Is a Captive Right for You?

It all starts with the question ‘is a captive right for you?

We will help you through this decision making process. In many ways it is an educational exercise and we will explain both the advantages and the pitfalls of captives. This is a period of consultation in which we will help you understand whether a captive fits in with your company and the way you do business.

A captive insurance company is a long term venture not a quick fix. It is also primarily a risk management tool. Although there sometimes may be tax benefits associated with a captive these should never be the driving force of its creation.

Like any other new business, a captive may take some time to become established and profitable. It is not unknown to make a loss in the first year, but the long term benefits far outweigh any initial setbacks. The minimum period of operation should be at least five years and the majority of captives continue for decades.

Starting a captive is an investment and like any other investment, it is important to have an exit strategy or a clear understanding of how you are going to get the benefits of the investments and eventual return of the funds. There are many ways to achieve this and exploring these options is an important part of the consultation process.