Lloyd's of London is a meeting place for insurance brokers and underwriters. Brokers buy coverage on behalf of their clients from underwriters employed by insurance syndicates. The syndicates function like small insurance companies, issuing policies and paying claims.
Lloyd's bills itself as a "specialist insurance market" because each syndicate specializes in certain types of risks. Underwriters at one syndicate may be experts in insuring ocean cargo while those at another specialize in insuring jewelry.
While Lloyd's provides insurance for many run-of-the-mill business activities, the organization has a reputation for insuring unusual risks. Some of the most bizarre things Lloyd's has insured over the years are described on the company's website. Some examples are outlined below.
A celebrity may be famous for a specific body part such as a unique nose or cascading hair. A person who is not a celebrity may rely on a certain body part for his or her livelihood. When a body part is essential to a person's fame or fortune, he or she may go to great lengths to protect it. Here are some of the body parts that have been insured under a policy obtained through Lloyd's.
- Crossed Eyes Ben Turpin was a cross-eyed American actor and comedian in silent films. The actor considered his eyes to be his trademark feature so he insured them for $25,000. The policy provided payment only if his eyes became uncrossed. He eyes remained crossed so no payment was ever made.
- Nose A Dutch winemaker named Ilja Gort has a very keen sense of smell. Mr. Gort contends that his nose can sniff out millions of different scents. He considers his sense of smell so critical to his wine making abilities that he has insured it under a Lloyd's policy for 5 million euros.
- Smile GlaxoSmithKline, a pharmaceutical company, hired America Ferrera, an American actress, to promote a tooth whitening product the company manufactures. The actress promotes the product with her smile. To protect its investment, GlaxoSmithKline has insured the actress' smile under a policy it purchased from Lloyd's.
- Hair The manufacturer of Head and Shoulders shampoo has insured the hair of Troy Polamalu, a football player, for $1 million. The ballplayer, who has long, flowing hair, was hired to promote the shampoo. For any payment to be made under the policy, Mr. Polamalu must lose at least 60% of his hair in an accident.
Brave New World of Travel and Sports
Many new modes of transportation were invented in the twentieth century. Some modes of travel involved human power. Each of these inventions or feats created risks. The risk takers needed insurance but none was available from traditional insurers. Fortunately, Lloyd's stepped up and provided the policies.
- Auto Insurance Underwriters at Lloyd's issued the world's first auto policy (called a motor car policy) in 1904. The underwriters who wrote the policy were much more familiar with ships than the horseless carriage. The policy described the vehicle as "a ship navigating on land."
- Aircraft Insurance Lloyd's underwriters issued the first aircraft policy in 1911. The underwriters ceased writing the coverage one year later due to losses. Not surprisingly, planes crashed frequently back then. Underwriters finally resumed offering aircraft coverage on a regular basis in 1930.
- Swimming In 1926 an American named Gertrude Ederle insured her attempt to swim across the English Channel. A Lloyd's policy she had purchased paid her 1863 British pounds when she made it across the channel successfully.
- Spacecraft In 1965 Lloyd's issued the first policy covering a spacecraft. Underwriters insured the Intelsat 1, the first commercial communication satellite. The policy insured the satellite for physical damage.
Lloyd's syndicates have insured various other oddities. These include:
- Damage to beards insured against fire or theft
- Damage to a house caused by suffragists
- Death of a monkey used for entertainment
More information about the oddball things Lloyd's has insured is available at the Lloyd's website. A link is provided below.