A captive insurance company can be a very effective financial planning tool and alternative risk financing option for owners of middle market and larger companies.
What is a captive?
A captive is an insurance company that is owned (wholly or partially) by a business or a business owner, which insures the risks of that business. They were once the domain of only larger companies and the Fortune 500, there are now well over 5000 captives, many insuring successful middle market companies.
Potential Benefits of a Captive
There are several potential benefits of a captive, including:
- Lower Insurance Costs
- Improved Cash Flow
- Risk Management Improvements
- Access to Coverage
- Tax Benefits
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