Insuring Your Kids’ King-Sized Halloween Haul

With U.S. spending on Halloween candy projected to reach $2.6 billion this year, and Canada expected to surpass $1 billion, 2018 will likely be a record season for trick-or-treaters across the country.

A Confectionery Indemnification Policy (CIP) can help protect that bumper crop of candy. This new policy is available for kids ages 5 to 12, with consent from their parents, to cover the loss of candy as a result of theft, inferior treats, non-candy goods and other pre-defined exposures.

Consumers are also able to purchase the “Golden Ticket” upgrade to protect children who can provide evidence they collected an unusually high number of “low-quality” or “non-candy” items. Examples of low-quality candy would include candy corn, generic peanut butter cups, single sticks of gum, and anything that lists coconut as one of its top two ingredients. Qualifying non-candy items include apples, pencils, temporary tattoos, non-paper currency and toothbrushes.

“This is a policy that we believe will be in high demand this year due to the upswing in the economy. Sophisticated trick-or-treaters will be looking to protect their candy haul.” – Bill Gatewood, Burns & Wilcox

“This is a policy that we believe will be in high demand this year due to the upswing in the economy. Sophisticated trick-or-treaters will be looking to protect their candy haul,” said Bill Gatewood, Corporate Vice President and Director, Personal Insurance, Burns & Wilcox. “I could have spent a lot of time and money analyzing actuarial data to develop this product, but I didn’t.  My gut tells me that children in our target demographic have a natural appreciation and fascination with insurance. This is a can’t-miss product.”

Policy costs meet virtually any allowance budget

The CIP is available for $10, or five weekly installments of $2 in allowance payments, which can be withdrawn from a parent’s banking account or turned over to a broker or agent in rolled coins. That $10 provides limits up to $250 in direct loss. Policyholders wishing to make a claim need only prove they made a “good faith effort” in their neighborhood canvasing by knocking on a minimum of 100 homes or apartments.

“I could have spent a lot of time and money analyzing actuarial data to develop this product, but I didn’t.  My gut tells me that children in our target demographic have a natural appreciation and fascination with insurance. This is a can’t-miss product.” – Gatewood

Proof of “low-quality” or “non-candy” items must also be provided; photos of those items can be tweeted or snapped to a child’s insurance broker or directly uploaded to a cloud-based mobile app, developed specifically for this product.

“We have invested heavily in technology to create a great user experience for our clients,” Gatewood said. “We have also hired and trained an army of adjusters who graduated from high school within the last year to review claims because they have the most recent trick-or-treating experience.

“These kids are the most tech savvy and social media experienced talent pool ever assembled by an insurance organization.”

The policy excludes direct loss due to illness, since the flu is now in season and flu shots have been proven to not always work. The CIP only covers traditional trick-or-treating on Oct. 31, and children will have to sign an affidavit in crayon that their claim relates to candy collected on that day. No policy is without exclusions and the CIP does not provide coverage for Halloween-related events such as hay rides or “trunk or treats” hosted by churches, schools or community centers.

While some National Consumer Protection groups are calling for an expansion of the age restriction, CIP only protects those between 5 and 12, especially in light of some communities banning trick-or-treating for teenagers. “This is a cutting edge product and we want to make sure we’re in step with national trends being set for Halloween commerce,” Gatewood said.

Extra protection against family shenanigans

In another industry-leading move, the CIP will also provide protection for one of the most common perils facing trick-or-treaters every year. For an additional $1.25, a Family Theft Endorsement can be added to cover the cost of candy stolen by parents or siblings. This coverage includes protection against treats lost during fraudulent “Candy Inspections” conducted by parents who are shown to be simply skimming the best candy from the policyholder’s collection bag.

If a family candy theft occurs, the policy provides trick-or-treating victims a separate legal expense limit of $50 to cover costs related to obtaining a police report and a restraining order on the suspected thief or fraudster, which is required to trigger coverage. Gatewood suggests checking local ordinances to see if such a restraining order is available in your area.

“Oddly enough we haven’t sold any of the Family Theft Endorsements yet,” Gatewood said. “We’re wondering if the issue is related to the parental approval requirement. Parents may be hesitant to approve this enhancement if they themselves have nefarious intentions.”

Choose your costume wisely

Trick-or-treaters dressed in controversial or under developed costumes may find themselves without coverage if they violate the policy’s Apparel Standard of Care Warranty. Dressing up as a known political figure, a member of a rival team, or wearing a costume that demonstrates “a clear lack of planning and effort” may adversely impact the amount of candy received at any given house, Gatewood said.

“A policyholder dressed in a Boston Red Sox uniform trick-or-treating in New York is just asking for trouble,” he added.

Children whose costumes appear to lack creativity could also be excluded. “Our intent isn’t to provide coverage for clients who simply throw on jeans, a flannel, put dirt on their face and call themselves a hobo,” Gatewood warned. The CIP also excludes product defect coverage to avoid paying claims for the single-staple rubber band mask malfunctions that are so prevalent every year. “This issue has plagued Halloween celebrations for decades and it isn’t something the insurance industry should be expected to fix,” said an obviously agitated Gatewood.

“If you know your costume is likely to result in a predictable decline in candy or invoke some other adverse reaction in treat providers, my advice is to go back to the drawing board,” Gatewood said. “I cannot overstate the importance of children working with their professional risk manager before making a final costume choice. You don’t want to find out on Nov. 1 that you don’t have coverage because you took shortcuts in the purchasing process.”

This information was provided by Burns & Wilcox, North America’s leading wholesale insurance broker and underwriting manager. While Burns & Wilcox does offer a full range of insurance products for homeowners and businesses, the Confectionery Indemnification Policy is NOT actually available. Happy Halloween!

Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent to review any insurance policies you do need to ensure you have proper protection.