SeibertKeck: Insurance coverage for Santa, from his home to the toy factory Featured

5:26pm EDT November 25, 2013
Ryan Clugston, Client advisor, SeibertKeck, Best Hoovler McTeague Ryan Clugston, Client advisor, SeibertKeck, Best Hoovler McTeague

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Here comes Santa Claus, right down Santa Claus Lane. He’s got a bag that’s filled with toys, but does he have coverage for those he employs?

The North Pole is very dynamic — Santa Claus has a personal home, reindeer, a toy factory and a sleigh for business use. Like many business owners, he needs to look at a variety of insurance coverages for all aspects of his life.
Because of the animal exposure from the reindeer, the Clauses need to put their residence on a farm policy, or a home policy with an endorsement that extends to the barn and animals.

A business policy would insure the toy factory, while the sleigh would be added to the business auto policy. Any additional drivers also need to be taken into account. If Mrs. Claus or any elves want to drive the sleigh, they would need their driving records checked first, and, if acceptable, added to the policy.

Santa’s agent may strongly recommend umbrella insurance, which are additional liability limits that extend over the home or business limits. In the unlikely event that Santa is sued, the lawsuit could extend from Santa to jeopardize the toy factory and any related businesses. An umbrella provides an extra layer of liability protection in the event of a loss or lawsuit.

Smart Business spoke with Ryan Clugston, a client advisor at SeibertKeck, about how Santa Claus can stay safe this holiday season with the proper insurance coverage.

How should the toy factory be covered?

Santa’s toy factory is a unique risk. Because 100 percent of its inventory is scheduled for delivery on one night, he needs peak season insurance. Peak season insurance automatically provides you with a specified percentage increase in insurance coverage during peak inventory periods when you insure your inventory for its average monthly value. We all know that although the elves have 12 months to make the toys, they really pick up the pace in November and December, significantly increasing the number of toys stored at the factory. Having peak season insurance allows Santa to increase the coverage for the toys for a couple of months while inventory is at its highest.

Santa also should talk to his agent to make sure his business policy has equipment breakdown coverage, in case any of the toy-making machines were to break, and business interruption coverage, which would help Santa if there was a covered loss and he was unable to work in the factory.

What are some additional coverages Santa may need?

An important coverage for Santa as he delivers all the gifts would be cargo coverage. Cargo coverage provides insurance for the goods, in this case gifts as they are in transit on the sleigh, until delivery. For Santa this could include any gifts that fall from the sleigh, are delivered to the wrong child or damaged en route.

Since Santa and his elves make all the toys at the North Pole, another coverage Santa should get is products liability. Products liability coverage is necessary because the manufacturer or maker of the products is held responsible for the injuries those products cause. If a toy were faulty or incorrectly made by an elf, Santa’s factory would be liable if any injury occurred to a child.

Any other tips for Santa — or other insurees — as the year winds down?

Take the time to:

  • Put multiple insurance policies with the same carrier. This can be beneficial in the event of a claim and save on premiums.

  • Review your personal and business insurance with your agent annually.

  • Contact your agent two to three months before your busy season. They will review your risk, make sure coverage is in place and allow you to focus on your business when the rush hits.


It’s critical to have a trusted insurance agent who can advise you how to best bundle your insurance for convenience and premium savings, without sacrificing necessary coverage, to have a happy holiday season and successful year following.

Ryan Clugston is a client advisor at SeibertKeck, Best Hoovler McTeague. Reach him at (614) 246-7475 or rclugston@seibertkeck.com.

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