In a webinar on April 8 designed to educate brokers and other advisors about the advantages of captive insurance, Management Services International (MSI) warned many businesses with business interruption coverage written by commercial carriers would be exposed to significant uninsured losses.
MSI noted that business interruption resulting from the loss of key customers, the loss of key suppliers, regulatory changes and supply chain interruptions could all potentially cause significant losses for businesses.
Because these disruptions are not associated with physical damage, most businesses suffering such losses will not be covered by most business interruption policies sold in the commercial market, MSI said.
Businesses that selected and paid premiums for business interruption insurance written by their captive would in most cases be eligible to file a claim. The only exclusion is likely to be for losses arising from the violation of any applicable criminal law, it said.
MSI described captive insurance as “a kind of safety blanket” that could fund potential losses when gaps exist in commercial policies, when commercial policies are unavailable, or when a business wants to buy tailored insurance coverage.
MSI said the webinar had been well attended, with attendees spending 15 minutes after the presentation asking questions. “When attendees ask questions, that means we have done a good job presenting,” said John Dohn, MSI’s national sales manager and one of the presenters of the webinar.
John Dohn, Management Services International, MSI, Business interruption