Just in Case: Speciality insurance a $140B niche market

From legs to Lamborghinis, beards to berettas and wine to weddings – if it has value, you can insure it. Most people are familiar with standard insurance policies, such as auto, home, life and health, but what about those special treasures and moneymakers that don’t fit the mold?

“Specialty insurance has been around a long time,” said B.J. Joplin, president of Gibson & Associates Professional Claims Management Inc. “Folks that rely on a body part to make a living, for example, can take steps to protect it.”

Online trade publication Industry News Net pegs the specialty insurance market in the $140 billion-$180 billion range annually. That figure can be hard to pin down, though, as there is no standard definition. Specialty insurance includes high-hazard insurance, nonstandard general insurance, niche market segments, bespoke underwriting and excess and surplus lines insurance.

Joplin is a third-party administrator for Lloyd’s of London, the self-regulating specialist insurance market founded in Britain during the seventeenth century, famous for insuring celebrity body parts. Joplin recalls a London colleague involved in a claim when a member of Kings of Leon had to go into rehab canceling a number of concerts and another involved in the legal battle following Michael Jackson’s death.

“We don’t really get into the body parts around here,” Joplin said. “I would expect the typical policies to revolve around high-value items or collections like guns, jewelry, art, horses and cars.”

One of the area’s largest specialty car collections belongs to longtime Springfield businessman Guy Mace, who has policies covering his entire 65-car fleet.

“Each individual car is insured, and it’s come in handy, too,” Mace said. “I had a car totally destroyed in a rally in Chattanooga, (Tenn.) and was paid the full value.”

Mace uses classic car specialist Hagerty Insurance Agency LLC for his fleet. The Michigan-based company covered the 1971 Buick Skylark lost in Chattanooga and a claim on Mace’s most expensive car, a 1936 Horch 853 Cabriolet.

“I was rear-ended during a rally in Pebble Beach, (Calif.), and two years later it’s still undergoing repairs,” he said, declining to disclose the value of his collection.

Tangible objects and collections are easy to insure, but what about a wedding? Local agents say event insurance quickly is growing across the Ozarks, with event planners ensuring everything from a rainy wedding day to under-attended seminars.

“That would cover the cost of the event being canceled due to any number of reasons, said Darren Coffman, president of Springfield-based Benefits Unlimited Inc. “It may be used to cover the cost of the facility or refunding the participants who were going to the event.”

Coffman’s also sold “hole in one” insurance on many occasions, covering any prize given away in a tournament.

“You get a new car with a hole in one, and then the policy covers the cost of the car for the sponsoring company or individual who hosts the tournament,” he said.

In many cases, specialty polices never are used, but if tragedy strikes, Joplin said they function similar to typical insurance policies.

“Terms and conditions always apply, but in these cases it could be pretty unique,” he said. “Say you ensured your hands, then cut your finger on a table saw. That’s probably in the list of prohibited actions and won’t be paid.”

What’s the value on a set of hands? Joplin says it depends on whose hands.

“They look at the earnings history and the earnings potential,” he said.

“Is it an exact science? I think it all depends upon the value of the object and the individual’s risk tolerance.”