is left outside of the specified insured location, and stolen, a claim will not be approved.
  •  Theft at home or the insured location unless there is forcible and violent entry.
  •  If your bike is in a communal area and not locked with an approved lock and attached to an immoveable object.


  •  If you have stopped off somewhere and your bike is stolen as it was not locked to an immoveable object.
  •  If your bike is stolen and you did not use an approved lock (a list of approved locks can be found on Cycleguard’s website)
  •  A bike stolen which was left unattended anywhere for more than 18 hours.


  •  If you have any cosmetic damage which does not impair the performance of your bike.
  •  When in transit, the bike should be securely packaged as failure to take this precaution will cause a damage claim to be rejected.
  • Should you loan or hire out your bike to any other person, damage caused to the bicycle will not be approved.
  •  Mechanical or electrical failure of your bike is not covered.
  •  Any faulty or defective design which results in damage will be rejected.
  •  Unless you have purchased active cover for racing or competition, a claim for damage to your bike will not be approved.
  •  Should you use the bike for hire or reward, it will not be insured for damage, theft or vandalism.

Cycleguard’s EXCESS conditions: –

  •  If you took out your bike insurance on or after 2nd January 2013, there is an excess amount of £25 on each and every claim.
  • The first £100 or 20% whichever is the greater will be charged for bikes stored in wooden sheds, communal hallways and communal outbuildings.
  •  Public liability claims are subject to a £500 excess for third party property damage.


  •  Cycle insurance from the ETA includes cover for race events such as triathlon, time trials, downhill mountain biking, sportifs and other competitive cycling both in the UK and abroad. NO ADDITIONAL COST is made for race cover, but certain exclusions apply.
  •  When taking part in a cycle race or triathlon, your bicycle is covered against theft, accidental damage and vandalism, but NOT THIRD PARTY COVER, PERSONAL ACCIDENT OR CYCLE RESCUE. Third party insurance is usually the responsibility of the race organiser.
  •  With the ETA, when you participate in a triathlon, provided the transition area is supervised by a marshal, your bike is covered against theft.
  •  If you do competitive cycling, you are covered in case of accidental damage.


Your bicycle is not devalued by the ETA over time.  You should insure your bicycle for its full replacement value (i. e. the bike, accessories plus VAT).


At no extra charge, if you are unable to complete a journey due to an accident or mechanical failure, you and your bike will be recovered from any road in the UK. The average response time is 40 minutes. You and your bike will be taken to your home, railway station, cycle repair shop or back to your car, whichever is the nearer. If your bike has been damaged or vandalised, the ETA will pay for a taxi to take you and your cycle home.


You may need to deal with a civil claim for compensation if you injure someone or damage their property or vehicle while cycling on any bicycle that you have permission to ride. ETA cycle insurance covers you for a pay out of up to
£1 million. This section of the policy has an excess (i. e. that you must pay) of £250.


Claims for theft, accidental damage or vandalism have an excess amount of 5% but a minimum of £25


ETA cycle insurance will pay out up to £20, 000 if you are seriously injured or killed while cycling on any bicycle.


You are covered for 90 days a year whilst travelling in Europe and 60 days per year worldwide for theft, accidental damage and vandalism. Third party cover does not apply the UK.


Reimbursement for cycle hire up to the value of £250 is standard on every policy, if your bicycle is stolen or off the road following a claim.


  •  Standard excess: 5% of claim value (£25 minimum)
  •  Third Party Claims: £1 million third party cover: £250
  •  Unattended bicycles: If a bicycle is left unattended in a public place between the hours of 01.00 am and 04.00 am the excess for theft/damage/vandalism is 20% or a minimum of £100


High Limit Disability Insurance

“The highest paid player on an NFL team is the quarterback and the second highest paid player is the left tackle because the left tackle’s job is to protect the quarterback from what he can’t see coming”
The is the opening monologue from the film “The Blind Side”.

A study by the University of Colorado performed in 2007 said that the career of a pro football player is about 3.5 years. Baseball players are slightly better at 5.6 years. An athlete may have to quit, when, for example, in the case of Joe Theismann, a 250 pound line backer falls on his leg.  Did he have High Limit Disability Insurance?

What does a player do when he cannot play in games anymore but he has acquired a life of luxury due to his high income? Unfortunately many athletes listen to bad advice and make bad investments. A report in Sports Illustrated stated that 70% of all professional athletes are either broke or have hit hard times within 5 years of ending their playing days.

Professional athletes often need High Disability insurance for:

  • Personal Disability
  • Contract Guarantee
  • Team Indemnification
  • Loss of Endorsement

Here are some examples:

Auto Racing:

“A client is rated based on the type of motor sport, class and medical history” says Adam Bates, vice president of Insurance Services of America, which offers niche insurance including health coverage for amateur and professional racers. “I usually recommend an Accidental Death and Dismemberment Policy, as most life policies exclude racing”.

Laura Hauenstein, president of WSIB Motorsports Insurance, which insures racers, says some of the agents familiar with motor sports will use the Internet to research the driver. If they find they have a history of crashing, rates can be higher.

WSIB offer worldwide 24 hour coverage on and off the track with varying deductibles and multi-year policy terms;

Benefits are paid on a per race missed basis and/or weekly or monthly basis for a driver who due to illness or bodily injury is unable to drive in a race.

Temporary Disability benefits for periods up to 60 months.  Permanent Disability benefits are paid in a lump sum to compensate for future loss of income.

Professional Baseball:

This is an intense contact sport requiring optimum physical health. A player’s ability to perform could be jeopardised due to either overuse or trauma, such as: muscle strain and meniscus tears; hand and wrist injuries; tendinitis, especially of the elbow; rotator cuff tears; “dead arm” and ulnar collateral ligament tears.  In these scenarios, the athletes need High Limit Disability Insurance.

