The COVID-19 Pandemic: Connecticut Health Care Providers Seek Innovative Captive Solutions for Business Interruption Coverage
As Connecticut health care facilities rise to meet the challenge of the COVID-19 epidemic, they are suffering significant loss of revenue as they reallocate resources to dealing with the outbreak. Captive insurance industry veteran, Michael Maglaras, principal of Michael Maglaras & Company, is working with health care captive owners in Connecticut as to how they might be able to access excess surplus in their captives to augment property coverage availability.
ASHFORD, Conn., April 11, 2020 /PRNewswire-PRWeb/ -- "As Connecticut health care facilities rise to meet the challenge of the COVID-19 epidemic in Connecticut, these health care facilities are suffering significant daily loss of revenue as they reallocate resources to dealing with the outbreak...at the expense of ambulatory and elective surgery revenue," said captive industry veteran Michael Maglaras, Principal of Michael Maglaras & Company.
Property policies written for health care institutions frequently contain broad limitations on business interruption coverage caused by the cascading effect of dealing with the coronavirus and other losses stemming directly from disease contamination.
Maglaras added, "We are already fielding questions from our health care captive owners in Connecticut as to how they might be able to access excess surplus in their captives. We first encourage health care providers and others to determine the amount of commercial coverage for decontamination costs, communicable disease cleanup, and interruption by communicable disease," indicated Maglaras. "But we are very busy speaking daily with captive owners about how they can use their captives' existing surplus to augment property coverage availability."
Andrew Mais, Commissioner of the Connecticut Insurance Department, said, "Health care facilities and other businesses in Connecticut are quickly realizing that business interruption claims caused by the COVID-19 crisis may be difficult to collect on, unless physical loss or damage to property can be substantiated." Mais added, "We've determined that captive insurance companies may be able, in some cases, to play a significant role in claim recovery, depending upon the amount of the loss and the availability of a captive's surplus."
"Connecticut is known as an innovative captive domicile," said Janet Grace, Program Manager of the Captive Insurance Division at the Connecticut Insurance Department. "Our department may be able to assist existing Connecticut captives with a strategy to access surplus for these types of business interruption claims. Just as importantly, and this is particularly true for tax-exempt health care providers...if your captive is located outside the United States, this may be the time to bring it to Connecticut, where you can take advantage of our 'brain trust' of captive innovators, who may be able to help you deal with lost revenue at this time of crisis."
To learn more about Michael Maglaras & Company: http://www.michaelmaglaras.com.
To learn more about Connecticut captives, visit the Connecticut Insurance Department's website at: https://portal.ct.gov/CID/Financial-Division/Captive-Insurance/Captive-Insurance-Regulation.
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SOURCE Michael Maglaras & Company
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