Although arguably the most famous insurance company in the world, its influence widely noted throughout history, Lloyd’s of London is really not an insurance company at all. It is an insurance market, in which its brokers write policies in which syndicates and other parties (called names) share the financial risks of various ventures. Born in a London Coffee House in the 17th century, it remains steeped in tradition and history, though modern business practices have rendered many of its formal practices, if not obsolete, certainly quaint.
Over the centuries Lloyd’s has developed a reputation for integrity and for its ability and willingness to insure virtually anything. Since the 18th century ships ventured forth, investors in their voyages protected by the financial umbrella offered by Lloyd’s underwriters. The famed clipper ship Cutty Sark once sailed under Lloyds’ protection, in the 20th century a whiskey company of the same name used Lloyd’s to protect another venture, wholly different from the perils of the sea. Here are some of the more unusual, even bizarre, items insured by the venerable Lloyd’s of London, and some examples of the company honoring the claims of the insured.
10. Body parts
A wise craftsman recognizes the role of his tools in achieving success. In the case of Keith Richards, guitarist and songwriter for the legendary band the Rolling Stones, his hands are tools critical to his storied career. Gnarled, twisted, scarred, and arthritic, Richards’ hands are insured by Lloyd’s, and according to then President of Lloyd’s North America Hank Watkins (2016), had been for a long time. Insuring body parts critical to success is nothing new. During World War II actress/dancer Betty Grable, who displaced Rita Hayworth as the number one pin-up girl among American soldiers and sailors, insured her legs for $1 million. “I have got two reasons for success and I’m standing on both of them”, Grable said.
Irish dancer Michael Flatley insured his legs too, though not for the same reasons as Betty Grable. Lloyd’s covered the risk. They also insured singer Tom Jones’s chest hair, in case it should somehow be lost, adversely affecting his earning ability. Bette Davis, whom singer Kim Carnes lauded for her eyes, chose instead to insure her waistline (21”). Dolly Parton was long reported to have insured a pair of assets through Lloyd’s, though she later denied the claims. She explained them as a rumor arising over comments she made regarding Grable’s famously insuring her legs. Tom Jones likewise denied his chest hair was insured, though as a publicity stunt one never knows.
9. Automobile insurance
Though other insurance companies dispute them, Lloyd’s claims to have issued the first automobile insurance policy in 1904. At the time, the item being insured was described, not as an automobile, but as a “ship navigating on land”. That phrase was used to describe the subject of the policy, which was identified as a motor car. Yet according to the Insurance Journal, Travelers Insurance sold an automobile insurance policy to a Dr. Truman Martin of Buffalo, New York, in 1898. Dr. Martin owned one of the approximately 4,000 “motor cars” on American roads at the time.
Another source assigns the first auto insurance policy to Travelers, but claims it was issued in Dayton, Ohio, in 1897, providing automobile owner Gilbert Loomis with $1,000 in liability coverage. Travelers’ website claims its first policy in 1897 without specifying where and to whom it was issued. So, who knows?
Lloyd’s, justifiably famous for marine insurance at the turn of the 20th century, resorted to nautical language in its early non-nautical policies, and in 1910 formed the Non-Marine Underwriters Association to address the emerging markets of automotive and aviation insurance. In 1919, Lloyd’s underwriter Cuthbert Heath formed the British Aviation Insurance Association. In 1927 Heath wrote a policy for Lloyd’s covering Charles Lindbergh’s New York to Paris flight. The early aviation insurance policy would have provided its beneficiaries $18 thousand, had Lindy not proved so Lucky.
8. Bruce Springsteen’s voice
Whether one is a fan of the Boss or not, one is likely to admit his singing voice, while distinctive, does not rank with the great voices of all time. Pavarotti he is not. Nor Sinatra, though Bruce is reportedly an unabashed fan of his fellow Jersey boy. Springsteen’s reputation was built through his hard-working, hard-rocking, E-Street Band, and his songwriting, with its empathy for the common man.
Rolling Stone magazine called Springsteen the “Voice of the Decade” in a retrospective article published in November, 1990, though they referred to his message rather than his singing voice, which could hardly be called mellifluous. Regardless, Bruce Springsteen’s voice was insured by Lloyd’s against the possibility of loss or damage which would inhibit his singing.
The Boss is certainly not the only performer to insure his vocal cords against potential loss of singing ability. Rod Stewart, Bob Dylan, and Mariah Carey all allegedly insured their voices; in the case of the latter she also insured her legs. Evidently Pavarotti did not purchase voice insurance, strangely, since as a young man he sold insurance, in part to help pay for voice lessons.