A Disability Insurance Plan for Professional Baseball Players can provide monthly benefits from $1,000 to $100,000 or higher and offer lump sum benefits of $50,000,000 or more.

Injuries in other sports: offering similar benefits for disability:


  • ankle sprains, ligament tears and breaks;
  • knee and foot injuries;
  • muscular tears, sprains and breaks;
  • jammed fingers;
  • stress fractures;
  • deep thigh bruising.


  • knee injuries including ACL damage
  • concussion and other head injuries;
  • sprains, tears, broken bones, especially to the legs


  • concussion;
  • shoulder and elbow injuries;
  • wrist fractures;
  • lower back injuries;
  • injuries to the hip


  • ankle sprains;
  • achilles tendonitis;
  • concussions;
  • iliotibial band syndrome;
  • muscle cramps;
  • delayed-onset muscle soreness;
  • patellofemoral pain syndrome
  • plantar fasciitis
  • shin splints
  • calf, hamstring and groin muscle pulls and strains.

These plans are used in a number of ways to insure the professional athlete personally or to insure the team of which the athlete is a member as to the financial losses that result from a disabling accidental bodily injury or sickness. Career length varies by the sport in which the athlete performs. Exceptionally high earnings are generated in a short time span making the adequate insuring of the earning potential a primary financial planning process.

Here are some of the uses of those plans:

1. Loss of Future Earnings

A professional athlete can anticipate income levels and probable playing time. A disability can affect the level of income to be earned in the future and a disability can shorten the career period. As an example, an athlete has no income assurance beyond the term period of the present contract. This plan can insure an income should disability shorten the expected career period.

2. Contract Completion

The loss of an athlete by disability puts the team in double jeopardy. Revenue may slip and the team must continue to pay the non-performing athlete. These plans can insure the contracted compensation to the athlete, thus relieving the team of the financial burden.

3. Loss of Endorsements

Endorsement income and fees continue to flow as long as the public remain fans of the athlete. A political statement, a drug involvement, a drunk arrest, a public relations blemish, and the advertiser/endorsers pull back from sponsorship. This loss is also insurable.

4. Cost of Agents/Managers

During periods of disability it is in the athlete’s best interest to continue the use of agents and managers to keep the athlete’s value as an athlete and as a product spokesperson keenly in the minds of those who contract for their services. These costs can be insured.

Key Person Insurance

Key Person insurance is an insurance policy taken out and paid for by a business which is then able to recoup any financial losses suffered, which may arise due to the death or extended inability of an important member of that business to perform his/her duties. Also known as trauma insurance, it is a standard life insurance policy which protects the business. Should a person who is an income generator die or become incapacitated, then with this cover, the business is compensated by means of a fixed monetary sum specified in the policy, which sum facilitates the continuity of the enterprise. The term of the policy does not extend beyond the usefulness of the individual whose knowledge, creativity and/or skills are critical to the viability or growth of an organisation, and whose loss may cripple it. The compensation amount may go towards financing the search for and training of a successor. (Source: Wikipedia)

Martha Stewart is the founder of Martha Stewart Living Omnimedia. In 2004 Stewart was convicted of charges related to the ImClone insider trading affair. When Stewart was indicted, she stepped down as CEO and Chairwoman of MSLO. Following her release from prison in March 2005, Stewart launched a much-publicized comeback. Some huge corporations have the luxury of having a key person to take charge during a severe but non-threatening illness, such as a non-fatal heart attack. When Roger Deromedi, CEO of Kraft Foods was hospitalised for a severe viral infection, the company’s chairman, Louis Camilleri took temporary charge, with no adverse effects to the company. Robert Robins, a professor emeritus at Tulane University said that a determining factor in planning for key personnel disability issues is the CEO’s personality and work style: is he willing to work with the board and senior management on a transition basis, even if an illness is not terminal but merely prevents him from performing his duties. The end of a career is the same as the end of life to some company leaders. Capitulation will be resisted in every way possible. When a CEO has a hands-on rather than a delegatory style, the situation is much worse. Founder and CEO of Intel, Andy Grove was able to carry on during treatment for life-threatening prostate cancer. He left the company at a time that was suitable to him and the corporation. He was later diagnosed with Parkinson’s Disease.

At SouthWest Airlines, shareholders’ questions about 69 year old Herbert Kelleher’s prostate cancer resulted in his relinquishing his interim presidency and CEO position in 2001, although he retained his chairmanship of the board. In today’s competitive business environment, protecting the value of a star executive is critical. Using markets once reserved for elite athletes and entertainers, carriers such as Lloyds of London have developed products designed to protect a company’s most critical assets. These carriers have the ability to deliver disability benefits up to $100 million for the loss of an individual whose vision, knowledge and experience are critical to a company’s operation and future. Why do so many risk managers ignore this exposure? The due diligence needed to secure life and disability coverage is not part of a risk manager’s culture. They may feel awkward going to the boss and telling him that he may be putting the company at risk because of his lifestyle or his health. It involves personal information and health issues and has the added risk of opening secret doors and having unpleasant news revealed. Fewer than 35% of the corporations that secure key person life insurance, secure the corresponding key person disability coverage.

