A captive insurance company is a legally licensed limited-purpose property and casualty insurance company whose main purpose is to insure the risks of its owners or the companies affiliated with its owners. Some common types of insurance captives include, but are not limited to, builder’s risk, contractor’s professional liability, directors’ and officers’ liability, cyber security, automobile liability, general and umbrella, and workers’ compensation.
Some common benefits of captives include improved risk management, insurance cost reductions, mitigation of insurance coverage gaps, and tax and estate planning opportunities.
When deciding whether or not to form or participate in an insurance captive, there are numerous items to consider in addition to what will be insured, such as single member vs. group member captive, state or country of domicile for the captive, manager of the captive and broker.
For more information regarding insurance captives, contact your Schneider Downs representative and stay tuned for more Schneider Downs articles.
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