Build your own insurance company.

A captive insurance company is a private, licensed insurer formed, owned, and controlled by the businesses it insures. Rather than purchasing coverage from a third-party commercial carrier, your business creates its own insurance company to cover its risks. It's a proven risk management tool that lets you take control of costs while building long-term wealth.

Captive insurance works best for businesses with a strong safety culture, a favorable loss history, and annual insurance premiums generally exceeding $100,000. Companies frustrated by rising premiums, limited coverage options, or lack of control over their program are ideal candidates. Modern group and cell captive structures make it accessible to mid-market companies as well.

The four core advantages are risk management — covering risks commercial insurance can't or won't; asset protection — shielding business assets through a properly structured entity; wealth accumulation — premiums stay within your captive building tax-favored wealth instead of going to outside carriers; and improved cash flow through competitive premiums and direct access to underwriting profits.

A single-parent captive is wholly owned by one company and insures only that company's risks. A group captive is owned collectively by multiple businesses with similar risk profiles, where members share governance and receive returns based on their individual loss performance. Group captives make captive insurance accessible to companies that may not have the scale for a standalone captive.

A captive can underwrite virtually any definable risk — property, general liability, professional liability, workers' compensation, auto, cyber, product liability, and employee benefits including medical stop-loss. Captives can also cover specialized or emerging risks unavailable or prohibitively expensive in the commercial market, such as supply chain disruption.

A feasibility study is the critical first step in determining whether captive insurance makes sense for your business. It evaluates your risk profile, loss history, coverage needs, premium volume, and financial capacity. The study includes actuarial projections, program design options, and cost-benefit analysis to help you make an informed decision before committing capital.

No. Captives are structured to limit your exposure to manageable, predictable loss layers. Catastrophic and excess losses are transferred to highly rated fronting carriers and reinsurance companies. Your maximum financial exposure is defined and disclosed upfront before you join.

In a group captive, dividends are typically declared beginning approximately three years after the end of a policy period, with premium reductions often occurring within three to five years. In a single-parent captive, underwriting profits and investment income accrue directly to the parent company on an ongoing basis. The financial upside grows as the captive matures.

Costs vary by structure. A feasibility study — the essential first step — can be completed for as little as $5,000. For smaller single-parent captives, formation can begin with under $50,000 in startup costs. Group captives require posting collateral to capitalize the captive. The total investment is typically modest compared to the premium savings and profit-sharing potential.

In most group captive programs, members commit for one policy period only — there is no mandatory long-term lock-in. However, a commitment of at least three years is encouraged so you can fully realize operations and begin receiving dividend returns. Single-parent captives exist as long as the parent company chooses to maintain them and can be wound down if business needs change.