Obviously there are daredevils like Richard Branson and risk managers are aware of his activities. It is far more likely a key person will succumb to a stroke or cancer or hit by a car, than is that they will be disabled or killed while sky-diving over the Pyrenees. International travel can be hazardous though. In a recent situation, a private equity firm made a significant investment in a defence contractor. Shortly after the investment closed, the company named a new CEO. With hundred of millions of dollars at stake, the private equity firm sought to hedge their investment by acquiring $50 million key person life and disability insurance. As of the day of the request, the insurance adviser had eight business days to secure the insurance before the CEO departed for the middle east, with stops in hotspots such as Iraq and Afghanistan. As a result of the abbreviated time frame, traditional life and disability insurance was not an option. The adviser needed to turn to a speciality underwriter that deals with exceptionally large and complex risks. Within 72 hours, a policy was issued that covered the private equity firm’s loss of the CEO due to an accidental death or disability, as well as a result of acts of war or terrorism. The premium was for $50 million insurance and cost $62,500, covering a 2 week period. Sickness cover was included for certain elements of the insurance policy. Few domestic life and disability insurance carriers possess the ability to underwrite high risk exposures to the world’s hot zones. Unfortunately, many times, risk managers and their insurance advisors do not look beyond traditional channels to secure the needed key person disability coverage for their clients, partly because the cost of key person disability coverage is far greater than the cost of term life coverage. However, the risk is proportionally greater . The impact top CEOs and corporate leaders have on the success of their businesses is almost unfathomable. If you think about how many companies are dependent on one or two individuals, risk managers may need to re-examine how they insure human capital risk.

Insuring body parts

As long as a person is willing to pay the required premium, anyone can insure a body part of their choice. The 40 members of the Derbyshire Whiskers Club insured their beards against fire and theft for $32 each. This is called speciality insurance and before an entertainment company or athletic club pays any high premium for mega income-producing stars or athletes, they would have obtained the maximum possible insurance via standard life and disability cover. Your finger that moves the trackpad on your laptop could be insured by you, however, buying disability in this instance would be more economical.

It is the norm for entertainment companies and athletic clubs to obtain speciality insurance for huge cash-earning celebrities, as well as high-income athletes. Real Madrid renewed the insurance policy for Cristiano Ronaldo, valuing his legs at a whopping 103 million Euros against serious injury. Goalkeeper and Real Madrid captain Iker Casillas has his hands insured for 7 million Euros. Certain speciality insurance companies will insure the insured’s whole body but exclude the part that is most at risk. Factors which are taken into account are yearly income, type of sport, age and injury history.

Ahead of the 2014 Soccer World Cup Germany’s squad was valued at an insurable amount of 795 million Euros. This research was produced by the Centre for Economic and Business Research for Lloyds. The amount is calculated as the discounted sum of players’ future earnings, both from endorsements, salaries and bonuses.

One of the earliest body part policies was taken out by Ben Turpin. He worked in vaudeville, burlesque and circuses in the 1920s. Turpin had a distinctive appearance, with a small wiry frame, a brush mustache and crossed eyes. He insured his eyes and would have collected $20, 000 if his eyes had gone straight. A man most remembered for his legendary drinking talents, Aussie cricketer Merv Hughes insured his handle-bar mustache for $370, 000 during his cricketing days as a member of the Australian national team. The Welsh baritone Tom Jones was rumoured to have insured his chest hair for $7 million. The geriatric crooner still has the power to make the ladies swoon and he apparently considers his luxurious pelt an essential aspect of his sex appeal.

Keith Richards is an English musician, singer and songwriter and one of the original members of the English rock band, the Rolling Stones. Rolling Stone magazine credited Richards for “rock’s greatest single body of riffs” on guitar and ranked him 4th on its list of 100 best guitarists. His hands are insured for $1.6 million.

Egon Ronay was a Hungarian-born food critic who wrote and published a famous series of guides to British and Irish restaurants and hotels in the 1950s and 1960s. These guidebooks are credited with raising the quality of British cuisine offered in public eating places. Ronay also championed foreign cuisine for British diners. He insured his influential taste buds for £250,000. (

Sir Thomas Jones Woodward known by his stage name Tom Jones is a Welsh singer. He became one of the most popular vocalists to emerge from the mid-1960s. Tom Jones had his chest hair insured for £3.5 million in 2008. The geriatric crooner still has the power to make the ladies swoon and apparently considers his luxurious pelt an essential aspect of his sex appeal.

Ornella Muti was born in Rome. She is mostly known to the French for appearing in a television commercial of Giovanni Panzani Pasta. She was voted “The Most Beautiful Woman in the World” in 1994 by a worldwide poll of the magazine “Class”. She regards her breasts as her best asset and has insured them for $350,000.

James Francis “Jimmy” Durante was an American singer pianist, comedian and actor. His distinctive clipped gravelly speech, Comic language butchery, jazz-influenced songs and large nose helped make him one of America’s most familiar and popular personalities of the 1920s through the 1970s. His jokes about his nose included referring to it as a Schnozzola and this word became his nickname. His Schnozzola as he referred to it was insured for $442,000.

Angela Mount has unparalleled experience in the wine retail business. She is widely credited with revolutionising wine on the high street. She has been named as one of the top most influential people in the Wine Industry by The Drinks Business. Angela’s taste buds were famously insured for £10 million by former Somerfield bosses. Somerfield (originally Gateway) was a chain of small to medium-sized supermarkets operating in the United Kingdom.

Kenneth Arthur “Ken” Dodd, OBE, is an English comedian, singer, song-writer and actor. His trademark is his frizzy hair and protruding teeth. At the age of seven, he was dared by his school friends to ride his bike with his eyes shut. He accepted the dare, crashed, and received facial injuries which resulted in his distinctive buck teeth. He insured his trademark buck teeth for £10.6 million. (

Robyn Rihanna Fenty – a Barbadian recording artist has an estimated net worth of $90 million. She has insured her legs for $1 million. Michael Ryan Flatley is an Irish-American dancer and became internationally known for Irish dance shows Riverdance and Lord of the Dance. In May 1989 Flatley set a Guinness Book world record for tapping speed at 28 taps per second. In 1998 Flatley broke his own record for tapping speed by achieving 35 taps per second, as well as a Guiness Book recognition in both 1999 and 2000 being the highest paid dancer earning $1.6 million per week and having the highest insurance policy on a dancer’s legs of $40 million. (

Disgrace Insurance

Lance Armstrong’s doping scandal which culminated in his admission of guilt, has reminded companies of the potential importance of disgrace insurance as a risk management tool. He lost eight sponsors within a day.  Some sponsors took immediate action and some chose to let current deals expire.  Nike which had been an Armstrong supporter since 1996 was the first to announce it would be ending its sponsorship.  According to CNBC, one of the smallest sponsors to cut ties with Armstrong was Honey Stinger, a Colorado-based maker of honey-based nutrition food.  Other companies who cut ties with Armstrong was bicycle-maker Trek, Easton-Bell Sports, 24 Hour Fitness, operator of a national chain of health clubs, Anheuser-Busch, RadioShack and Oakley.

