Insurance and the Long Horizon of the Estate
Insurance is not a commercial detail but a quiet act of stewardship. We consider the thoughtful approach by which a serious estate prepares for the misfortunes the principal hopes never to need.
There is, in our experience, a particular category of household administration which the principal is sometimes inclined to delegate to the most junior member of the office and to think no more about. Insurance, in nearly every household of any seriousness, sits in this category, and it ought not to. The arrangements protecting the residence, the collections, the staff, the family, and the principal’s wider responsibilities guard against misfortunes the principal hopes never to encounter. When properly speaking, they are among the more unobtrusive acts of stewardship the principal undertakes on behalf of the next generation.
We are sometimes engaged to review the insurance arrangements of households where the existing cover has, over time, drifted into disrepair. The drift is rarely the result of any single oversight; it is the cumulative effect of the residence having been improved without the schedules being updated, of acquisitions having been made without the relevant insurer being informed, of staff arrangements having evolved without the cover for them being adjusted. The household discovers, on the morning a misfortune actually occurs, that the cover the principal believed they had is in important respects not the cover they have.
We counsel that any serious household maintain, as a matter of standing discipline, an annual review of the insurance schedules covering each significant residence, each collection of value, the principal's flight and marine arrangements where these exist, and the household's employment liabilities. The review is conducted, in the well run office, by the chief of staff or the family office's senior administrative officer, in thoughtful conversation with the broker who knows the family's affairs in detail. The review is not a formality; it is the moment at which any drift in the cover is identified and corrected, and at which the principal is made aware, in writing, of any matter which warrants their personal attention.
Insurance is the quiet promise the thoughtful principal makes to a misfortune they do not intend to allow to ruin the family.
The broker who handles the affairs of a serious family is, properly understood, a counsellor rather than a vendor; a long career professional whose knowledge of the family's establishments and obligations is the foundation on which the cover is patiently constructed. We counsel principals to engage a single broker of established reputation, to conduct the relationship with the seriousness it deserves, and to resist the periodic temptation to put the household's cover out to commercial tender. The saving from such an exercise is, in our experience, modest; the loss of accumulated knowledge of the family's affairs is, in important ways, considerable, and is not recovered for several years after a change of broker.
We close on a point about discretion. Insurance schedules contain, by their nature, a great deal of information about the family's possessions, residences and arrangements which the principal would not wish to be widely known. The broker of the right standing handles this information with the thoughtful discretion the family expects of any senior professional in its service. The household which has earned the trust of such a broker has, in this small respect, given itself one fewer matter to worry about across the long horizon of the estate.
OfficeThe Desk as Seat of Government
The principal's private office is the room in which the day's most thoughtful work is done. We examine the small disciplines of the desk by which the well ordered week is quietly composed.
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