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Explore the benefits of captive insurance and discover how Higginbotham’s approach to captives helps empower businesses through increased control over their insurance outcomes.
Group captive insurance is a distinctive insurance program in which multiple businesses unite to form their own insurance company. Each involved business becomes a member-owner (also known as an owner-stakeholder) in the captive insurance company.
A captive insurance company operates like a traditional mutually-owned insurance company, having A-rated carriers that issue policies, process claims and follow applicable regulations.
There are generally two kinds of group captives: homogeneous or heterogeneous. In a homogeneous group captive, members all operate within the same industry. For this reason, a homogeneous captive group that is sponsored by an industry association may be known as an “association captive.” A heterogeneous group captive’s members come from a variety of industries, which often allows them to diversify their collective risks.
To design a group captive program for your business, we start with an actuarial analysis of your current program. If your company qualifies, we’ll match you with other businesses.
Once your captive group is formed, around 35 percent of each premium dollar paid will fund operational costs, with the remaining 65 percent going to a loss fund designed to help pay for claims.
Understanding captive insurance can be challenging, but our team works to simplify the process for you.
Group captive insurance is more than just a way to get insurance coverage; it’s a path toward managing your risks and your insurance needs alongside other like-minded businesses.
At Higginbotham, we’ll guide you through the details of group captive insurance, helping analyze your risks, match you with like-minded businesses and secure the commercial coverage you need.
Unlike traditional insurance, a group captive allows its member companies to have greater control over their insurance costs, coverage and claims management. Here’s a breakdown of how a group captive operates:
A group captive is essentially an insurance company owned by a collection of organizations rather than a single entity. This collective ownership model fosters a community of like-minded companies striving toward mutual risk management goals.
Through shared risk and collective purchasing power, group captives tend to offer a more predictable cost structure than traditional insurance. And, by minimizing claims and remaining members for several years, businesses may qualify for dividend distributions from profits, which can help reduce their total cost of coverage.
Each group member’s premium is based on its own loss experience instead of industry rate pricing, allowing for a more customized insurance program that accounts for your company’s risk management and loss control strategies, claims history and overall operations.
Companies within a group captive share risks, which often translates to lower premiums since the overall level of risk is distributed among all members.
Group captive members can tailor their coverage to meet the unique needs and risk profiles of their respective businesses.
The group captive is governed by its member businesses, meaning that decisions can better align with the best interests of the group, rather than the goals of external stakeholders.
Hear from Bobby Jenkins, President of ABC Home & Commercial Services, as he shares his experience with Higginbotham’s captive insurance program and how it plays a role in his business’s success. Bobby highlights how the collaborative effort between ABC, Higginbotham and the captive helps facilitate decisions that align with the business’s best interests.
If you’re interested in securing group captive insurance for your organization, but don’t know where to start, Higginbotham is here to help. We get to know the risks and priorities of your business, allowing us to align your group captive insurance coverages and risk management strategy with your business’s needs.
Each form of insurance within your captive program can help build an overall solution for a group captive. While the eligible commercial coverages for your captive group will depend on several factors, common policy options include:
Help safeguard the backbone of your organization – your employees – with workers’ compensation insurance within a group captive. This coverage can assist your business with the financial repercussions of employee injuries or illnesses incurred while on the job.
Navigate the turbulence of liability claims with commercial general liability insurance. This coverage can assist with claims of bodily injury, property damage and other covered perils that can arise during business operations.
The road to success is smoother with commercial auto insurance. Within a group captive, auto insurance can help cover claims arising from accidents involving vehicles owned or operated by your company.
Secure your assets against the unforeseen calamities that may befall them. Physical damage insurance within a group captive covers the cost of repairing or replacing your company’s property following events like fire, theft or natural disasters.
In the bustling marketplace, product liability insurance helps to shield your business from claims of harm caused by your products and to reduce the financial burden of such claims.
Medical captive insurance can provide a specialized solution for managing risks that are unique to the health care industry. By participating in a medical captive group, health care providers can pool their resources, integrate risk management into their overall business strategies and obtain industry-specific coverages like medical malpractice insurance, which helps cover legal costs, settlements or awards in cases of alleged professional negligence.
Hear how group captives provided an innovative approach to insurance for one of our clients operating in the oil, gas and chemical services industry.
Discover a world where insurance isn’t just a requirement, but a tool for financial growth.
Get in touch with our team at Higginbotham, and let us help create a captive insurance strategy that contributes to your business’s success.
