What is the definition of Alternative Markets?

Alternative markets are non-traditional means that are used to finance risk, especially for self-insurance. Some businesses have specific needs that may not be covered by traditional products offered by the insurance company. Thus, companies have to turn to other means to answer their coverage needs.

For example, businesses such as the construction business and the nursing home business are usually very hard to insure using traditional products. Often, the premiums for such groups are extremely expensive and prohibitive. Sometimes, the groups are not insurable at all. So what these groups do is to pool their own money as a form of self-insurance.

There are captive and non-captive types. Reinsurance falls under the captive options. Non-captive options include having a deductible plan (where insurance benefit payments are paid less the deductible).

• Competitive State Fund
• Excess and Surplus Lines
• Commission
• Businessowners Policy / BOP
• Employer’s Liability