7. Troy Polamalu’s hair
Troy Polamalu, though of American Samoan descent, was born and raised not in that US territorial possession but in Southern California and Oregon. He excelled in football (as well as basketball) in high school and entered the University of Southern California in 1999. At some juncture during his college career he quit having his hair cut. He drew sufficient attention from the NFL to be chosen in the first round of the 2003 draft, the 16th overall pick, by the Pittsburgh Steelers.
Beginning in the 2003 season, Polamalu drew attention for both his on field performance and for the steadily increasing length of his hair. He claimed to have not had a haircut since 2010. His growing hair and notoriety as a hard-hitting defensive back led Head and Shoulders Shampoo to hire Polamalu to market their product in television and print commercials. In 2010 Proctor and Gamble, manufacturer of Head and Shoulders products, insured Polamalu’s hair for $1 million with Lloyd’s.
According to the Guinness Book of World Records, the amount of insurance on Polamalu’s locks was a world record. In 2013 the football star dropped Head and Shoulders and endorsed a competitive product. He later returned to endorse the Proctor and Gamble product, though whether his Samoan Warrior hairstyle remains insured by Lloyd’s is uncertain.
6. The Taylor-Burton diamond
During their high-visibility relationship, which included two marriages and divorces, numerous public squabbles, and more than one interloper on both sides, actor Richard Burton became notorious for the jewelry which he lavished upon Elizabeth Taylor. There were many stunning pieces. In 1968 he gave Taylor a 33+ carat diamond, formerly owned by Vera, wife of steel magnate Alfred Krupp. That rock was more or less daily wear for the actress. She wore it set as a ring, usually on her right hand.
The most famous of the diamonds given to Taylor by Richard Burton was the stone known as the Taylor-Burton diamond, 69.42 carats, which he acquired in 1969. Burton had the diamond fitted into a necklace, in part to help cover Elizabeth’s tracheotomy scar. Ms. Taylor deemed it appropriate to wear at the 40th birthday celebration for Princess Grace of Monaco. She thoughtfully wore the Krupp diamond as well, no doubt in Princess Grace’s honor. The Burton’s took out insurance on the mammoth stone, through Lloyd’s, which added stipulations to its wear in public.
Lloyd’s stipulated the diamond could only be worn in public when armed security guards were available, and limited its number of appearances per year. The stone was insured for $1 million. After acquiring the diamond Taylor and Burton were divorced, subsequently remarried, and divorced a second time. Following the second divorce Taylor sold the diamond in 1979 to a New York jeweler.
5. The Hindenburg
The German airship Hindenburg is primarily remembered today for the dramatic manner in which it blew up in Lakehurst, New Jersey, in 1937. It did so on film, accompanied by a frantic broadcast describing its destruction, and is since a symbol of complete disaster. The incident was doubly stunning because up until then, Hindenburg had a reputation of reliable and comfortable transatlantic transportation, rivaling that of ocean steamers in comfort, but considerably faster. The preceding year, its first in scheduled service, Hindenburg made 10 crossings of the Atlantic without incident. Airships seemed poised to claim a prominent share of transatlantic traffic.
Although heavier than air service was much faster than the airships, with Pan American Airways flying their Clippers from Europe to the United States, the airships offered luxurious accommodations the airplanes could not. Germany’s Zeppelin Airline Company operated two zeppelins between Europe and the Americas before the Hindenburg disaster, which along with German aggression in Europe spelled the end of commercial lighter than air passenger flights. The 36 dead from the Hindenburg disaster, the exact cause of which has never been determined, were the only casualties of the transatlantic airship era.
The Germans had insured their operations through Lloyd’s, appropriately since they followed a model built around maritime operations. That itself is no surprise given the British company’s long experience providing transoceanic insurance. Despite the lack of a finding of liability for the disaster, Lloyd’s paid the claims for the loss of the Hindenburg, almost $80 million in today’s dollars. A copy of the ten page insurance document can be seen at the New York City Fire Museum in Manhattan.
4. America Ferrera’s smile
Actress America Ferrera first achieved fame for her portrayal of Betty Suarez in the television comedy Ugly Betty, a role she held from 2006 through 2010. Among the affectations of the role were unkempt hair and eyebrows, and the scourge of teenage dental care, a full set of braces. Betty, though, was not a teenager, but a young woman in her early twenties, trapped by her job in the world of high fashion.
Despite her appearance in her role as Betty Suarez, or maybe because of it, America Ferrera found herself in demand for an advertising campaign for a teeth whitening product in 2008. Aquafresh White Trays, manufactured by GlaxoSmithKline hired Ms. Ferrera to model her smile, sans Betty’s braces, with a portion of the profits going to Smiles for Success, which supports women unable to afford dental care. To minimize the risk of losing America’s smile, it was insured, for $10 million.
