Captive Insurance
Changes the Game
Whether you're navigating the complexities of farming, safeguarding a thriving medical practice, or driving growth in a dynamic mid-sized business, our tailored captive insurance solutions empower you to transform risk management into a powerful wealth-building strategy. Below are just a small selection of the many business categories that benefit from captives.
Agriculture
Agricultural enterprises face a unique set of risks, making captive insurance an invaluable tool for risk management strategies.
Agriculture is subject to highly variable risks, including weather, pests, disease, and market fluctuations. Captive insurance allows for policies customized to these specific exposures, which traditional insurance may not adequately cover. Examples include:
- Supplemental crop insurance to augment your existing crop insurance.
- Economic coverage for water-related issues, including water loss, crop damage, etc.
- Economic coverage for livestock diseases or environmental hazards.
- Protection against losses from supply chain disruptions.
Agricultural revenues and returns can be highly volatile. Captives can:
- Smooth out these fluctuations, providing greater financial predictability.
- Allow enterprises to retain profits.
- Generate investment income from captive reserves.
Some agricultural risks, such as certain environmental or labor related liabilities, may be difficult to insure in the traditional market. Captives can fill these coverage gaps.
Captive insurance can contribute to the long-term financial stability of farming operations by building reserves and providing a buffer against unexpected losses.
Healthcare Practices
Captive insurance can offer several distinct advantages to healthcare practices, which often face unique and specific risks.
Captive insurance allows these practices to create policies that address their unique exposures, such as:
- Professional liability related to specific procedures.
- Risks associated with advanced technologies used in their practices.
- Potential liabilities related to patient data privacy, cybersecurity, employee issues, and reputation harm.
By establishing a captive insurance company, practices create a new way to generate investment income. Your captive retains the underwriting profits, which can be reinvested.
Many traditional insurance providers may not provide coverage for niche risks. For example, a dermatologist might have risks associated with specialized laser treatment, or other cosmetic procedure, that standard insurance may not cover. A captive insurance company could be set up to cover those specific risks.
Midsized Businesses
Captive insurance offers midsized businesses a pathway to greater financial control, tailored risk management, and increased transparency in their insurance programs.
Midsized businesses often find that standard commercial insurance doesn't provide good economic value. Captive insurance allows them to:
- Retain underwriting profits when claims are lower than expected.
- Gain greater predictability in insurance costs, reducing the volatility of market-driven premiums.
- Generate investment income from captive reserves.
Midsized businesses may have unique operational risks that standard policies don't adequately address. Captives enable them to:
- Tailor coverage to specific industry risks, such as supply chain disruptions, product liability, cyber risks, or employee-related issues.
- Fill gaps in existing coverage or insure risks that are difficult to place in the traditional market.
Captive insurance can improve cash flow by:
- Allowing for more flexible premium payment schedules.
- Reducing the overall cost of insurance over the long term.
- Allowing the business to retain and invest money that would have otherwise gone to a commercial insurance company.
Wealth and Estate Planning
Captive insurance facilitated by 3F, presents a powerful tool for clients, enabling sophisticated risk management, estate planning, and wealth preservation strategies. By leveraging 3F's expertise, planners can seamlessly integrate this valuable tool into their client offerings.
For clients with substantial assets, traditional insurance may not adequately address unique risks. Captives allow for:
- Tailored coverage for specialized assets, such as art collections, private aircraft, or unique real estate holdings.
- Protection against risks that are difficult or expensive to insure in the open market, such as reputation risk or specific legal liabilities.
- Mitigation of risks associated with family offices or complex business structures.
For clients with closely held businesses, captives can ensure business continuity by:
- Providing coverage for key person risk or loss of key person.
- Protecting against economic loss from business disruptions.
- Structuring solutions to facilitate wealth transfer to the next generation.
- Captives provide clients with greater control over risk management and insurance programs leading to greater profitability.
- Captives offer flexibility in designing coverage.
- The claims process is faster, more efficient, and less burdensome.
Discover Tailored Insurance Solutions
Unlock the potential of customized captive insurance designed specifically for your unique business needs.