Many companies are discovering that they may use their Bermuda captives to transfer more than the traditional property and casualty risks for which the captive was originally established. Bermuda’s flexible regulatory environment and a legal system primarily based on English common law gives Bermuda insurance companies and their insurers a great deal of freedom to contract as they think fit. In this article Charles Collis, a partner of Conyers Dill & Pearman in Bermuda, considers just two of the opportunities to Alternative Risk Transfer.
Punitive Damages
In many jurisdictions insurance companies are not permitted to insure against losses arising from punitive (or exemplary) damages awards. However, Bermuda insurance companies are not generally subject to such a restriction under the Bermuda Insurance Act 1978 and the recent English case of Lancashire County Council v. Municipal Insurance 1996 WLR 493 which confirmed that an insurance contract protecting against punitive damages is
