Design a custom insurance model that meets your business’s needs. Save on taxes, protect your assets, and gain more control over your coverage.
If you're paying six figures in insurance or sitting on excess profit, you might be overpaying the IRS and under-protecting your business.
Captive Insurance is a strategy where a business creates its own licensed insurance company to cover risks specific to your business. This structure can create tax deductions, profit retention, and asset protection. A captive insurance company is a wholly-owned subsidiary created to provide insurance coverage for the parent company or a group of related businesses. Rather than purchasing insurance from a traditional insurer, the parent company insures its own risks through its own captive insurer.
Captive Insurance is a risk-financing tool, one that grants owners greater control (in both financial and risk management sectors) than is offered by traditional commercial insurance. 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 that strongly benefit your insurer at claims time. It is created to provide insurance to a noninsurance parent company and its affiliates or to an association. It may also provide insurance to other companies that join the captive as members.
While the upfront costs and complexity of forming a captive insurance company may be significant, for the right companies, the long-term benefits in cost savings, risk management, and financial flexibility can be substantial for business owners with an operation that has significant uninsured or underinsured risks and is looking to gain greater control over insurance premium costs. It’s IRS-approved, reduces taxable income, and allows you to retain unused premiums as profit. 80% of Fortune 1000 companies use this strategy.
→ $430K tax savings in Year 1 + $2M retained in captive over 5 years
→ $172K in deductions + full control over liability coverage
Captive insurance for small businesses provides several benefits, including enhanced risk management and substantial tax savings. Here’s why businesses choose us to design and implement their captive insurance strategies:
Our team specializes in setting up and managing captive insurance companies for small and midsize businesses. We guide you through the process to ensure full compliance with IRS regulations and help maximize the potential benefits.
Captive insurance offers the flexibility to design policies that fit your business's specific risks. Unlike traditional insurance, this allows you to tailor coverage to your exact needs, providing more predictable terms and better protection for your business.
With a captive insurance structure, you gain full control over claims and investments. You can manage how investment growth occurs and benefit from favorable corporate tax rates on investment income.
With a captive insurance company, your business can shift profits into a tax-deductible insurance structure, potentially reducing your tax liability. This can result in tax savings of 10-25% and the opportunity to retain underwriting profits, creating a new revenue stream for your business.
A captive insurance company provides an added layer of asset protection, keeping your business assets separate from operating risks. It also offers enhanced privacy and risk management, helping shield your business from unexpected liabilities.
We offer personalized consulting services to businesses of all sizes, ensuring that your captive insurance strategy is aligned with your specific goals and needs. Our experienced consultants work closely with you to develop a plan that best suits your business needs.
With captive insurance, your business establishes its own insurance company to cover its risks, rather than purchasing insurance from a traditional provider. This gives your business more control over how much you pay for insurance and what it covers. It also allows you to keep any profits made from insurance premiums, unlike traditional insurance, where the provider keeps those profits.
Small and mid-sized businesses, as well as larger companies, can benefit from captive insurance if they spend a significant amount on insurance or face predictable risks. If your business has high insurance costs or recurring risks, a captive insurance company can help reduce those expenses and give you more control over your coverage.
Starting a captive insurance company can incur some upfront costs, including setting up the insurance company, legal fees, and meeting government requirements. It might seem complex at first, but the savings from lower insurance premiums and better risk control can make it worthwhile in the long run. A captive insurance consultant can help you with the setup and make the process easier to manage.
With a captive insurance company, your business can cover a wide range of risks, including property damage, liability, workers’ compensation, and employee health benefits. Since the insurance is created by your business, you can design it to cover the specific risks your business faces.
Look for a consultant with expertise in setting up captive insurance for small businesses. They should offer a custom solution, ensure compliance, and guide you through the setup process. Contact Specialty Tax Advisors for expert captive insurance consulting. We’ll help you create a tailored plan and ensure a smooth, compliant setup.
Captives are mainstream when structured correctly. The IRS has clear guidelines, and we follow them to the letter.