15 Jan Why Captive Insurance Might Mean the Least Risk Possible for Your Business Dollars
My financial consulting firm, The Kahrilas Group has recently partnered with the nation’s premier independent risk management and captive insurance consulting firm, PACRisk, in order to inform current client (as well as potential clients) about the substantial benefits that captive insurance companies can provide.
What is captive insurance? R. Wesley Sierk’s, in his book Taken Captive does a good job at explaining, briefly, its overall purpose and practical benefits:
“Captives offer unparalleled benefits for the companies that use them. They allow a company to obtain insurance coverage that is tailored to its unique risks, rather than the standard coverages provided in commercial policies. Captives also allow a company’s risk to be judged on its own merit, rather than being … based on the risk of its entire industry. Captives also provide tax benefits for the companies who use them and often provide claims handling services that are substantially better than the service provided by commercial insurers.”
Business owners who spend over $250,000 a year on insurance (workman’s compensation, liability, casualty, etc.) would, as a rule, benefit from captive insurance. The wikipedia page for captive insurance correctly stating:
“Captive insurance companies are creatures of the Internal Revenue Code. Over 75% of the world’s captives are associated with U.S. insureds because these insurance arrangements are encouraged under the Internal Revenue Code. Because captives are sophisticated tax structures (having been the subject of dozens of cases and rulings by the IRS, the Tax Court and various appellate courts over the past 70 years) captive owners often engage tax professionals in addition to captive managers that simply provide administrative services.”
And then, goes on further to explain the tax benefits of captive insurance under the heading “Sheltering Income from Taxes,” stating:
“Captive insurance policies can be ‘designed so that the risks they insure are so unlikely that the captives will never pay out a claim and all those premiums will go back to the business owners or their heirs with little or no tax.'”
So, if your company spends a substantial amount of money on insurance, and would like to save as much as 40% on it’s insurance premiums and other costs annually, please visit our website: www.kahrilasgroup.com/services.php, to learn more about our solutions-driven, risk management strategies and our partnership with the nation’s premiere captive insurance provider, PACRisk.