How Does Captive Insurance Work?

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Captive Insurance 101: Everything You Need To Know

A captive insurance company might be the best option for you. But first, it is important to understand the fundamental basics of everything you need to know about captives.

Discover If A Captive Insurance Company Is Right for Your Organization:

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Are you an independent business owner looking to increase profits while maintaining greater control over your own risk management and tax planning? A captive insurance company might just be the best option for you. But first, it is important to understand the fundamental basics of this avenue––a quick Captive Insurance 101, if you will. Here are the facts you should know about captive insurance best practices before making your next move.

What is a captive insurance company?
Quite simply, a captive insurance company is a risk-financing tool––one that grants owners greater control (in both financial and risk management sectors) than that which is offered by traditional commercial insurance. Captive insurance involves setting up your own insurance company, to assert greater control over your risk management, tax planning, and overall earnings. With a captive insurance structure, you can make sure that your risks are written into policies as you see fit––without ambiguous or obscure wording, or using terms which strongly benefit your insurer at claims time.

Why form a captive insurance company?
For years, large corporations have benefitted from operating their own privately held captive insurance companies––most of which were originally established to provide coverage where insurance was unavailable or prohibitively priced. Such insurance subsidiaries were typically held in offshore accounts (you've no doubt heard about the tax benefits of keeping funds in the Cayman Islands).

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ABOUT WES SIERK
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Wesley is the Managing Director and Co-Founder of Risk Management Advisors. He is a nationally recognized expert in the field of captive insurance company design, implementation, risk transfer and captive insurance company management. He also oversees Risk Management Advisors’ asset protection, executive compensation, and corporate benefit planning division.

Wesley has close to 18 years helping highly profitable, closely held businesses limit their risk exposure and taxes through captive insurance company planning, qualified plan structures, onshore and off-shore entities, and trust arrangements. He works with client’s advisors (CPAs, Attorneys, and Financial Advisors) to insure proper due diligence and implementation of all plan designs and needs. Because of his extensive tax background, he ensures compliance with all of the existing revenue rulings and regulations.

He is the author of Taken Captive: The Secret to Capturing Your Piece of America’s Multi – Billion Dollar Insurance Industry. He is also the author of You Can Make It, But Can You Keep It? a book to teach the wealthy how to hold on much of their hard earned assets. In addition, he has authored many articles including “Facing Down High Insurance Premiums” in Builders Exchange, and “Captive Insurance Companies: They can Lower Costs and Increase Profits” from the Journal of Construction Accounting and Taxation.

Fortune 500 companies have been enjoying the financial benefits of Captive Insurance for decades. Finally, savvy privately-owned, mid market companies can do the same.

Discover If A Captive Insurance Company Is Right for Your Organization.