Single Parent Captive Insurance
Mitigate risks. Secure coverage. Unleash potential.
Mitigate risks. Secure coverage. Unleash potential.
A single parent captive, also known as a pure captive, may be owned, financed and controlled by a single parent company and is designed to insure the parent company and its affiliates’ risks.
Options for ownership of the insurance company can provide meaningful planning opportunities with potentially significant economic benefits. A single parent captive uses risk capital and premium payments provided by the parent to cover claims and administrative costs. Additionally, a pure captive allows for more customizable insurance solutions, helping protect your business and its entities from unforeseen contingencies while also fostering a financially efficient insurance program.
Operating as an insurer for the parent company, these captives can be structured to handle many types of coverage. In many cases, there are opportunities to attain cost savings on traditional commercial insurance coverage, cover deductibles, as well as cover risks for which there is no efficient commercial insurance market.
Much like traditional guaranteed cost insurance, a pure captive pays losses for claims to the parent company.
At Higginbotham, we go beyond the usual broker-client relationship. We see ourselves as your partner, helping guide you through the captive insurance journey. Our seasoned insurance team brings to the table a wealth of experience, knowledge and an unwavering commitment to creating a single parent captive that’s structured for success.
When you choose Higginbotham as your captive insurance partner, you get a lot.
Every company is different, and so is every single parent captive. While the potential benefits of switching to a captive insurance program will vary based on many factors, such as commercial coverage needs, industry and company size, advantages of a single parent captive may include:
Gain more control over insurance costs by stabilizing prices and capturing underwriting profits, and improve cash flow through premium retention, optimized tax benefits and wealth accumulation.
Take a more active role in risk management while enjoying incentives for strong loss control strategies, helping foster a culture of safety, proactivity and risk mitigation.
Enjoy greater flexibility with your company’s insurance policies, changes to coverage, underwriting and claims process.
Gain access to reinsurance markets and create customized insurance solutions that cater to your specific organizational needs and risks, including workers’ compensation, property insurance, professional liability and more.
The beauty of a single parent captive is its adaptability. It can be tailored to include both general and industry-specific risks, offering the flexibility to consolidate various insurance coverages under a single umbrella. While single parent captives are a versatile solution and the specifics will vary, here’s a look at some coverages that might be part of a single parent captive program.
General liability insurance is a cornerstone of business protection, helping guard against financial setbacks that could arise from claims of bodily injury or property damage during the course of business operations. Examples of covered events include legal defense costs and settlements or judgments in lawsuits filed against your business due to accidents, injuries or negligence claims. With a single parent captive, you have the independence to better tailor general liability coverage to meet the specific needs and risks of your business.
Workers’ compensation caters to the well-being of your employees by helping cover medical expenses and lost wages if they get injured or fall ill due to work-related activities. It serves as a safety net for your employees by helping them to receive medical attention and financial support during recovery. Additionally, it protects your business from potential lawsuits by injured employees. Within a single parent captive structure, there is the potential for workers’ compensation to be managed more efficiently, potentially leading to reduced claims costs and improved workplace safety measures.
Commercial property insurance provides coverage for damages resulting from covered perils like fire, theft or natural disasters. It can cover both the physical structure of your business and the contents within it, such as equipment, inventory and furniture. In the event of a covered peril, property insurance helps your business recover by offering support in repairing or replacing damaged assets.
Directors and officers (D&O) insurance helps protect your company’s directors and officers by covering legal fees and other costs they might incur while serving in a management role. It helps protect executives from personal losses and assists with costs the company may face as a result of a lawsuit. With a single parent captive, D&O insurance can be structured to address the specific governance risks your company faces.
In today’s digital era, cyber liability insurance is indispensable. This form of insurance covers financial losses resulting from data breaches and other cyber events. It can cover the costs of notification, credit monitoring, legal fees and fines or penalties, helping your business remain resilient in the face of cyber threats. Beyond financial coverage, it can also aid in the management and mitigation of cyber risks.
Employment practices liability insurance (EPLI) assists with claims from employees alleging wrongful treatment like discrimination, harassment, wrongful termination and other employment-related issues. By helping ease the financial burden of legal defense costs, settlements and judgments, EPLI can help your business navigate through employment claims without a significant financial impact. Through a single parent captive, employment practices liability insurance can be customized to address the unique employment practices risks your business encounters.
Discover the freedom that comes from having greater control over your insurance and risk management program.
Higginbotham’s captive team will provide a no-cost analysis of your specific situation to determine whether or not a single parent captive option makes sense for your business to consider.
Once the decision is made to move forward, the experienced Higginbotham team manages all services necessary to maintain compliance with insurance regulations. Such services may include:
Risk management and mitigation, together with economic benefits, make for a powerful combination for many business owners to consider.
One advantage of a single parent captive is its role in risk management. But, it does more than just identify your exposures — it establishes a framework for assessing and monitoring risks.
A single parent captive program can also assist in streamlining claims management, loss control and operational safety strategies.
Unlike traditional insurance, this arrangement can give you greater control in the risk management process.
Charles “Chuck” Spitzer began his career in 1977 after earning a bachelor’s degree in accounting. In 1983, he started his own CPA and business advisory firm specializing in financial institutions and insurance entities, growing the practice to become one of the top 25 CPA firms in Tarrant County. After selling the practice in 2003, he joined a Dallas-based financial service organization as an equity partner and chief financial officer before transitioning into the captive insurance space.
Over the course of his career, Chuck as become proficient in the planning aspects of 831(b) captive insurance companies and uses this knowledge to aid clients in implementing this risk transfer strategy. Chuck’s experience as a CPA in the insurance industry has given him specialized knowledge of captive insurance regulations and taxes.
Chuck is a licensed CPA in Texas and is a member of the Captive Insurance Companies Association. He and his wife Karen reside in Arlington, Texas, and have five children and 12 grandchildren.
Quentin Spitzer serves as general counsel for Higginbotham’s single parent captive insurance program.
He has over 15 years of experience as a practicing lawyer, first working in oil and gas law before transitioning to his current role. As general counsel, he oversees the legal affairs for Higginbotham’s specialty captive offerings, including document preparation, claims oversight, corporate governance for captive insureds and more.
Quentin earned a bachelor’s degree from Brigham Young University and a Juris Doctor from Texas A&M University School of Law.
Prior to entering the captive insurance field, Chad Spitzer worked in the transaction advisory services group of Ernst & Young in Dallas, Texas. In this role, he worked on the valuation and business modeling team, where he performed valuations for Fortune 500 clients and other large privately held businesses.
Chad graduated with a bachelor’s degree in finance from Brigham Young University. He is married and has one daughter.
Derek Spitzer began his career at a Dallas-based global tax consulting firm. As a consultant in the transaction tax practice, Derek worked directly with several Fortune 500 companies in the retail, health care, storage and manufacturing industries.
Derek earned a bachelor’s degree in finance from Brigham Young University in Provo, Utah. He is married and has three children.
Discover how a single parent captive can become the cornerstone of your organization’s risk management framework.
Our seasoned professionals are poised to guide you through the setup, management and optimization of your captive insurance program, helping you harness the full spectrum of benefits it offers.