Captive Workers' Compensation Plans
Exploring Captive Programs: A Strategic Alternative
Captive insurance programs provide businesses with an innovative alternative to traditional insurance, offering greater control, customization, and potential cost savings.
By forming your own “insurance company” through a captive, you can better manage your risk and tailor coverage to your specific needs. However, captives require sophisticated management and a deep understanding of both insurance and financial principles. Liberty’s experts guide you through this complex landscape to ensure your captive is both effective and efficient.
In addition to potential savings, captive programs can also offer tax advantages, making them a strategic choice for companies willing to invest in more complex insurance solutions.
Types of Captive Workers' Compensation Plans
Deductible Reimbursement Captives
A program where you take a deductible plan and build a captive around that deductible exposure.
- Offers the benefits of both deductible plans and captive structures
- Potential cost savings
- Greater control with less financial output
- Requires sophisticated management, a deep understanding of both captives and deductible plans, and a collateral (LOC) to fund expected losses
Single-Parent Captives
Owned and operated by one company to insure its own risks.
- Full control over insurance operations
- Potential for cost savings
- Potential for customization of coverage
- Requires significant investment, management resources, and a collateral (LOC) to fund against expected losses
Group Captives
Owned by multiple companies that pool their risks.
- Shared costs and risks
- Potential for profit sharing
- Enhanced bargaining power
- Involves complex governance
- Needs collateral (LOC) for expected losses
- Poor performance by group members can affect your costs
- Joint liability may apply
Rent-a-Captives
Allows companies to “rent” a captive insurance company, providing many benefits without full ownership.
- Lower initial investment
- Access to captive benefits
- Flexible risk management
- Limited control compared to full ownership
- Potential for less customization
- Requires a collateral (LOC) to fund against "expected" losses
Protected Cell Captives (PCCs)
A single legal entity divided into separate cells, each acting as a separate insurance entity.
- Legal separation of assets and liabilities
- Lower cost than traditional captives
- Flexible structure
- Complex regulatory environment
- Requires careful cell management
- Typically requires a collateral (LOC) to fund against "expected" losses
Find Your Ideal Workers' Comp Plan Now!
Is your current plan the best fit for your business? Answer a few quick questions to get a tailored plan recommendation with our free Workers’ Comp Plan Adviser tool.
Tailored Solutions to Enhance Your Deductible Plan
Liberty’s extensive experience in captives ensures that you receive expert guidance, from program design to ongoing management.
Our services are tailored to enhance the performance of your captive plan:
Proactive claims management
Data analytics
Risk control services
Leverage Liberty’s unmatched expertise and advanced analytics to maximize the benefits of your captive insurance program. Our holistic approach ensures your captive is not only a risk management tool but a strategic asset that drives value for your business.
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About Workers' Compensation
Interested in taking control of your insurance program? Contact us to learn how a captive plan could transform your risk management strategy.