From: Captive International
“COVID-19 is as good an illustration as you could come up with to show that companies face risks out there that will not be covered by standard coverages,” according to Barbara Ingraham, managing director of excess and surplus at Verisk.
Ingraham was speaking on a Captive Insurance Companies Association (CICA) webinar titled “Emerging Risks and Captives”.
At the start of the year, companies considered their big emerging risks to be things such as cyber and climate change, said Steven Bauman, global programmes and captives regional director North America at AXA XL.
The big risk they are now all thinking about is pandemic coverage. “I have no doubt that captives will help a lot of companies manage that risk,” Bauman added.
While 831(b) captives have attracted a lot of negative publicity in recent months, they could be ideal structures for allowing companies to manage pandemic risk, said Chris Ervey, senior vice president at Trean Reinsurance Services.
Much has been made of the lack of pandemic coverage in commercial business interruption policies, but COVID-19 is not the only source of business losses that such policies may not cover.