A corporate response to Armstrong’s scandal is hardly unprecedented.  Companies must be zealous about protecting their public image, and in some cases that objective leads companies to part ways with a disgraced athlete or celebrity spokesperson.  But, the decision to cut ties with a spokesperson can come with significant financial consequences.  In some cases, a company will have paid millions of dollars for an endorsement from the disgraced spokesperson, and the company might already have sunk significant sums into shooting commercials or print advertisements that will never see the light of day.  And, although sponsors may seek to recoup these losses through lawsuits against the disgraced spokesperson, such litigation is costly and may have the undesired effect of further highlighting the sponsor’s relationship with the spokesperson.

Oscar Pistorius, one of the world’s most in-demand sports personalities for marketers who couldn’t get enough of his inspirational back-story, athletic success and boyish good looks was estimated to receive endorsements worth more than $2 million a year.

Since news broke of the shooting of Reeva Steenkamp, Oakley has cancelled its contract and Nike has “no further plans” to use him in advertisements.  His endorsements stretched well beyond the footwear giant, taking in British Telecom firm BT and French designed Thierry Mugler.  The Icelandic company Ossur, that manufactured Oscar’s running blades has cut all ties with the first double amputee to run at the Olympics.

Whether an actor, athlete or other type of celebrity, anyone of lofty status can fall on hard times after taking a major PR hit.  Think Tiger Woods, Alex Rodriquez, Paula Deen and Oscar Pistorius one day they are riding the crest of fame and the next day they come crashing back to earth.

The important question here isn’t so much who or why but what is the collateral damage when a celebrity suddenly implodes?  For hundreds of companies across the world, that damage comes in the form of unwanted baggage now adorning their footwear, starring them in ads and smiling from their cereal boxes in every supermarket.

Disgrace coverage includes protection from unlawful acts and offensive statements by a contracted spokesperson whose image has been licensed on consumer items, and insurance for a commercial campaign that fails due to a disgraceful act.  This insurance entitles companies to reimbursement for money paid to secure the disgraced celebrity’s endorsement, hire a substitute spokesperson, reshoot or reproduce the advertising material, and remove the spokesperson’s image from product packaging.

When considering a disgrace insurance policy, there are a few important items to keep in mind.  First, if your spokesperson has a history of “issues” it does not necessarily mean you will pay more.  A disgrace policy usually does not include coverage for an insured person acting within their public persona, so personalities who are known to live on the edge are usually acceptable risks.

It is the clear and wholesome images that actually pose more risk.  For example, if Justin Bieber is caught doing or saying something crazy, no one is surprised.  When “clean, wholesome family man” Tiger Woods’ social life was revealed, however, that was a sudden shock to the community at large.

The policy’s definition of “disgrace” should also cover a wide swath – in practice it falls into a shadowy world where things are not always clear

Policyholders should make sure they clearly define terms broadly enough to indicate any misconduct that would adversely affect the company’s reputation.  A policy should have flexibility to match the morals clause in the advertising contract.  Policyholders also need to be conscious of time limitations.  Disgrace policies only cover the period of time related to an actual contract between the policyholder and the insured person.  Celebrity images on products can have a very long shelf-life, so if a company invests in a person, they should be comfortable with that figure’s persona.

This is especially true as television ads featuring now-disgraced celebrities live on forever, thanks to YouTube.  Hertz executives no doubt wish they had a time machine to take out some disgrace insurance on O. J. Simpson.  He was paid a reported $550,000 per year for the endorsement.  British supermodel Kate Moss was photographed snorting what appeared to be cocaine.  Chanel decided not to renew its expiring contract with Moss.  H & M halted its 2005 fall catalogue deal with the model, worth as much as $6.5 million a year.

It is one thing to have to end an endorsement deal prematurely, but its quite another when things get so bad you actually have to pay to get out of the deal,  Such was the case for the Houston Astros in 2002 when Enron, a major sponsor (the home stadium was previously named Enron Field), became embroiled in the worst financial scandal of all time.  In 2000, the Astros entered a 30 year, $100 million agreement with energy giant Enron to name its park after the company.  When Enron collapsed in 2001, the major league club had to pay Enron’s creditors $2.1 million to get out from under the bankrupt firm’s shadow.  The ballpark was temporarily named “Astros Field” before Coca-Cola came on as a sponsor later in 2002.

Disgrace insurance can be purchased either as stand-alone coverage or as part of a broader policy covering other advertising-related risks, such as the risk that the insured spokesperson will die or become disabled during the advertising campaign.  Purchasing disgrace coverage generally costs about 1% of the policy’s limits, so companies typically pay around $10, 000 for every million dollars of insurance purchased.  For a person known to live on the edge, an insurer may require extra premium, or that the insured person sign a warranty relating to his or her lifestyle, consumption of alcohol, or drug use.

