Captive Insurance Programs
Captive programs are more suitable for large staffing companies and provide workers’ comp coverage that usually cannot be obtained through the traditional insurance market, thereby reducing the high cost of insurance to staffing companies in certain high risk codes. The most common use of captive insurance is to provide liability coverages for lines of business, such as workers’ compensation, that have regular and predictable loss payments. Many captives are based outside the US and receive favorable tax treatment which helps captives offer lower comp rates. Advantages of captive programs.
- Reduced costs,
- Enhanced risk management
- Greater control over the insurance product and direct access to the reinsurance market for excess protection.
- The flexibility to cover a wide variety of risks. Virtually every risk underwritten by a commercial insurer is provided for in a subset of captive insurers. Examples include: property, workers’ compensation, casualty (general, professional, auto liability, and product liability), and employee benefits such as long-term care and supplemental life insurance plans.