5 Bizarre Lloyd’s of London Insurance Policies

Lloyd’s of London is one of the most venerable firms of world capitalism. It was formed circa 1690 in Lloyd’s Coffee House, where the caffeinated merchants of the shipping trade gathered to exchange gossip and do deals. In this bustling, vulgar environment, epitomizing the practicality and ebullience of capitalism at its best (flipside: much of what the early Lloyd’s exchange did was insure slave ships), the practice of pooling and spreading risk, so integral to our modern economy, was perfected.

Lloyd’s is still with us today, albeit in a very different form. It enjoys a peculiar status under British legislation and is not itself a corporation, but a market. It does not underwrite policies itself, leaving that to individual market members known as Names. There has been a fair amount of controversy over some Lloyd’s practices, especially during the asbestos scandal of the 1980s, which remains to this day a slow-motion trainwreck for the entire insurance industry. It’s also had to absorb the occasional hard hit from an unpredictable disaster, like the San Francisco Earthquake, or the Exxon Valdez spill.

But Lloyd’s is probably best known in popular culture for the strange one-off policies (known as specialty lines) it has facilitated, often involving celebrity body parts. Here are a few of the more remarkable things people and businesses have arranged to insure:

1. A white Christmas in Nebraska. A car company made a promotional offer where they would pay out $10,000 to anyone who bought a car from them during the month of December if it snowed at least four inches (pretty stringent definition, if you ask me) on Christmas Day.

2. Taste buds. The Costa Coffee company took out a 10-million-pound policy against the contingency of their professional coffee taster, Gennaro Pelliccia, losing the use of the uncannily developed sensory organ that he depends on. That’s right, his tongue is worth more than most of us will ever see (or taste?) in a lifetime. As a former coffeehouse themselves, Lloyd’s must have felt a special call to duty on this one.

3. The Loch Ness Monster. The whisky brand Cutty Sark (itself named after a London maritime icon) ran a promotion offering a million pounds for proof of Nessie’s existence. One might doubt whether they ever feared they’d have to pay up, but they took out a Lloyd’s policy all the same.

4. The Riverdance guy’s legs. Yes, Michael Flatley, Lord of the Dance himself, popularizer of Irish step dancing though actually hailing from Chicago, insured his gams for a staggering (pun intended) $47 million. He followed in the footsteps (ouch) of other famous leg-insurers Betty Grable, Brooke Shields, and Tina Turner.

5. Virgin birth. In 1999, a woman named Mary Murphy feared that she was going to immaculately conceive with the approach of the Millennium. Some Lloyd’s Name of little faith was happy to take her up on it. One can only imagine the wild court case that would have ensued had she become pregnant and tried to collect on her policy.

Carol Wilson enjoys blogging about financial, educational, and just plain random topics, but writes most often for businessinsurance.org. She is a pleasantly plump philatelist and enjoys tea and mangoes in her spare time. Leave her some comments below!

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I like to thank our guest blogger Carol for a wonderful post. Here are some blog posts I recommend from academic and business acquaintances of mine – Randy Kemp

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