Month: September 2013
insurance describes a situation or insurance model where a captive insurance company can be “rented” to provide the benefits enjoyed by standard captive setups without the management and overhead. Renting captives may be done for many reasons. Following are some of the primary benefits of this business insurance model.
Earned Investment Income
Companies that rent captives still receive all income from investments and underwriting profit—income that is typically retained by insurance companies directly.
Reduced Risk Management Costs
Companies that choose rent-a-captive can control the costs of their risk management programs. They can also reduce any after-tax cost of insurance or risk. Better management of insurance costs helps overall business finance processes.
Increased Coverage Flexibility
Companies with captive insurers can have greater flexibility in their insurance options, selecting only the coverage they really need or adding special endorsements they may wish to have.
Who Can Benefit From Renting A Captive?
The rent-a-captive model is well suited to larger companies that have a high level of financial independence but that are not quite able to form their own captive or that simply do not wish to take on the formative and operational costs and management of another entity. Organizations that operate in multiple states may also benefit from this program as they can select one common set of coverage options to meet varying state standards (as opposed to carrying multiple policies in different states).
At an institution of advanced learning, the administration naturally wants the focus to be on the quality of the classroom experience, the opportunities provided to incoming students, and how their lives will be forever enriched for attending the campus for the next four years. Imagine, then, what a nightmare it was for one very prominent university when faced with a dangerous development: a rapist was attacking coeds walking back to their dorm rooms late at night. Campus Security quickly beefed up patrols, offered escorts to young women and cautioned them against walking or biking alone at night in particular. The campus was closed to all but staff and students after dark, and tall fences were erected around the perimeter of the dorms. Eventually the attacker was caught, but not before several students withdrew from the school, their parents no longer trusting the environment or the school’s ability to keep their children safe—and not before the victims’ families filed a lawsuit against the school, triggering a higher education insurance claim.
Then, a year later, scandal rocked the school again—this time on an international basis, when two foreign students—a young man and a woman–who were walking across a busy boulevard adjacent to the campus were struck and killed by a speeding car. To make matters worse, eyewitnesses reported that the hit-and-run driver had actually stopped just long enough to dislodge one of the students from the hood of the car where his clothing had become caught in the windshield wipers! The students lingered in the hospital for days with major internal bleeding before succumbing to their injuries. The heartbroken parents of the children flew to the American university, outraged that such a thing could happen to their children and demanding that the perpetrator be found. The parents sued the school for failure to provide a safe environment for their children, and the case is still pending. In the meantime, the school continues to hunt for the identity of the driver of the car, and has installed flashing lights illuminating the pedestrian crosswalk where the students were struck; other safety measures are in the works. Still, no matter what the school implements from this day on, the fact remains that the students are gone forever, and the school will likely be battling in court for years regarding charges of liability for the student’s death.
There simply is no measure for human loss. However, from a financial standpoint, this sort of catastrophic loss can be mitigated with the appropriate type of higher education insurance. Talk to a professional insurance agent to learn more about how your institution can be well served with this kind of protection in place.
Staying in the house, all snug and warm, watching classic movies and enjoying freshly baked cookies while a summer storm rages outside might be one of your favorite ways to while away a lazy afternoon. But what about when lightning accompanies the rain? Things can get dangerous fast. In fact, nearly 60 people are killed by lightning each year in the U.S. And in the Sunshine State last year, five people lost their lives due to lightning-related reasons. And although direct hits from lightning are rare, according to industry experts, lightning strikes amounted to almost $800 million in damage claims for nearly 200,000 homes in one year alone. Fortunately, standard homeowners insurance in Florida covers damage from lightning (including fire), and some policies also cover damage from electrical power surges caused by lightning.
Talk about the power of Mother Nature–a lightning bolt can produce temperatures of 50,000 degrees Fahrenheit. That’s enough to fry just about anything in your house. A bolt can enter through any kind of wiring (e.g., cable TV, electric lines or phone lines) to electronic and other delicate equipment, even set your home on fire, unless you have a lightning-protection system in place. Many are surprised to hear that lightning can also travel through plumbing pipes and water, including water in a bathtub or coming out of a shower head.
Crack of thunder, bolt of lightning—then fire!
That’s what happened at the Millers’ Miami homestead last month, when a bolt of lightning streaked through the roof of their two-story home and ignited a huge collection of Christmas décor stored in the attic. Quick action from the fire department saved the house, but a significant amount of damage was done by the fire as well as the smoke and water. Fortunately, the Millers were protected by a homeowners insurance in Florida policy that covered the bulk of the costs to repair their home. Talk to an agent today to learn about how this important policy can offer shelter from the storm.