2015 Using Captive Insurance Companies for Savings
Using Captive Insurance Companies for Savings Small companies have been copying a method to control insurance costs and reduce taxes that used to be the domain of large businesses: setting up their own insurance companies to provide coverage when they think that outside insurers are charging too much. Often, they are starting what is called a "captive insurance company" - an insurer founded to write coverage for the company, companies or founders.insurance companies Using Captive Insurance Companies for Savings Here's how captive insurers work. The parent business (your company) creates a captive so that it has a self-funded option for buying insurance, whereby the parent provides the reserves to back the policies. The captive then either retains that risk or pays re-insures to take it. The price for coverage is set by the parent business; reinsurance costs, if any, are a factor.insurance companies In the event of a loss, the business pays claims ...