Hurricane Spin-down

Nuts & Bolts: ACE USA introduced hurricane spin-down insurance that can be used by the chemical process industry to help reduce the financial costs of closing down plant operations in response to the threat of a
hurricane. This new insurance policy—part of the StormTracker suite of weather insurance products—is reportedly unlike traditional property policies and will respond even if the plant does not suffer property damage as a result of the hurricane. The Hurricane Spin-down policy will pay a pre-determined value to cover the lost income and extra expenses incurred during the period of spinning down and spinning up plant operations. Coverage will be triggered if the probability of a hurricane impacting the covered location reaches an agreed-upon critical threshold based on the plant’s hurricane response protocols. This policy is available for coastal areas in the United States and the Caribbean. The coverage period can extend from a few days to the entire hurricane season. The hurricane spin-down insurance product will be marketed through both retail and wholesale insurance brokers.

Dollars: Minimum premium of $10,000; deductibles are deductibles “in-kind”, e.g. insurance for major (categories 3, 4 and 5) hurricanes only. Coverages for categories 1 and 2 are available, but due to their frequency, are more expensive. Typical policy limits are expected to be between $1 million and $5 million, although higher limits are available upon request, and subject to underwriter
discretion.

Carrier: Illinois Union Insurance Company, non-admitted. Illinois Union is a wholly owned subsidiary of ACE USA, and is rated “A” by AM Best, “A+” by S&P and Fitch, and “A2” by Moody’s.

States Available: U.S. coastal states from Maine to Texas and the Caribbean Islands.

Contact: Michael Luck, (215) 640-5341 or michael.luck@ace-ina.com

Topics Catastrophe Natural Disasters Hurricane