A captive insurance company (CIC) is an entity created by an organization to insure its uninsured or self-insured risks. As with any property and casualty insurance arrangement, premiums paid are deductible business expenses. The difference in a captive structure is that the organization pays the premium dollars to its own wholly owned subsidiary.
The benefits of creating and operating a CIC can be very significant. They include:
- Reduce insurance costs
- Protect your business from risk
- Improve cash flow
- Create profit center
- Increase asset protection
- Estate planning
Why talk to us
While captive insurance companies have been allowed by law for 70 years, until recently only the largest of companies (think Fortune 1000) had put them in place. Only now have small to mid-sized organizations begun to discover the financial and risk-management advantages of creating their own captives. Still, there are fewer than 12,000 captives among the 13 million U.S. companies employing two or more people.