To provide the insurance the group turned to Lloyd’s, which underwrote the smile of an actress who gained her fame through a smile featuring braces prominently. The insurance covers the actress’s teeth and gums, and in essence provides her with full coverage dental insurance for the duration of the policy. Dental insurance is, after all, at least more commonly encountered than chest hair insurance, and it is really the association with Ugly Betty’s braces more than America Ferrera’s smile which renders the policy unusual.
3. RMS Titanic
In the 1997 film Titanic, a Renault automobile plays a prominent role. It serves as a place of, shall we say, temporary sanctuary for Rose and Jack while deep in the hold of the ship. There really was a Renault of similar appearance on the ill-fated ship, a luxury model known as Type CB Coupe de Ville, owned by William Carter. Mr. Carter survived the sinking of the Titanic, as did his family traveling with him. His automobile did not, though it served as the inspiration and scene for an impassioned handprint as the fictional version of the sinking began.
The real-life Mr. Carter filed a claim for the loss of his vehicle, with White Star Lines, owner and operator of the Titanic. They passed it on to their insurer, which honored the claim, as it did for all of the claims submitted in the aftermath of the loss of the ship. Mr. Carter received $5,000 in compensation for his lost car, paid to him by Lloyd’s, which had underwritten the vehicle through its insurance of the ship.
White Star paid a premium of roughly £7,500 ($1.13 million today) to ensure Titanic and its contents on its maiden voyage, the risk spread out among several of its syndicates. It paid out over £1 ($152 million) in the aftermath of the disaster, though pay it did, with nearly all claims paid in full within 30 days of the loss of the ship. The speed with which claims were paid is yet another stunning fact of the Titanic disaster, at least when looked at from the perspective of the 21st century.
2. The 1906 San Francisco earthquake
The 1906 San Francisco earthquake was much more than just a massive seismological event. It was an earthquake, of course. It was also a major urban conflagration along the lines of the more famous Chicago Fire. It was a complete breakdown of emergency services, an urban crisis in the days when the federal government had no means of rendering assistance beyond the use of the military. And many of the insurance companies providing coverage for damages in the region were financially incapable of honoring their obligations.
Even today most insurance policies do not cover earthquake damage. But following the 1906 San Francisco earthquake, Lloyd’s issued instructions (Cuthbert Heath again) to its syndicates to pay all claims for damages caused by the quakes and ensuing fires, “irrespective of the terms of their policies”. Many insurance companies went bankrupt rather than pay claims. Lloyd’s paid the equivalent of over $1 billion to claimants following the disaster in San Francisco.
Of course to refer to the event as the disaster in San Francisco is a misnomer, as the quake and its aftermath affected a huge swath of the United States from Oregon to central Nevada to Los Angeles. The San Francisco earthquake and fire of 1906 remained the single largest loss for Lloyd’s until the terrorist attacks of 9/11, after which payment of claims was considerably less streamlined. Even so. Lloyd’s response to the terrorist attacks earned praise from government officials, including American Secretary of the Treasury John Snow, who acknowledged, “We are indebted to you.”
1. Contests and rewards
Cutty Sark once ran a contest in 1971, offering £1 million to whomever delivered the (or a) Loch Ness monster. When executives raised concerns they may have to actually pay the award to some intrepid Nessie hunter they approached Lloyd’s to cover the award. Lloyd’s agreed, after specifying the dimensions of the captured animal, establishing its bona fides through the Natural History Museum, and establishing the captured monster would become the property of Lloyd’s. Nessie remains elusive more than fifty years later, the contest long since expired.
Lloyd’s has insured against paying out winners of other contests. Who Wants to be a Millionaire paid a Lloyd’s brokerage to cover the top prize, £1 million on the original, British version of the game show. At the time the program began airing in the United States the top prize had never been won. After two contestants won the American equivalent top prize of $1 million during the first season, the Lloyd’s brokerage group, Goshawk Syndicate, sued, claiming the US version had been deliberately made too easy to win. The American version was, to their minds, too easy for the brokers to assume the financial risks. Lloyd’s brokers were willing to assume reasonable risks, but evidently they saw no reason to be stupid about it.
As an example of the less challenging nature of the questions on the American version of the program the Daily Telegraph ran sample questions, including this from the US program: “Which condiment is also known as a Latin dance: mustard, mayonnaise, relish or salsa?” A cited question from the British version was, “What is the SI unit of magnetic flux density?” For those who need the answers they are, respectively, salsa, and tesla. Maybe Lloyd’s syndicate had a point.