What Is Captive Insurance?
… paid to traditional insurers. Captives and reinsurance companies often offer a more limited breadth of coverage and fewer binding regulations than traditional insurance companies, making them attractive to companies that face unique vulnerabilities traditional insurers won’t cover. Advantages of Captive Insurance Captives are typically formed for the purpose of risk management. A business can substantially lower insurance costs in comparison to premiums paid to a commercial insurer and the captive can provide coverage that is unattainable or inadequate in the private market. In addition to the opportunity to obtain more specialized coverage for the company’s risks, the parent …
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