Which Types of Coverage Are Best Suited for a Captive?
This question comes up often, and many only think in the most general terms. But there are many, many types of insurance coverage that a properly structured Captive can be created to cover. Here is a list of coverage's that are good candidates to have in a company owned Captive:
Liability Coverage - Coverage's for which a liability to the business exists but may be covered in the standard insurance market at a high premium.
- Advertising Liability
- Anti-Trust and Unfair Competition Liability
- Commercial Vehicle Insurance
- Construction and Design Defects Insurance
- Copyright Infringement
- Deceptive Trade Practices
- Directors and Officers Liability Insurance
- Employment Practices Liability Insurance
- Environmental Liability Insurance
- Errors and Omissions Insurance
- Libel and Slander Insurance
- Malpractice for Licensed Professionals
- Performance Liability Insurance
- Product Liability Insurance
- Structural Defects Liability Insurance
- Title Insurance
- Trademark Infringement Insurance
Casualty Coverage - Coverage's for which the potential for loss to the business exists but may be covered in the standard insurance market at a high premium.
- Administrative Action by Governmental Entities Insurance
- Advertising and Marketing Failure Insurance
- Anti-Trust and Unfair Practices Insurance
- Business Credit Loss Insurance due to loss of creditworthiness
- Business Dirty Tricks Insurance due to aggressive competitors
- Business Document Forgery and Counterfeiting Insurance
- Business Extortion Insurance
- Business Interruption Insurance
- Business Reputation Insurance
- Cargo Loss Insurance
- Cash In Transit Insurance
- Commercial Crime Insurance
- Communications Breakdown or Interruption Insurance
- Computer Loss of Data Insurance
- Computer “Hacker” Insurance that results in loss to the business
- Computer Software Liability Insurance
- Computer Virus Insurance which resulted in loss of business data due to infection
- Confiscation and Expropriation Insurance
- Contract Frustration Insurance
- Copyright Infringement
- Counterfeiting of Product “Loss of Profit” Insurance
- Currency Risk Insurance
- Delay in Start Up Insurance
- Eminent Domain Insurance
- Employee HIV Contamination Insurance
- Financial Crime and Embezzlement Insurance
- Force Majeure Insurance
- Foreign Operations Insurance
- Goods In Transit Insurance
- Judicial and Administrative Delay Insurance
- Identified Market Risk Insurance
- Insurance Failure and Bad Faith Insurance
- Lawsuit Interruption Insurance
- Labor Cost Insurance
- Legal Expenses Insurance
- Lender Failure Insurance
- Loss of Key Customer Insurance
- Loss of Key Employee Insurance
- Loss of Goodwill Insurance
- Machinery Breakdown Insurance
- Patent or Trademark Infringement Insurance
- Political Risk Insurance
- Product Flooding Insurance
- Product Launch Insurance
- Product Tampering Insurance
- Production Benchmark Insurance
- Property Damage Insurance
- Trade Secret Insurance
- Strike and/or Labor Unrest Insurance
- Terrorism Insurance
- Theft of Company Property or Funds Insurance
- Trade Credit Loss Insurance
- Patent or Trademark Infringement by another Insurance
- Warranty or Guarantee Insurance
- Weather Risk Insurance
Excess Coverage
- Excess Insurance above the limits of other coverage's, be that of a captive or standard risk insurance
Bonds
- Buyer Credit Risk bond
- Customs Duty Bonds
- ERISA Guarantee Bonds (Limited to Only Domestic Domiciles)
- Fidelity and Surety Bonds
- Performance Bonds
There are many, many types of risk that businesses “incur” every day which are well suited for a captive insurance company. A captive can issue an insurance policy gaining the advantage of paying premium to an entity you own, not to an insurance company, and building up an asset on a tax advantaged basis.
For a more detailed explanation, please give us a call.
