|
What Is A Captive Insurance Company?
A captive insurance company is an insurance company owned by the insured. The practice started in the 1950s as certain industries either couldn’t find insurance or could only find insurance at incredibly expensive rates. As such, the only way these companies could mitigate their risk was through a captive program. Who should form a captive? Any company with an above average risk profile should conside forming a captive. Some of the companies that regularly form captives are: oil and gas concerns transportation companies commercial property owners construction companies manufacturers professionals with malpractice insurance and hospitals This list is hardly exclusive. Are there any revenue requirements? At minimum, a company should have gross income of at least $600,000 and insurance premiums of at least $300,000. But, gross revenue figures can be lower if there is the requisite amount of risk – doctors are a classic example of this fact. Additionally, most businesses are underinsured – in some cases vastly so. This means there are probably fairly large sums of risk for the captive to insure. HOME PAGE |
|