Is a Captive Right for Your Business
This is a term that you may have heard and you are interested in understanding. You have questions. L&W Insurance is prepared to assist you with answers. This information is a very short narrative about the term that is difficult to explain in a few words.
A captive is an insurance company owned by your business or by a group of businesses that combine for the common purpose of funding a business exposure. It is a formalized version of self-insurance which involves a large deductible and the funding of financial losses that you incur. The captive owners (or members) provide the capital and establish a mechanism to administer the other insurance company-type functions. This is accomplished by either assuming the responsibility internally or transferring the responsibility to a third party.
Ultimately with a captive, the risk of negative financial implications are greater, but so are the potential profits. The risk and financial consequences (good or bad) are retained by the captive.
The greatest advantage associated with a Captive Insurance approach is the ability of a business to control their destiny. Not many businesses are large enough to benefit from formation of a Captive, the alternative to this are Group or Cell Captives that offer some of the same advantages as an owner controlled Captive. L & W can assist with questions to determine if there is an Organization Form of Captive that is RIGHT for your business.
For more information regarding Captives or other Insurance Alternatives please email Erik Kaufmann at firstname.lastname@example.org