It’s been said that there’s an insurance policy for everything and some may be tempted to believe that. Insurance policies are available for everything from body parts and alien abduction to ghosts and equine erectile dysfunction, but there are some things that insurance companies won’t insure.
Insurance companies consider some things too risky to insure. One of those are unique houses that can include non-traditional architectural features or that utilize new technology. The same is often true of experimental vehicles. Much depends on the insurer. Some are willing to take the risk, others aren’t.
Homeowners quickly discover that their insurance won’t insure them against flooding, earthquakes, landslides, mudslides, volcanoes, and infestations of insects and rodents. They also won’t provide coverage for intentional acts such as setting a home, vehicle or shed on fire.
There are five things that insurance companies consider almost completely uninsurable: reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk. A company’s reputation may suffer due to product recalls, items with faulty parts or equipment, and products that result in death. However, there are companies that may offer insurance for certain elements within each category.
Regulations in regard to products, data storage, banking and international commerce can change quickly. Insurers know this and consider coverage too risky to extend. In 2012 alone, there were nearly 18,000 changes to rules, laws and regulations. Rule changes can also encompass local ordinances such as the odors a business emits.
There are really no boundaries in regard to trade secrets. It’s extremely difficult to prove that a trade secret has been shared or infringed upon. There’s no telling when a hacker or foreign government may acquire access to a company’s data, or a disgruntled employee reveals information.
Political careers are uncertain at best. Politicians can make a single statement or mishandle an issue that results in being voted out of office. The world is an unsettled place and companies that operate overseas won’t be insured against damage from political upheaval.
Pandemics aren’t covered. Many individuals discovered during the COVID-19 pandemic that life insurance policies were worthless and insurers refused to pay out if the individual’s death was listed as COVID. The same was true of the H1N1 flu pandemic in 2009. Insurers don’t cover it for individuals or any type of business enterprise.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487