Bringing in the votes
AIG product protects political campaign committees
By Phil Zinkewicz
Every day, we read about the follies of national politicians and political candidates and/or their campaign committees. Depending upon our political persuasion, we either grind our teeth in frustration as we watch a member of “our party” being bedeviled, or chortle with glee as we see a player “on the other team” sometimes literally get caught with his pants down.
But that’s politics. We are now coming close to the home stretch in the presidential campaign. In the months ahead, there will be more fund-raising events, more speeches and more finger-pointing than we have seen thus far. Each candidate has employed thousands of volunteers and staff members to man telephones, walk the streets handing out flyers, write speeches and construct press releases. Candidates will need chauffeurs, chartered planes and rented vans to get from point A to point B. All of these activities can result in a situation in which a candidate or his or her committee may be held liable for a loss or injury.
We don’t often think of it, but politicos need special insurance coverages to protect against a variety of exposures that may arise during a campaign—automobile accidents, slip and falls, even identity theft. For example, earlier this year, New York City’s Mayor Michael Bloomberg was himself the victim of identity theft.
And, if one harkens back to the 1970s during the Nixon campaign against George McGovern, the so-called “dirty tricks” played by the Nixon camp—ordering thousands of pizzas and having them delivered to and charged to McGovern’s offices was one of their favorites—one can understand how candidates can find themselves unexpectedly liable for significant sums of money.
American International Group (AIG) has long been recognized as an innovator in terms of new product development such as kidnap/ransom and political risk insurance. Now comes a new product from AI Risk Specialists Insurance, Inc. (AI Risk), a wholly owned insurance brokerage subsidiary of AIG. AI Risk provides specialty property and casualty and personal lines insurance underwritten by Lexington Insurance Company and other AIG companies, and is a leading underwriter of program business.
Broad coverage
The new product, announced last September, is called LexElect. It is a multiline insurance program designed specifically to address exposures faced by U.S. Senate, U.S. House of Representatives and gubernatorial campaign committees. Karen O’Reilly, director of product development at Lexington, says that LexElect addresses many campaign risks by packaging a number of coverages into a single policy. Coverage includes general liability, hired and non-owned auto liability, host liquor liability, employment practices liability, employee dishonesty/crime, identity theft and property insurance.
“From a volunteer who mishandles sensitive non-public personal information of donors to an automobile accident that happens en route to a fundraiser, political campaigns face a wide range of potentially costly exposures,” says Ben Beauvais, vice president of AI Risk. “The vast majority of campaigns are uninsured, not because they consciously decide to forgo coverage, but more often because they don’t realize the risks or have time to shop for the various coverages they need. LexElect provides an easy and efficient alternative, giving principal campaign committees the coverage they must have.”
LexElect is available on a surplus lines basis in all states, and for the 2008 election it is offered through All Risks, Ltd. Premiums start at $5,000, according to O’Reilly, with $1 million and $2 million per-occurrence limits available for the package.
“We have received a good many insurance inquiries from politicians and have, over the years, even insured some presidential candidates,” says O’Reilly. “So we have experience in this area. Our current product is directed at national political candidates and committees, but by early next year, we intend to offer a similar product to smaller state and local races with different limits of coverage.”
O’Reilly says that LexElect covers up to 2,000 special events for each committee or candidate on the condition that these events do not consist of “high-risk” behavior. “For example, we would not cover events that would involve dangerous sporting activities or high-risk vehicles,” O’Reilly says. “In the past, political candidates and their committees had to insure these special events one at a time. By offering this package, we make it easier for the insured to cover all the events at once within the 2,000 limit. It’s a kind of one-stop shopping for the political arena.”
All Risks, Ltd., she says, is acting as a managing general agent in the sale of the product. Independent retail agents who have smaller, local political campaigns they need to insure will be able to go through All Risks, O’Reilly says.
“There is no question that we see significant opportunities for growth in this arena,” O’Reilly asserts.
For more information:
AI Risk
Web site: www.airisk.com