Risk Management Strategies

Traditional Business Insurance

If your business is simple and straightforward, traditional business insurance coverages purchased from an insurance agent or broker may suit your needs adequately.

Traditional Captive Insurance

The term “Captive Insurance” refers to a licensed, regulated, private insurance company which insures the interests of a business. There are many types of captive insurance companies, covering a wide variety of businesses and industries.

Risk Retention Groups

RRGs are captive insurance companies collectively owned by their insured business-owners, which insure specific, common business risks of those owners. RRG owners must be from a common industry group.

Association Captives

Captive Insurance companies can be formed for members of an association to insure common risks that the participants share. These are similar to a Risk Retention Group.

Warranty Captives

A business which offers a warranty on a product they sell can provide warranty protection in the form of an insurance policy issued by a captive insurance company.

Group Captives

Businesses in the same common industry can use a captive insurance company to pool their premiums and insure their common risks.

Micro-Captives

These captives are common for small to mid-size companies who are paying premiums below $2.3MM each year. These captives are formed within section 831(b) of the US Tax Code, allowing for the premiums received by the captive insurance company to be considered non-taxable income.

Medical Captives

For larger companies with higher reserves, a captive can be formed for medical coverage for their employees. There is most often a reinsurance arrangement for catastrophic losses.

Cell Captives

A Segregated Cell captive is often referred to as a “rent-a-captive.” It functions like a micro-captive, but is part of a larger host captive insurance company, and is segregated from the other cells in the host.

Which type of risk management strategy is best suited for your business?