While businesses may like the freedom to dictate coverage terms that's allowed by insuring through a captive, this option also comes with increased financial risk. (Credit: masterzphotofo/Adobe Stock)
Nine out of 10 Fortune 500 Companies use captive insurance, according to the National Association of Insurance Commissioners (NAIC). This form of 'self-insurance' involves organizations creating their own insurance companies instead of buying insurance from an established carrier.
Today's companies that have embraced captive insurance programs view it as an opportunity for new revenue streams and lower insurance premiums as well as the chance to tailor insurance coverage to specific to their needs. The majority of companies that use captive insurance programs are large corporations — due in no small part to the complexity and cost of establishing an captive insurance program.
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Maura Keller
Maura Keller is an award-winning Minnesota freelance writer, editor, book author and proofreader.
