Captive Insurance and Construction: Alternative Risk Structures, Pros and Cons, Key Provisions

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Real Property - Transactions
- event Date
Tuesday, August 6, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will provide an in-depth look at the use of captive insurance in the construction industry where companies are looking for alternative risk structures to increase control and flexibility of their insurance programs. The panel will discuss common uses of captives as well as the potential risks and benefits for construction clients. The panel will also offer best practices for structuring key provisions.
Faculty

Mr. Mead is a well-recognized veteran of the captive profession. He was the former President of the Missouri Captive Insurance Association, past Director and Chair of the Captive Insurance Companies Association, past Director and President of the Arizona Captive Insurance Association, past Director of the Captive Insurance Counsel of the District of Columbia, and past Director and VP of the Insurance Center for Captive Insurance Excellence, where he is an instructor. Mr. Mead is a former underwriter with a major global insurer and executive with a major global broker and is Editor of Captive Insurance Company Reports.

Mr. Nowakowski advises businesses on risk management strategy, alternative risk financing, regulatory compliance, and general corporate governance. He assists clients on captive insurance and alternative risk financing matters, feasibility studies, formation, and ongoing representation of captive insurance companies; provides recommendations regarding captive domiciles, ownership structures, insurance policy provisions, funding approaches, and inter-company agreements from a legal and regulatory perspective; counsels captive insurance companies on tax and regulatory issues associated with ongoing operations; assists clients in restructuring of insurance programs, including mergers and acquisitions of captive insurance companies; negotiates insurance business agreements; and reviews, interprets and drafts insurance policies, including analysis and questions of coverage.

Mr. Sherman is an experienced construction attorney with significant construction transactional, consulting, and litigation experience. In this capacity, he assists construction project owners, developers, general contractors, construction management firms, subcontractors, and material suppliers with real-time project consulting, drafting and negotiating all manner of construction agreements and forms, and with prosecuting and defending construction disputes. Mr. Sherman is a frequent lecturer on insurance law matters.
Description
Construction industry companies are increasingly using captive insurance as part of their risk management strategy including the use of captives for wrap-up--e.g., owner-controlled and contractor-controlled insurance programs (OCIPs and CCIPs), as well as subcontractor default and environmental policies. Much of this increase is driven by the desire to control costs.
Captive insurance offers the flexibility to manage an organization's unique risks while also providing value to the company's bottom line with better control over premium costs and the possibility of a positive return on premium investments. The structure can take the form of a single parent, group/association, or segregated protected cells, among many others.
When assisting construction clients with creating risk management strategies, counsel should understand the risks and benefits of captive insurance and how it compares to and interacts with more traditional types of insurance used in the construction industry.
Listen as our expert panel provides an in-depth look at the use of captive insurance in the construction industry, discussing common uses as well as the benefits and risks to clients. The panel will also address regulatory concerns and offer best practices for structuring key provisions.
Outline
- Overview of captive insurance
- Types of captives
- Common uses
- How a captive operates
- Who should consider using captives
- Benefits and risks to construction clients
- Comparison to and interaction with "traditional" types of insurance
- Regulatory considerations
- Structuring key provisions
- Practitioner takeaways
Benefits
The panel will review these and other key considerations:
- Why should construction entities consider the use of captives?
- What types of risks can a captive insure?
- How can counsel best incorporate captive programs into a client's overall risk mitigation/management scheme?
- What are some common pitfalls in structuring captive insurance programs?
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