Captive Insurance Is No Longer a Secret

Not a Secret — Just Unfamiliar

As business owners today are exposed to the many benefits associated with captive insurance, the typical response is, "Why haven't I heard of this before? Is it a secret?" In actuality, it never was a secret, as business owners have been using captive insurance for decades. Captive insurance is, however, a powerful tool for qualifying business owners despite unfamiliarity with these simple yet complex insurance companies.

First, last, and always, these insurance companies are just that — insurance companies built to insure risk of your operating company.

More Accessible Than Ever

This nearly 100-year-old insurance strategy has become cost effective for even more business owners today. Increased opportunities and revenue from captive insurance companies also means additional captive insurance models available in the market and continued updated regulations. Proper administration of the insurance company, as well as investment of captive assets, must be structured and managed properly in accordance with state department of insurance regulations and IRS guidelines.

Although familiar to the elite in the past, and unfamiliar to most, captive insurance has now become available to a far wider range of business owners in a cost-efficient manner. Thirty-six out of fifty U.S. states are actively seeking captive business with their departments of insurance.

The Number One Barrier: Ignorance

Even though there has been, and will be, scrutiny of captive insurance, the industry continues to thrive for more and more business owners each year. Sadly, too many qualifying business owners fail to reap the many benefits of ownership. In these cases, the reason may be individually based, while experience has repeatedly shown the number one reason is ignorance.

To find out if captive insurance is a legitimate option for your business, take the necessary time and action to educate yourself. Learn what risks you currently have that may or may not be covered by traditional commercial policies — risks that are informally self-insured, under-insured, or not insured at all. The risks insured in your captive are the risks of your business.

Congressional Clarity

The current captive insurance industry in the United States is a multi-billion dollar business. Additionally, we have Congressional clarity — legislative action has given direction to continually increase the premium limits which are currently $2.85 million annually per insurance company per year, with the ability to increase these limits more in the future. This confirms, as they have done in the past, that properly structured captive insurance companies are effective risk management tools for business owners.

Transparency of all aspects of captive insurance is provided and encouraged. The question should not be "Is it a secret?" The question should be, "How can I get started?"