Types of Coverages

Industries such as self-storage facilities, dry cleaner chains, and real estate face environmental risks that are not obvious and are often overlooked. Middle market businesses subject to uncommon environmental risks that may lead to significant losses could benefit greatly from the cost-effective risk coverages afforded through a captive insurance company.

In this synopsis of a recent Milliman white paper exploring the deterioration in general liability claims costs and the potential impact on captive insurers, we also offer some basic suggestions to captives on how to address this problem.

US Department of Labor (DOL) suspension of a regulatory procedure employers have used for years to get expedited DOL review of their applications to fund employee benefits through their captive insurance companies is continuing, while regulators are circulating new captive benefit funding requirements.

Over the past several years, a number of independent reports have been published detailing the biggest, most egregious risks facing businesses. Whether we're talking about a "top 10" list or a "top 5," the real constant across the board was business interruption and its devastating impact. Find out how captive insurance can help.

Workers compensation large deductible plans provide up-front premium savings for organizations. Some organizations choose to maximize the financial benefit by utilizing a captive insurance company to insure the large deductible.

Breaking down claims data silos to bring various data sets together in healthcare systems requires a systematic approach, according to a panel of experts who recently spoke at the World Captive Forum.

While only a sliver of captive insurance companies fund their parents' employee benefit risks, the number is growing as more companies understand the advantages of that approach, experts say.

Mark Sims of Captive Alternatives advises that health insurance is one of an employer's biggest expenses. Many businesses are looking to use their captive insurer to help control healthcare costs. With captive insurance, the employer can prefund, into their captive, premium to cover their claims responsibility within the "specific deductible."

Michael Maglaras, principal of Michael Maglaras & Company, says that we have been insuring bad behavior in the commercial insurance market and in captive insurers for many decades. In this video, Mr. Maglaras raises questions and explores ideas around sexual misconduct, sexual abuse, sexual intimidation, and captive insurance.

Mark Sims, vice president of business development at Captive Alternatives, LLC, says businesses want to know what type of risks they can insure inside their own captive insurance company and are often concerned about enterprise risks such as loss of a key customer, weather-related events, data breaches, or cyber attacks.

The cost of extreme, or catastrophic, professional liability claims is increasing at a rate higher than typical self-insured claims, which are trending at 2 percent annually, according to the Aon/American Society for Healthcare Risk Management Hospital and Physician Professional Liability Benchmark report.

Fitch Ratings findings show that the US medical professional liability insurance sector experienced underwriting losses again this past year, placing more scrutiny around shrinking reserves.

Dot Foods Inc. is the latest employer to seek federal regulatory approval to use its captive insurance company to fund employee benefit risks. In a filing with the US Department of Labor (DOL), Dot Foods says it wants to use its captive insurer to reinsure voluntary accident and critical care coverages.

Michael Maglaras, principal of Michael Maglaras & Company, suggests the time has come to insure direct statutory workers compensation in captives on a nonfronted basis. This means the program is underwritten, funded, and managed directly through a captive insurer where the policy is issued directly on the captive's paper.

Principal and Consulting Actuary Rob Walling of Pinnacle Actuarial Resources, Inc., says that trucking insurance captives are an example of a specialized industry that requires specialized care. In a number of industries and coverages in the captive insurance space, such as trucking, an actuary cannot simply dabble.

Captive insurance consultant Michael Maglaras & Company and Assurance Agency have launched the AssureCap Advantage captive program, designed to meet the insurance and risk management challenges of the senior care industry.

Based on its latest global employee benefit research findings on medical trends around the world, Mercer Marsh Benefits advises that adopting integrated health and well-being strategies underpinned by stronger digital and data capabilities will be critical in managing the rising costs of employee health benefit programs.

The insurance market for the legal cannabis industry is still quite fluid, with changes happening every day. Cannabis businesses are currently unable to obtain adequate and affordable insurance protection in the market, and captive insurance may be able to provide the solution.

According to Rob Walling, principal and consulting actuary with Pinnacle Actuarial Resources, Inc., technology is playing an exciting role in captive innovation and formation. Captive formation is stemming from insurtech activity, such as on-demand insurance running through smart phone technology as well as from a variety of disruptive technologies.

A captive insurer should have business interruption coverage, as should its members. Editor John Foehl reviews basic questions for consideration when buying or providing coverage for business interruption insurance in this basic primer for captive insurers.