Risk management and consulting company Alternative Risk Strategies (ARS) has announced the implementation of a captive insurance arrangement for a large, vertically integrated cannabis company. As part of the arrangement, ARS secured the placement of $10 million in directors and officers captive coverage.
The captive insurance program offered by ARS is designed to give clients a competitive advantage in terms of cost of coverage and the ability to afford large amounts of D&O coverage at significantly lower rates than are available in traditional commercial insurance markets, the company said. This means cannabis companies can attract and retain key talent, lower their costs, improve cash flow and accumulate cash and other assets.
“We are pleased to have designed and implemented this effective captive insurance solution for our client in the cannabis industry,” said Eric Rahn, managing director of ARS. “The interest in our captive program has been remarkable, but was not unexpected, as cannabis companies struggle to find affordable and adequate levels of insurance for their business needs and realize attracting and retaining management talent is related to adequate insurance.”
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The ARS Captive Program is part of an arrangement between ARS and an AM Best A-rated insurer, which provides ARS and its clients with maximum flexibility in designing and insuring captives in high-risk and highly regulated sectors, the company said.
