Policy Exclusions Put Your Business At Risk
Captives Provide Flexibility to Customize Coverages
Traditional insurers often rely on policy exclusions, which create uncertainty among insureds regarding whether the claim will be paid. In contrast, policies issued by captive insurers can be custom-designed tomore clearly delineate coverage and to eliminate holes in conventional insurers' policies. A captive can provide cost-effective coverages which are not readily available in conventional markets. In some cases, the captive's policies are designed to specifically take over when the conventional carrier denies coverage on the underlying policy.
A captive insurer offers considerable flexibility. It may provide primary coverages, or it may just insure the policies' exclusions. The client often keeps much of its conventional insurance in one place, using the captive to cover the "expectation gap," that is, where the exposures that were thought to be covered by insurance, in fact, are not covered by the conventional carriers. Our middle-market clients want to protect their significant businesses with tailored, comprehensive insurance coverages. If the conventional markets are not providing the needed coverages, these are provided by the captives.
Capstone concentrates on the largest growing segment of alternative risk planning: captives for closely-held, non-public companies with substantial operations. Our clients' captives generally insure certain risks through their captive, and insure other risks through the conventional market. Itis no surprise that up to half of the total property and casualty premiums paid in the U.S. are written through a captive or other alternative risk planning arrangement.
Very truly yours,
Stewart A. Feldman, CEO Capstone Associated Services, Ltd (713) 800-0550
