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Which Captive Insurance Structure is Right for Your Business?

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If you are thinking of working outside the traditional insurance market, captive insurance might be the right choice for you. Captive insurance programs can cover a wide range of monetary stability goals of corporations. Some of these goals might include expanding your insured audience since the structure of captive insurance is inexpensive. It offers general stability and reduction of losses through improved cash flow. If you are looking for either of the above financial goals for your business, it is time for you to decide about what plan you are going to buy.

Following are some of the types of Captive Insurance that you can choose from:

  • Single Parent/Pure Captive – For multi-million Corporates who assign one subsidiary as in charge.
  • Group Captive Insurance – For mid-level organizations looking for multiple third parties responsible for investments.
  • Industry Captive and Association Captive Insurance – Group Captive but formed by joining related
  • Rent-based Captive Insurance – An insurance company that can be rented out.

Types of captive insurance

Single Parent Captive

As the name implies, single-parent captive insurance has one person responsible for managing the insurance needs of any corporation. It is sometimes also known as a pure captive. This type of structure usually favors giant, multi-million companies. So, if you are established enough, a Single Parent Captive Insurance Plan might be right for you. The structure is very flexible because the company does not have a board to hear from and hold oneself accountable to. This is why the company enjoys benefits from tax payments and other premiums. But they can be a tedious item on the budget to set.

Group Captive Insurance

Taking the idea of single-parent captives one step further, a group captive insurance structure is based on multiple single-parent authorities. A group is formed by joining different companies (they can be irrelevant to your corporate needs), purely based on the interest of revenue, and all of the capital is used to invest. If you have a medium-sized company with a per annum capita of $400 k to 1.5 million, you can consider this structure. They are comparatively easy on the pocket, but there is a catch, with so many investors involved the profits are shared.

Industry Captive and Association Insurance

These are the type of group captives, but instead of unrelated or third-party subsidiaries, companies with a shared interest or working together on the same association are joined together to form group captive insurance platforms. Similarly, with Industry Captive Structure, the set of companies is even narrowed down to companies who even share the industry. Again, for the mid-level companies, who are looking for shared financial goals, this is very well suited.

Rent Based Captive Insurance

If you are a small company who does not have the time or financial resources to build their own captives but are looking for a captive solution, this one’s for you. Another service provider like Talisman Casualty is a cell captive insurance company in Las Vegas, Nevada will provide your company access to already available captive insurance. It can save you a lot of time and money and will help you improve and level up.

Having professional help on your side will help you in making the right decision. An expert company can guide you regarding different captive insurance structures and also about the pros and cons of each one.

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