No. Although there are potential estate planning benefits that arise from ownership of a reinsurance company, that alone is not adequate to justify the formation of a reinsurance company. The decision of whether to form a reinsurance company is focused solely on the management of business casualty risks, not other [...]
The benefits of forming a reinsurance company include better control of risks, an incentive to control losses, access to expanded insurance coverage, diversification of risk, enhanced capacity to honor warranties and the establishment of a fund for potential future casualty losses.
Should I cancel my existing business casualty policies after the supplemental casualty insurance and policy is issued?
No, do not cancel your existing business casualty policies. They are still important for your protection and management of your business risks. Coverage provided by the supplemental casualty insurance and reinsurance will complement your commercial business casualty policies. The supplemental insurance can fill the gaps arising from deductibles, exclusions, and [...]
An independent actuary will review the risks and exposures to determine which risks are appropriate for captive insurance. The actuary will determine the appropriate amount of premium for each risk being insured. A report will be issued by the actuary detailing the risk analysis.
Risks that can be considered for supplemental insurance and reinsurance must be business casualty risks. Personal risks cannot be covered by business casualty policies. Employee risks, such as disability, cannot be covered since this is personal in nature. Additionally, routine business decisions cannot be insured as casualty risks. These would [...]
Risks that can be considered for supplemental insurance and reinsurance must be business casualty risks that cannot be adequately covered by regular commercial insurance. These risks include—but are not limited to—the following: Brand protection Business interruption Construction defects Crop Cyber risk Data Breach Deductibles Employment practices Exclusions in policy Food-borne [...]
What are the types of businesses that can benefit from the use of supplemental business casualty insurance and reinsurance?
Supplemental business casualty coverage complements the existing business casualty insurance of a business. Any operating business that has casualty risks that cannot be adequately covered with regular commercial insurance can consider supplemental coverage and reinsurance. The use of business casualty insurance and reinsurance spans all types of businesses and industries [...]
Captive insurance involves the formation of an insurance company that can directly insure business risk. A captive insurance company is essentially an insurance company in form and in fact. This brings all of the complexity of an insurance company that is licensed to issue policies directly to an insured business. [...]