The multi-million dollar investments that corporations make to put a celebrity’s face on a billboard, television spot or set of cookware needs protection such as that provided by Disgrace Insurance. Source: Exceptional Risk Advisors



Term Life Insurance

This type of insurance provides coverage at a fixed rate of payments for a limited period of time, the relevant term.  When the relevant period expires, coverage at the previous premium rate is no longer guaranteed.  The client must either forfeit coverage or apply for further coverage with different premiums and/or conditions.  If the life insured dies during the term, the death benefit will be paid to the beneficiary.

Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specified period of time.  Term insurance is not generally used for estate planning but is used for pure income replacement needs for an individual.  Some policies offer a feature called guaranteed insurability that allows the insured to renew the policy without proof of insurability.


The primary use of term life insurance is to provide coverage of financial responsibilities for the insured or his or her beneficiaries.  These may include consumer debt, dependent care, university education, funeral costs and mortgages.

a)  Annual Renewable Term :

The simplest form is a term of one year.  The death benefit would be paid by the insurance company if the insured died during the one year term, while no benefit is paid if the insured dies one day after the last day of the one year term.  The premium paid is based on the expected probability of the insured dying in that one year.  A challenge to renewal experienced with some of these policies is requiring proof of insurability.  For instance, the insured could acquire a terminal illness within the term, but not actually die until after the term expires.  As a result of the terminal illness, the insured would likely be uninsurable after the expiration of the initial term, therefore unable to renew the policy or purchase a new one.

Some policies offer a feature called guaranteed reinsurability that allows the insured to renew without proof of insurability.

The period for this type of insurance varies from 10 to 30 years.  As the insured ages, the premiums increase with each renewal period, eventually becoming financially inviable as the rates would eventually exceed the cost of a permanent policy.

b)  Level Term Life Insurance:

In this instance the premium is guaranteed to be the same for a given period of years, commonly 10, 15, 20 and 30 years.  The premium paid each year remains the same for the duration of the contract, however, the longer the term, the higher the premium, because the older, more expensive to insure years are averaged into the premium by the insurer.  Renewal options may or may not be included and the insured should review the contract to see if evidence of insurability is required in order to renew a policy.

c)  Options:

Most term policies include an option to convert to a Universal Life or Whole Life Policy.  A person who acquired the term life policy with a preferred rating class and later is diagnosed with a condition that would make it difficult to qualify for a new term policy would be able to use this option.

d)  Return Premium Term Life Insurance:

This provides a return of some of the premiums paid during the policy term if the insured person outlives the duration of the term life.  The repayment would be less the fees and expenses which the insurance company retains.  The premiums for a return premium term life plan are usually much higher than for a regular level term life insurance policy.

Cost Difference

Both term and permanent insurance use the same mortality tables for calculating the cost of insurance.  The premium costs for term insurance are substantially lower than those for permanent insurance.  The reason for lower costs is that term programs may expire without paying out, whereas permanent programs must always pay out eventually.  To address this, some permanent programs have built-in cash accumulation vehicles to force the insured to “self-insure” making the programs many times more expensive.


Insurance industry studies indicate the the probability of filing a death benefit claim under term insurance is as low as 1% of policies paying the benefit.  Term insurance may offer more coverage per premium dollar – by a factor of up to 10.

“Although there are many kinds of insurance (such as whole or universal life) the only type you need is Term Insurance, because it is simple and affordable. Use the “rule of 20” to determine the death benefit.  You want the beneficiary to be able to invest the payout and live off the income, so he or she does not have to worry about tapping into the principal.  That means the death benefit should be 20 times the annual income you need to replace.  If the goal is to replace $50,000 in annual income, you would want to buy a $1 million policy.” – Suze Orman on the SelectQuote Blog.

Disability Insurance

Often called DI or disability income insurance, is a form of insurance that insures the beneficiary’s earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work.

For example, the worker may suffer from an inability to maintain composure in the case of psychological disorder or an injury, illness or condition that causes physical impairment or incapacity to work.  It encompasses paid sick leave, short-term disability benefits, and long-term disability benefits.  Statistics show that in the US a disabling accident occurs on average once every second.  In fact, nearly 18.5% of Americans are currently living with a Disability, and 1 out of every 4 persons in the US workforce will suffer a disabling injury before retirement.

Types of Disability insurance

Traditional disability carriers have limitations on the monthly benefits, which limit benefits for high income earners.  Benefits typically cap at $20,000 – $25,000 of monthly benefits.

Individual disability insurance

Those whose employers do not provide benefits, and self-employed individuals who desire disability coverage, may purchase policies.  Premiums and available benefits for individual coverage vary considerably between companies, occupations, states and countries.  In general, premiums are higher for policies that provide more monthly benefits, offer benefits for longer periods of time, and start payments of benefits more quickly following a disability claim.  Premiums also tend to be higher for policies that define disability in broader terms, meaning the policy would pay benefits in a wider variety of circumstances.  Web-based disability insurance calculators assist in determining the disability insurance needed.

High-limit disability insurance

High-limit disability insurance is designed to keep individual disability benefits at 65% of income regardless of income level.  Coverage is typically issued supplemental to standard coverage.  With high-limit disability insurance, benefits can be anywhere from an additional $2000 to $100, 000 per month.  Single policy issue and participation (individual or group long-term disability) coverage has gone up to $30, 000 with some companies.

Key-person disability insurance

Key Person Disability Insurance provides benefits to protect a company from financial hardship that may result from the loss of a key employee due to disability.  The company can use the benefits to hire a temporary employee should the disabled employee’s disability appear to be short-term.  In the case of permanent disability, benefits are used to help defray costs related to hiring a replacement, including recruitment, training, startup, loss in revenue and unfunded salary continuation costs.

Business Overhead Expense Disability Insurance

Business Overhead Expense (BOE) coverage reimburses a business for overhead expenses should the owner experience a disability.  Eligible benefits include rent or mortgage payments, utilities, leasing costs, laundry/maintenance, account/billing and collection service fees, business insurance premiums, employees’ salaries, employee benefits, property tax and other regular monthly expenses.

