The most unusual business insurance policies you never knew existed
When it comes to business insurance, most people think of the basics: property damage, liability, or worker’s compensation. But beyond the usual options, there’s a world of specialised coverage designed for the strangest, most unexpected risks a business might face. These unique policies offer protection from rare, sometimes downright strange, events that could have serious financial impacts.
From insurance covering employees’ lottery wins to policies that protect haunted houses, companies today have access to unusual insurance options that help them prepare for the unexpected. Let’s dive into the surprising side of business insurance and discover how companies are protecting themselves from the unexpected!
Here’s a look at some of the more unusual business insurance policies available, listed from least to most expensive, factoring in the type of profession, typical coverage length, and the risk level.
1. Niche Professional Insurance
Niche professional insurance provides coverage for people in unique careers, where standard policies just don’t cover the risks. This affordable coverage is tailored to meet the specific needs of unconventional professions, from drone operators working in remote areas to pet groomers, tattoo artists, and social media influencers. These specialised jobs often face challenges that regular business insurance doesn’t address.
This isn’t one-size-fits-all coverage; it’s fine-tuned to the unique demands of each profession. Niche professional insurance provides peace of mind so professionals can focus on their passion without worrying about financial setbacks.
2. Food Truck Insurance
Food truck insurance, also called catering van insurance, is designed for the mobile eatery world. Unlike regular vehicle insurance, which is usually for personal use, food truck insurance combines commercial vehicle protection with coverage specific to food service operations. It safeguards not just the truck but also the cooking equipment and food safety concerns within it.
For operators setting up in busy streets or rural events, the risks can be high. From food safety issues and equipment breakdowns to public liability at crowded events, this insurance covers the unique challenges of mobile kitchens. With food truck insurance, operators can focus on serving customers without worrying about unexpected costs from potential mishaps.
3. Halloween and Haunted House Insurance
Halloween attraction insurance is a unique and vital policy for businesses running spooky events like haunted houses, scare mazes, and fright nights. This coverage, which tends to be mid- to high-priced, is crafted for seasonal, high-risk events. While these attractions are meant to thrill, they also come with real hazards that standard policies wouldn’t cover.
From fog machines to sudden jump scares in dimly lit spaces, Halloween attractions set the perfect spooky atmosphere—but also a risky one. Halloween attraction insurance helps cover injury claims, property damage, and even cancellations due to bad weather. This way, event organisers can focus on delivering memorable scares without financial worries.
4. Prize Indemnity Insurance (Hole-in-One Insurance)
Prize indemnity insurance protects businesses and event organisers from the cost of awarding large prizes in contests and promotions. This type of insurance is popular for high-stakes events, such as game shows, lottery promotions, or sports challenges, allowing companies to offer big prizes without the financial risk if someone wins.
A classic example is its use in golf tournaments where businesses offer luxury prizes—like cars or cash—for a hole-in-one. Prize indemnity insurance covers these prizes if someone succeeds, letting companies promote attention-grabbing contests without risking their finances. In 2014, for instance, Warren Buffett’s Berkshire Hathaway insured a $1 billion prize for Quicken Loans’ perfect NCAA March Madness bracket challenge.
5. Lottery Insurance
Lottery insurance is designed to protect companies from the disruption caused if multiple employees win the lottery and decide to leave their jobs. Often purchased by companies with large workforces, such as retailers, factories, or financial institutions, this policy helps businesses handle the impact of sudden resignations.
For example, twelve bank employees in the UK won the lottery and promptly resigned, leaving the business scrambling. With lottery insurance, companies protect themselves against the risk of mass departures and the challenges of quickly replacing and training new staff.
6. Career Insurance
Career insurance provides financial protection for individuals facing unexpected career setbacks, like job loss or injury. Tailored for people in high-stakes or physically demanding roles, this coverage helps ensure future income stability if an unexpected event impacts their career.
Famous examples include the $250,000 policy that protected comedy duo Abbott and Costello in case of a career-ending dispute. High-profile athletes, like David Beckham, are also known to have career insurance against injuries that could end their professional paths. By securing this type of insurance, professionals can protect their livelihoods from unforeseen circumstances.
7. Key Person Insurance
Key person insurance is a specialised life or disability insurance policy that businesses take out for an essential employee whose expertise or leadership is crucial to the company’s success. This could include a founder or executive, and their loss could have a huge impact on the business.
An example of this policy’s importance is Apple’s reaction to CEO Steve Jobs’s death in 2011, which caused a 5% drop in its share price. Apple then secured key person insurance for Jobs’s successor, Tim Cook, with an annual premium of $774,000 in 2014. This coverage helps businesses maintain stability when a key figure leaves unexpectedly.
8. Kidnap and Ransom (K&R) Insurance
Kidnap and ransom (K&R) insurance is tailored for companies operating in high-risk areas, protecting them from the financial and operational effects of kidnapping or extortion. This policy not only covers ransom payments but also provides crisis management and negotiation services to help resolve incidents safely.
A well-known example is the 1991 kidnapping of a Coca-Cola executive in Brazil, who was held for a $2.5 million ransom. Companies like Coca-Cola use K&R insurance to safeguard employees and mitigate risks in challenging environments. K&R insurance provides essential resources and support to handle these high-stakes situations effectively.
These unique policies showcase the insurance industry’s ability to adapt and create tailored solutions for even the most unexpected business risks. As companies face new challenges, insurance providers are constantly innovating to cover risks that might seem outlandish but are very real to those who face them. With the right insurance, businesses can pursue their goals confidently, knowing they’re protected against surprises—no matter how strange.
