Manufacturing companies should consider using captives to fill gaps in their commercial insurance coverage, according to Randy Sadler, a principal with CIC Services.
An increasing number of manufacturing companies are pursuing captive insurance as a solution to the problems created by exclusions in policies that often deny coverage when it is needed most, said Sadler. The problem is even greater for asymmetrical threats like pandemics, where coverage is costly and difficult to obtain.
A mood of nervousness is currently gripping manufacturers, due to uncertainties around COVID-19 and global economic lockdowns, making risk management a top priority. A survey by the National Association of Manufacturers found that 80 percent of manufacturers expect the pandemic will have a financial impact on their business.