What is Captive insurance?
When you purchase your insurance for your medical practice from an insurance company that you own, it is “captive insurance.” It is called “captive” because you own and control it (licensed, regulated, underwritten, managed, and maintained just like any other insurance company). However, unlike insurance companies that sell insurance to the general public, your captive sells insurance to you and practices owned by you or affiliated with you. Your practice pays premiums to your captive in return for insurance covering your practice’s potential liabilities and risks (i.e., you can tailor your coverage). The claim forms are prepared and submitted to the captive insurance company for payment if and when claims occur.
The purpose of insurance coverage is to protect you and your medical practice from certain types of financial risks that may arise daily. With traditional insurance (including malpractice insurance), costs can be high, and in many situations, many types of losses/damages are not covered, and deductibles can be high. Captive insurance is tailor-made according to your needs, and the premiums are paid to your captive insurance company.
Above all, the profits of the captive insurance belong to you as you own the captive.
Part of the process is identifying the business risks that may be insurable through the captive insurance company. If you are interested in learning more about captive insurance and seeing if it is fit for your medical practice, don’t hesitate to contact us for further discussion.
If you have any questions, please call (714) 569-1000.
