CIC Services and Ragnar Group Inc. have launched a Utah-domiciled captive insurer designed to provide coverage for bars and restaurants facing higher premiums from traditional carriers due to misclassified risks.
The companies said many establishments are grouped under broad categories such as “sports bar”, a practice that often drives up premiums regardless of an individual business’s actual risk.
The captive program instead evaluates applicants using more targeted underwriting criteria, including hours of operation, alcohol service, entertainment options, and management practices. Businesses with similar profiles are aligned together.
“The vast majority of restaurants and bars are fundamentally misidentified when it comes to risk,” said Andrew R. Reina, chief executive officer of Ragnar Group, in a statement. “By introducing more precise guidelines and what we call ‘community underwriting,’ we believe this captive offers a fairer, more transparent solution to owners who have grown frustrated with traditional insurance models.”
Community underwriting incorporates feedback from current policyholders into the review process for new applicants. The companies said applications will be evaluated over a 30- to 45-day period to allow for greater understanding of operations and alignment among participants.
The captive will be available to bars, pubs, nightclubs, and fine dining restaurants. Gentlemen’s clubs, as well as businesses deemed “high-risk,” such as cash-only operations, wedding venues, and establishments with mechanical riding devices, will be excluded.
The launch follows recent activity in the captive sector. Origin Specialty Underwriters Agency LLC, a managing general agent, announced it had formed Origin Captive Solutions to focus on middle-market businesses, BestWire reported. Origin Specialty, a partner company of Beyond Risk, concentrates on the restaurant, hospitality, and construction industries.
As part of the new initiative, Origin Captive will partner with sister company GPW & Associates and a team of underwriters, actuaries, certified public accountants, and other professionals to deliver full-service captive solutions, the company said.
What are your thoughts on the new program? Share your insights in the comments below.
