Captive insurance is an attractive alternative to commercial insurance and traditional risk financing that has grown in popularity and practicality in recent years. It offers an array of benefits for companies wishing to protect themselves financially, exercise greater management over the costs and method by which they are insured and more effectively manage risk.
At Fox Rothschild, our attorneys have more than three decades of experience assisting entities in the formation and development of both on-shore and off-shore captive insurance companies for insurance and reinsurance, including pure (single parent), group (multiple owner), segregated cell and rent-a-captives. Our team also handles regulatory, compliance and governance matters and effectively resolves related risk management issues and claims disputes.
While the IRS has turned a keen regulatory eye toward captive insurance companies in recent years, Fox attorneys have an established reputation for creating captives that meticulously adhere to four strict compliance principles: risk transfer, risk distribution, risk diversification and economic substance.
Why a Captive?
A captive insurance company allows a business to insure its retained losses in a formal structure. It offers a number of benefits, including enhanced risk management, tailored coverage, a reduction in or stabilization of costs and premiums, control over claims management and processing, retention of profits, reduced bureaucracy and the recoupment of excess net premiums when claims are low.
Captive insurance is available for all lines of business insurance, including: property and casualty; life, health and disability; directors and officers; errors and omissions; professional liability; commercial general liability; workers’ compensation; employers’ liability; business interruption; and excess umbrella, among others.