Lloyd’s of London and Some of The Risks Insured, or Not.

In the History of Lloyd’s of London Blog I wrote about how the underwriting syndicate started in the coffee house of Edward Lloyd during the late 1600’s. Today Lloyd’s is well known as the insurance market where anything can be covered for the right premiums. It’s not completely fact that Lloyd’s will insure anything, but they will consider unusual assets and greater risks.

Lloyd’s underwriters have agreed to insure everything from the 1st airplane to Betty Grables legs. Even John Glenn America’s 1st astronaut, was insured with Lloyd’s. From shipwrecks and piracy to Kidnap and Ransom Lloyd’s can often find a way to cover those risks traditional insurance won’t.

Some of the interesting examples of unusual risks Lloyd’s of London underwriters have accepted are:

  • The White Christmas Car Deal, Lloyd’s accepted a $1.5 million dollar risk when a Nebraska car dealership offered $10,000 to anyone who purchased a car during the month of December–if it snowed on Christmas day. More than 65 car buyers had the chance to win the $10,000 and Lloyd’s of London agreed to pay the claims if at least four inches of snow fell on that Christmas day.
  • It’s been reported that a certain photographer purchased a “love insurance” policy in the amount of $100,000 to cover the risk of his model deciding to get married. Apparently if the model had married the photographer would have suffered some kind of great loss. The model eventually did get married but not until the photographers insurance policy expired.
  • Lloyd’s has issued policies offering to insure against the chances of having twins.
  • Policy‘s have been written to protect from one’s golf opponent making a hole in one.
  • Lloyd’s has underwritten insurance protection for war and peace.
  • Insured against a rained-out wedding. But, not just the wedding Lloyd’s has also issued coverage for the loss of a lover.
  • Some models have purchased Lloyd’s “happiness policy” which offers insurance for the risk of developing “worry lines.” These will apparently cost a great deal of money to surgically correct, and possibly ruin a young models career.

With the kinds of unusual risk, and often difficult to comprehend insurance policies Lloyd’s underwrites they have like most insurers suffered their fair share of claims and losses:

  • When Lutine Bell rang over the rostrum announcing the Titanic disaster Lloyd’s paid $3,019,400.
  • Lloyd’s of London has always insured sipping and cargo worldwide when the Andrea Doria sank on July 26 1956 more than $5.6 million was paid out.
  • The San Francisco earthquake of 1906 hit off the cost of California at 5:12 A.M on Wednesday April 18, 1906. Most reports estimate the magnitude of the earthquake was 7.8, other values have also been suggested to be from 7.7 up to 8.3. Lloyd’s of London paid $1,463,400 for claims in 1906 for the San Francisco earthquake.

Lloyd’s doesn’t always underwrite a risk, even if it’s unique or unusual. The Lloyd’s of London underwriters do turn down risk and have rejected things such as:

  • The acrobat, who performed her act hanging from a rope by her teeth. Lloyd’s declined to cover her against the risk of harming her back teeth.
  • There was a European gentleman who asked Lloyd’s to underwrite a policy to insure his daughter’s virginity. It’s so hard when we love our children so much not to want to buy some kind of insurance to protect them.

Another insurance risk I haven’t seen Lloyd’s protect is no talent coverage for some of these celebrities with insured billion dollar bottoms and if virginity insurance had ever been an insurable risk this world wouldn’t be what it is today.

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