by ACM General Counsel Amanda Luby, Published on the March/April 2024
Not entirely distinct from the well-publicized homeowners insurance crisis that Florida is currently experiencing, Florida businesses are experiencing their own insurance nightmare. This insurance plight has brought with it rising premium rates and reduced coverage, exposing businesses to losses and thinner profit margins. Policy enthusiasts can debate the underlying cause of these rate increases, but the fact remains that it is becoming harder for businesses to protect themselves from fortuitous, sometimes catastrophic losses.
There is a solution, however, that most Florida businesses and their legal counsel have never heard of: captive insurance. Historically, the captive insurance industry has not done a very good job of marketing itself outside of the insurance sector. However, in today’s ever-hardening commercial insurance market, captive insurance companies can become life-savers for middle-market businesses. Lawyers who represent such businesses, regardless of the industry, need to understand why and how captives can help their clients.
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