National Social Insurance Programs

In most developed countries, the single most important form of disability insurance is that provided by the national government for all citizens.  The U. S. ‘s versions is Social Security (SS) – specifically, several parts of SS include Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).  These programs provide a floor beneath all other disability insurance.  In other words, they are a safety net that catches everyone who was otherwise a) uninsured or b) underinsured.  As such, they are large programs with many beneficiaries. The general theory of the benefit formula is that the benefit is enough to prevent abject poverty.

In addition to federally funded programs, there are five states which currently offer state funded Disability Insurance programs.  These programs are designed for short term disabilities only.  The coverage amount is determined by the applicant’s level of income over the previous 12 months.  The states are:  California, New York, New Jersey, Rhode Island and Hawaii.

America’s health-care entitlements – Medicare, Medicaid and Obamacare are the biggest drivers of America’s exploding federal debt.  There is a fourth program that pays disability benefits through the Social Security Administration, that is growing at an alarming pace.  While part of that growth can be explained by the ageing of the U. S. population, the largest factor in the proliferation of disability spending comes from the fact that Congress has dramatically expanded the definition of who gets called “disabled”.  As a result, many able-bodied Americans have been granted pay checks for life, crowding out America’s ability to direct needed resources to the genuinely infirm.

The Great Recession of 2008 led to a spike in unemployment;  many people who had difficulty finding work discovered that they might be eligible for Social Security disability benefits, benefits that would replace a significant portion of their previously earned wages, while also qualifying them for Medicare, the generous health insurance program for the elderly.  Today the United States spends around $200 billion a year on Medicare.

Employer-supplied disability insurance

One of the most common reasons for disability is on-the-job injury, which explains why the second largest form of disability insurance is that provided by employers to cover their employees.

There are several subtypes that may or may not be separate parts of the benefits package:  Workers’ Compensation and more general disability insurance policies.

Workers’ Compensation

This is a form of insurance providing wage replacement and medical benefit to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence.  The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain”.

While plans differ among jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future) reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance).

General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in workers’ compensation plans and negligence is generally not an issue in the case.

Aviation Insurance

The International Union of Marine Insurance first set up an aviation committee and later in 1933 created the International Union of Aviation Insurers (IUAI) made up of eight European aviation insurance companies and pools.  The London insurance market is still the largest single centre for aviation insurance.  The market is made up of the traditional Lloyds of London syndicate and numerous other traditional insurance markets.  The US has a large percentage of the world’s general aviation fleet and has a large established market.

Aviation insurance is divided into several types of insurance coverage available:

Public Liability Insurance

This coverage, often referred to as third party liability covers aircraft owners for damage that their aircraft does to third party property, such as houses, cars, crops, airport facilities and other aircraft struck in a collision.  It does not provide coverage for damage to the insured aircraft itself or coverage for passengers injured on the insured aircraft.  After an accident an insurance company will compensate victims for their losses, but if a settlement can not be reached then the case is usually taken to court to decide liability and the amount of damages.  Public liability insurance is usually purchased in specified total amounts per incident, such as $1,000,000 or $5,000,000.

Passenger Liability Insurance

Passenger Liability protects passengers riding in the accident aircraft who are injured or killed.  In many countries this coverage is mandatory only for commercial or large aircraft.  Coverage is often sold on a “per-seat” basis, with a specified limit for each passenger seat.

Combined Single Limit (CSL)

CSL coverage combines public liability and passenger liability coverage into a single coverage with a single overall limit per accident.  This type of coverage provides more flexibility in paying claims for liability, especially if passengers are injured, but little damage is done to third party property on the ground.

Aircraft Hull Insurance

This includes aircraft hull, aircraft hull -war, and aircraft loss of use where the insured operates the aircraft and has an insurable interest in the hull.

Location of risk is determined in one of two ways

1.  By reference to the country in which the insured is located.  Many countries do not specify how the location of an insured aircraft should be determined and this approach is the “default” option, used in the absence of more explicit requirements.

2.  By reference to the country in which the aircraft is registered.  This approach is prescribed by the insurance laws of some countries.  It applies to aircraft registered in an EEA (European Economic Area)  member state, in Switzerland and in some countries where Lloyd’s is not licensed, such as India.  This approach should not be followed unless applicable insurance law requires it.

Where an aircraft operates from or where the contract is concluded can also affect the location of risk.  Special rules apply in some Caribbean islands.  For instance, if a contract insures an aircraft “ordinarily based” in Anguilla or the Cayman Islands, the risk is located there, and if the application for the insurance is made in Jamaica, the contract is subject to Jamaican regulatory requirements.  It is therefore possible for a risk to have multiple locations for regulatory and fiscal purposes, i. e. a German registered aircraft ordinarily based in the Cayman Islands.

Aviation products liability insurance

Contracts can cover engine manufacturers, avionic software producers or similar businesses.  An aviation product liability contract is “general liability insurance” not “aviation insurance”.  The location of risk is determined by the country where the insured company or other entity covered by the insurance has its establishment (s).  The country where an aircraft to which equipment is fitted is not relevant to determination of the location of risk.  In many countries different rates of tax apply to general liability and aircraft liability risks.  The rates applicable to general liability then apply to aviation products liability.

Aviation Cargo (goods in transit) insurance

With the exception of the specific circumstances noted below the location of risk for an aviation cargo policy is determined by reference to the country where the insured company or other entity covered by the insurance has its establishment (s).  If goods are in transit to or from Bermuda, the British Virgin Islands or Guernsey, the risk is located in the place to which or from the transit starts or ends.

