When businesses embrace the concept of a group captive, they must be fully committed to operating as safely as possible to reap the rewards of the program. Captive members see the benefits of good loss performance, but also feel the pain when it is not so good . . . (Credit: gualtiero boffi/Shutterstock.com) When businesses embrace the concept of a group captive, they must be fully committed to operating as safely as possible to reap the rewards of the program. Captive members see the benefits of good loss performance, but also feel the pain when it is not so good . . . (Credit: gualtiero boffi/Shutterstock.com)

For several years, we have been in the midst of a hard insurance market. As a result, insurance carriers continue to respond with steep price increases, dramatically larger deductibles and lower coverage limits. However, sophisticated insurance buyers are taking control of this situation by strategically utilizing group captive insurance companies.

While group captive insurance has been around for some time, we are seeing more and more companies interested in what this type of program has to offer. A group captive is an insurance company owned and controlled by unrelated organizations. Essentially, a group of companies band together with a desire to control their own insurance destiny through an alternative to traditional insurance. Coverage provided by group captives normally includes workers' compensation, commercial general liability and automobile liability/physical damage due to the frequency and predictability of these types of claims.

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