Samuel Hale, an employer carve-out organization, will insure its $50 million workers’ compensation risk through an insurance captive run by A+-rated Arch Insurance, beginning on July 1, 2022.
“We’ve been working on this for six years,” said Samuel Hale general manager Michael DiManno. “The captive arrangement will allow us to maximize the benefits of our carve-out agreement which dictates the economics of our business.”
California has a very high litigation rate on workers’ compensation insurance claims compared to the rest of the country. According to the Workers’ Compensation Insurance Rating Bureau, California spends as much money on friction costs associated with litigation as it does on reimbursing injured workers’ wages, making it one of the most expensive states in the United States. for workers’ compensation premium.
Exclusions have been created by the Department of Workers’ Compensation to allow approved entities to handle their claims disputes through Alternative Dispute Resolution (ADR) instead of the overburdened court system. ADR, compensatory claims are settled quickly and employees receive their money faster, while insurers can avoid the exorbitant costs of the slow legal system.
“This captive gives us a 10-year horizon on workers’ compensation[ensation]which creates long-term stability for our clients in a very precarious financial climate,” said DiManno. “We now have maximum control over our program and can deploy the best cost containment services based on our specific needs.