Ground Risk Hull Insurance Not in Motion

This provides coverage for the insured aircraft against damage when it is on the ground and not in motion.  This would provide protection for the aircraft for such events as fire, theft, vandalism, flood, mudslides, animal damage, wind or hail storms, hangar collapse or for uninsured vehicles or aircraft striking the aircraft.   The amount of coverage may be a book value or an agreed value that was set when the policy was purchased.  The use of the insurance term “hull” to refer to the insured aircraft betrays the origins of aviation insurance in marine insurance.  Most hull insurance includes a deductible to discourage small or nuisance claims.

Ground Risk Hull Insurance in Motion (taxiing)

This coverage is similar to ground risk hull insurance not in motion, but provides coverage while the aircraft is taxiing, but not while taking off or landing.  Normally coverage ceases at the start of the takeoff roll and is in force only once the aircraft has completed its subsequent landing.  Due to disputes between aircraft owners and insurance companies about whether the accident aircraft was in fact taxiing or attempting to take-off, this coverage has been discontinued by many insurance companies.

In-Flight Insurance

In-flight coverage protects an insured aircraft against damage during all phases of flight and ground operation, including while parked or stored.  Naturally it is more expensive than not-in-motion coverage since most aircraft are damaged while in motion. More on wikipedia about aviation insurance.

Image source:

How to Buy Disability Insurance

Without disability insurance, disability can be a financial disaster for you and your family. If you become disabled during your working life, you lose your earning power, but you can continue to have the same living expenses along with mounting medical costs. If you decide to purchase disability insurance, ask the following questions to make sure you get the coverage you need. If you ever become disabled, the right disability insurance policy can help you avoid financial ruin while you recover your health.

How does the disability insurance plan define disability?

Some disability insurance policies consider you disabled only if you are unable to perform the duties of any job, which means you may not be eligible for disability benefits if you can still manage a low-skill, low-wage job. Better disability insurance plans pay benefits if you are unable to perform the duties and fulfill the responsibilities of your usual occupation.

When do disability insurance benefits begin?

Most plans have a waiting period after an illness and before payments begin. Your waiting period will depend on your policy. Your first disability payment can range from 60 days to a year depending on your policy’s particular waiting period. If you are able to choose your waiting period and would like a lower disability insurance premium, you will want to choose a longer waiting period.

Disability Coverage Options:

  • Any Occupation: This definition is more restrictive as benefits are only paid if the insured is unable to perform the duties of any gainful occupation for which he is suited by education, training or experience. Several sites have more information on disability insurance decision points.
  • Partial Disability: Under this policy benefit, the insurer pays a benefit when the insured is only able to return to work (as authorized by his doctor) in a partial capacity. The concept is that an insured who is able to perform some, but not all of the duties of his occupation, is entitled to some benefits.
  • Residual Disability This benefit encourages employees to return to work, at least part-time, following an injury or illness. A residual disability is one that results in the inability for an insured to perform some of the duties of her own occupation full-time, leading to a loss of income and therefore a benefit is paid. Be aware, however, that even long-term disability may not last as long as the client might expect. The typical length of a disability claim is two and a half years. It is in the insurer’s best interests to do whatever they can in terms of rehabilitation and job training, to move beneficiaries back to work. And though Cadillac policies (Informally, a Cadillac plan is any unusually expensive health insurance plan, usually arising in discussions of medical – cost control measures in the United States) offers “own occupation” coverage meaning that the client will receive benefits unless they are able to go back to work in your chosen field – many employer – paid plans only cover “own occupation” benefits for the first two years.  After that you will be expected to try to find work in any field.

How big a benefit can you collect?

It is typical now for companies to pay for long term coverage that would pay workers 50 percent or 60 percent of their income, and to allow workers to pay for another 10 or 20 percent of their monthly benefit.  But be aware that many policies also limit total monthly coverage – the median weekly maximum is $1,154 according to Mercer. Clients may need more money than that, especially because Mercer reports that two in five employers will kick you out of their health insurance plan while you are out on disability. The disability income insurance should cover 60% of the individual’s salary.

Highest Movie Insurance Claim

When Paul Walker was killed in November 2013 in the midst of shooting Fast and Furious 7, it was clear that the actor’s untimely death in an horrific car accident would trigger by far the largest insurance claim in Hollywood’s history.

Having had a major role in the majority of previous films in the series, the loss of Paul Walker meant that the film itself had to undergo major revisions – these included rewrites, a halt on production, a larger investment in special effects, and hiring three new actors to play the part of Walker’s character.  When it came to figure out how they would account for the absence of Walker, the film’s producers and director agreed that they would keep Walker’s character in Fast and Furious 7, considering a substantial number of his scenes had already been filmed.  To do so, they opted to have a computer-generated version of his face superimposed onto other actors.

In total, three people took turns in handling Walker’s role, two of which are actually Paul’s brothers and another one being an actor of similar height and physique.  The employment of three individuals to cover the role of one person, as well as the associated cost for creating a believable CG version of Walker’s face all added to production costs.

In addition to this, the amount of time that was spent halting production while figuring out how to handle the film without Walker added around $1 million a week to the production costs.  Between the new actors, the CG, delays and other associated costs, increased the film’s budget by 25% from its original $200 million to $250 million.  Because this additional $50 million has been the result of an unforeseen tragedy, the studio is looking to claim it on insurance.

While the claim is yet to be officially paid, its more likely than not that it will be.  If so, the $50 million claim will prove to be the biggest approved insurance claim in Hollywood history.  While it may prove to be a lot of money in terms of Hollywood payouts, it could have been much bigger.  If the studio had chosen to completely rewrite the film and remove Walker’s character from it entirely, then the additional production costs could have amounted to the same costs of the original budget.

