Planning for the unexpected a tricky process: Specialty insurance products can help by giving you peace of mind

“Iwish I never said that…” Have you ever thought that?

A couple of months ago, I wrote about key person insurance, I think this column on specialty products will complement it well.
Some specialty products have been around for a long time, others just recently.

Today, we can insure most anything we can think of, good or bad. Insurance is meant for the unexpected. That’s why we buy insurance don’t we? What are the odds?

• Your home has a 1 in 1,200 chance of
being destroyed by fire.
• Your automobile has a 5 in 1,200 chance
of being totaled.
• You have a 105 in 1,200 chance of being
hospitalized.

Let’s look at insurance for your house: How many times have you seen someone’s house burn down? Do we still buy home insurance? Of course. I know I would never be without my business or home insurance. Some of the different types of insurance that I’m going to talk about might sound obscure, but I assure you there is a tremendous need for these types of coverage. If, in fact, you can get it.

What I mean by that is the underwriting process, for the most part, is a long process.Most of this type of coverage is not based on a person’s health or decades of actuarial data. A good part of the underwriting is based on your current and future business practice.

Have you ever said or done something that you wish you hadn’t? Let’s start of with coverage relating to social media companies (eg. app developers, business networking websites, causal gaming websites, corporate blogs, digital marketing agencies, educational games, genealogy websites, instant messaging applications, internet radio websites, location-based gaming,mobile phone content developers, news aggregation services, online dating agencies, online listings sites, photo sharing websites, social networking websites, user-generated content sites, video sharing websites or other web-based communities).

To get you thinking, here are some businesses that would benefit from cyber, privacy and media risks: charities, higher education, healthcare, entertainment and media, leisure and hotels, logistics,manufacturers and wholesalers, professional
services, public sector, retailers, support services, utilities, website operators and e-tailers.

As I touched on earlier, the underwriting process is different than most. The following is an introduction to an underwriting
application: “The purpose of this application form is for us to find out who you are and to obtain information relevant to the cover provided by theMEDIA policy. Completion of this application form does not oblige either party to enter into a contract of insurance. Insurance is a contract of utmost good faith. This means that the information you provide in this application form must be complete, accurate and not misleading. It also means that you must tell us about all facts and matters which may be relevant to our consideration of your application for insurance.

Any failure by you in this regard may entitle us to treat this insurance as if it never existed. If a contract of insurance is agreed between you and us, this application form will form the basis of the contract.”

In other words, if you are not 100% truthful up front, the contract can be considered null and void.

So, what do they ask you? Well, let’s just explore what don’t they ask:

I always say a picture says it all—so what needs to be accomplished here is putting the whole picture into words (your story)
that explains everything to the underwriter (an underwriter is a person just like you) who never meets/sees you and needs to
determine how to rate the “risk,” with the information provided in the application. They do-not read between the lines. You
have to tell all. If they have any doubt or don’t understand something, they might not ask for clarification. So you only have
one good kick at the can.

Let’s change gears now and think about high-limit coverage for key employees: Imagine a major TV network producing a
worldwide syndicate show with guaranteed revenue of 25 million for broadcasting rights to the show over a four-year period.
What would happen if the star of the show somehow became disabled or died during this time?

War and Terrorism Risk — With a growing number of terrorist attacks around the world and with specific situations such as
those in Iraq and Afghanistan, special insurance solutions are needed for individuals working in exposed high-risk areas. Such
coverage would normally be excluded from traditional insurance policies.

Following a civil war or conflict, there is always a cleanup operation that follows. This will involve the detection and removal
or destruction of mines and unexploded ordnance. Coverage is needed for humanitarian organizations such as: accidental
death and permanent disability,medical expenses, repatriation and evacuation expenses for their expatriates working in
the Middle East.

Confidential Life/Failure to Survive — This is strictly a third-party coverage to protect against death from any cause (including
sickness) in respect of a party who have no knowledge that coverage is being sought on them. When sold in tandem with disability coverage, complete protection in obtained.

For example, a large corporation is involved in a lengthy lawsuit involving several million in legal costs and the judge in
this case is over 60 and a motorcycle adept. Coverage can be arranged to reimburse the legal expenses without any medical examination on the judge, using a simple statement from the court clerk.

Loss of Services for Professional Sportspersons—Coverage is available for a star player(s) on a team. Personal policies
for the players themselves to guard against the loss of their future income or policies to protect the interests of sponsors or agents. Available coverage: accidental death, accident & sickness permanent total disablementand accident and sickness temporary
total disablement.

Or, how about a NASCAR team signs up a driver for the season. During the year, the driver is unable to race due to an injury or
illness, which will keep him off the race track for the rest of the season. If a policy was put in place to cover the salary they are obligated to pay the driver, these additional funds allow them to hire another driver to
complete the season.

Maybe a basketball player is in the final year of a contract and is looking to sign a lucrative long-term deal at the end of the
season. A policy could protect the player for his final season under contract, in the event he suffers a career-ending injury
during the season.

Kidnap, Ransom and Extortion—These policies protect people, as well as personal and corporate assets, against the financial
consequences of a kidnapping, extortion or illegal detention. Coverage is there to provide protection to both corporate and
wealthy individuals against the very real threat of kidnap or extortion. Protecting the most hazardous of risks in countries
such as Afghanistan, Colombia,Mexico, Iraq, Nigeria and Venezuela.

Judicial Delay Coverage—This insurance is designed to pay the additional legal fees, disbursements, costs and expenses
including, but not limited to, those incurred in preparation for and attendance at a rehearing or settlement proceedings. It’s
designed to reimburse litigants for any costs they incur if a trial collapses because a key player—such as the judge—gets
sick or dies and the case has to start again.

It is costly when Canadians can expect to pay anywhere from$150 to $1,000 an hour for a lawyer.

Contingency Insurance—Contingency Insurance usually deals with important events or personalities and generally involves some glamour or excitement. Sales promotions have been one of the fastest growing segments of marketing and advertising
over the last decade or so. It is no longer sufficient to simply create ways to differentiate products that might
appear to the consumer as being of comparable quality and price range. The traditional approach of advertising is rapidly
being replaced by ‘impact marketing.’ Budgets? There aren’t any. Costs can be huge. So the following types of Contingency insurance are a must to have: Event cancellation insurance (conventions, weddings, special events, trade shows), non-appearance coverage (performers, public speakers), adverse weather insurance (events or sales promotions, expense/income stabilization), prize indemnity insurance, (basketball shorts, shoot the puck, hole in one, etc., spectator participation at sport events, score predictions and auto dealer promotions, instant win, scratch and win and match and win, coupon over redemption, internet-based
promotions).

Loss of Use of Sight/Taste— Who might this be good for? How about a fragrance chemist or somebody in the spirit/wine
industry.

Tuition Protection—Getting ready to send your child to an expensive university out of the country? There is great coverage
available that could save you hundreds of thousands of dollars if something unexpected should happen.

Let’s talk about your potential risks. I’m here to help.

Posted by Robyn Latchman