Alternative Risk Strategies (ARS) has successfully closed a US$10 million captive insurance arrangement in directors and officers (D&O) coverage for a large, vertically-integrated cannabis client. As a risk management consulting firm offering solutions for expensive, hard-to-place risks, ARS’ captive insurance programme is structured to provide clients with a competitive advantage with regards to cost of coverage. In addition, ARS’ programme is designed to provide clients with large amounts of D&O coverage at a lower rate than compared to the traditional commercial insurance market. This is specifically beneficial for cannabis companies, as it allows these firms to attract and retain key management talent, as well as reduce costs and improve cash flow. ARS also provides captive insurance company management services to both domestic and international clients, including advisory services concerning the legal, tax, accounting and investment considerations in setting up a captive. Eric Rahn, managing director at ARS, comments: “We are pleased to have designed and implemented this effective captive insurance solution for our client in the cannabis industry.” “The interest in our captive programme has been remarkable, but was not unexpected, as cannabis companies struggle to find affordable and adequate levels of insurance for their business needs and realise attracting and retaining management talent is related to adequate insurance,” he explains. ARS launched a cannabis captive offering in June of this year to provide an alternative risk transfer solution for the cannabis, hemp and CBD industry.