In the past, the passing of Hollywood stars have required sudden changes to film production.  The next instalment in The Hunger Games film series will also see some changes as a result of Philip Seymour Hoffman’s passing. While it was suggested that a computer-generated version of Hoffman’s character would be used to fill in any remaining scenes, the film’s director has stated otherwise.  Instead, he noted that already-available footage of Hoffman will be used where necessary.

Protection at the World Cup

In June 2014 the FIFA World Cup tournament kicked off in Brazil to support and cheer on 32 national teams as they competed for the title of the world’s best.  Organisers and Government officials made security a major priority as the potential for terrorism, crime and civil unrest loomed large.  The event came on the heels of the 2014 Winter Olympic Games in Sochi where headlines before play began warned of possible dangers like “black widow” suicide bomber attacks.

Manchester United winger Adnan Januzaj received a number of death threats over his decision to represent Belgium at international level.

The question is whether World Cup spectators will also face a threatening situation, but for different reasons.  Last June demonstrations and riots took place throughout Brazil during the 2013 FIFA Confederations Cup, a warm-up event to the World Cup.  More than a million people took to the streets to not only protest the amount of government spending on preparations for the games, but to express deeper concerns regarding government corruption and financial mismanagement.  The First Capital Command, the country’s largest drug cartel even threatened to organise a “World Cup of Terror” during the games, vowing that the mass violence that had ignited in the Brazilian Streets would not subside in 2014.

Crime in Brazil

There is no denying that Brazil has a crime problem.  Protection at the World Cup is vital. There are regular robberies, muggings, kidnappings and even “quick nappings” in which criminals abduct victims from outside banks or ATMs in order to receive a quick payoff from the victim’s family, business or ATM card.

A 2013 study by the Latin American Studies Centre found that, from 1980 – 2011 more than one million people were murdered in Brazil.  During that 30 year period the homicide rate climbed 132% from 11.5 murders per 100, 000 inhabitants in 1980 to 27.4 per 100, 000 inhabitants in 2011 – the seventh highest rate in the world.  What’s more only 8% of reported crimes are solved.

To their credit, Brazilian officials have not turned a blind eye to these problems, especially as they prepare for the World Cup and the 2016 Summer Olympic Games in Rio.  Police Pacification Units have been conducting operations in Rio to clear drug gangs and reduce intergang violence.  The government also plans to employ 170, 000 security personnel and spend almost $800 million on security measures in the World Cup alone.  This includes high tech measures such as unmanned surveillance aircraft and multi-use robots that can analyse and remove suspicious packages.

While homicide numbers and security measures are hardly what Brazil want in its tourism brochures, they are clearly not enough to stop more than half-a-million soccer fans, corporate sponsors, executives and media from descending on the country.  These individuals all need to understand how to stay safe.

When underwriting coverage in hostile areas, rates can vary based on multiple factors, such as security arrangements, travel vendors and length of stay.  In very hostile areas, rates even vary down to specific latitude and longitude coordinates within a single city or locale.  This coverage can encompass everything from accidental death, disability and dismemberment coverage to kidnap and ransom, evacuation, return of remains, extraction and medical and emergency assistance.

In the past, such coverage often required multiple policies to properly protect travellers. This was a daunting task for both the insurance broker and the traveler, an often not very cost-effective.  In the wake of Sochi, specialty underwriters have recognised the increased need for an all-encompassing traveler insurance policy and created one aggregated policy form and marrying that with security consulting, consumers and insurance advisors can acquire protection in a more stream-lined fashion.

Coverage with this new product protects the insured immediately upon leaving American soil, but its value begins long before then.  As a risk mitigation tool, underwriters are now providing their policyholders with a pre-trip World Cup security briefing that highlights various threats in the region and offers counsel on how to best mitigate those threats.  International cell phone numbers are gathered and urgent security push notifications can be sent via text to policyholders if an outbreak of violence erupts.

Policies typically range from $1 million to $5 million but, for extremely wealthy travellers, limits up to $100 million can be deployed.  In the speciality insurance world, all men are not created equal.  High profile VIPs like soccer star David Beckham will have to pay a lot more for coverage than two anonymous soccer fans from the Midwest.

The possibility of kidnapping is one of the bigger challenges.  The kidnap and ransom component of these travel insurance policies covers expenses for the services of experienced crisis management teams, which includes highly skilled professionals, such as former CIA, FBI, Secret Service and military police personnel.  Their purpose is to assist in negotiating the safe release of kidnap victims.  If a ransom is required, they are skilled at negotiating the payout while making safety the top priority.  It is important that anyone buying these policies should keep the purchase strictly confidential as potential kidnappers may view such insurance as a source of ransom funds.

Munich Re is one of about half a dozen major backstops for FIFA, media rights holders, sponsors and anybody else with a larger financial stake in the World Cup.  Along with competitors such as Swiss Re and Hannover Re it sets the market for as much as $2 billion in insurance covering the event.  If matches are cancelled, delayed, or interrupted by weather, violence, stadium failures – anything that falls “outside of the control” of the insured – Munich Re helps cover sunk costs.  This makes the company an expert in everything from meteorology and crowd control to political climates and stadium construction.

In the 7 years since Brazil was named host for 2014, a team of roughly a dozen Munich Re employees has been gaming out the universe of potential risks.  This means looking at drainage plans, past cancellations and event protocols and even then they do not know for sure.

The 2022 World Cup

The 2022 World Cup event is facing threats from ambitious terrorists.  The Islamic State of Iraq and Syria issued a bizarrely polite threat to FIFA warning them not to hold the 2022 World Cup in Qatar.  Regally addressing the FIFA President by his full first name “Joseph” the terror group suggest Mr. Blatter had better find a replacement venue for the Qatar event, while nonchalantly mentioning the long-range scud missiles ISIS claims to have acquired, which would put the Kingdom well within their strike range.

Image source: AFP