What coverage options are available through captive insurance?

Captives can include most standard policy types, such as: Commercial Auto Cyber Security & Terrorism Employee Healthcare Extended Warranty & Service Contracts General Liability Product Liability Professional Liability Workers Compensation They can also offer highly specialized coverage (e.g., credit risk or asbestos-related issues). If you can imagine it, they can create it.

How does captive insurance compare to traditional insurance?

Traditional insurance: You pay premiums, the carrier absorbs the risk, and any unused premiums don’t return to you. Group captive: You effectively own a piece of the insurance alongside others. Unused premiums and investment income can be returned to members. Operational costs are often lower, and you gain underwriting control, transparency, and potential profit returns. However, you assume more risk as claims are paid from your own premium pool.

What kind of results can members expect?

Clients often experience: Smaller and more predictable increases at renewal Renewals that are less disruptive year to year The chance to get money back from a portion of their stop-loss premium

What makes a company an ideal captive candidate?

Companies that fit well: Are privately held Have 50+ eligible employees enrolled Are already self‑funded or willing to implement it Are financially secure Have a strong safety culture and effective loss control Maintain high accountability

Why should my company consider joining a captive?

Captives can offer: Short‑ and long‑term savings More control over your insurance program More stable and predictable premiums Group leverage Increased employee productivity These benefits apply to both employee benefit group captives and property & casualty captives.

What is a group captive and how does it work?

A group captive functions like a pooled bank account: members contribute premium funds and the account pays for claims. In good years, unused funds may be returned to members. In challenging years, there's no return, but liability is limited by a maximum amount. Risk is tiered: large risks are transferred to a stop-loss insurer, medium risks are shared among members, and small risks are retained by employers.

What is a captive (captive insurance)?

A captive is an insurance option used for managing risk, typically owned by the insured(s). It can be structured as: Single parent captive: owned by a single company Group captive: formed by multiple companies, often enabling small employers to operate like large ones

Risk Management and Captive Insurance

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What our members say

I wanted to take a moment to sincerely thank you for arranging the direct billing agreement with a facility. One of our employees was facing a serious battle with addiction and severe depression and urgently needed inpatient care. Thanks to your compassion and quick action, they were able to get the help they needed.

I’m happy to share that they are doing incredibly well now—full of energy and optimism. I check in with them weekly, and the progress the employee's made has been nothing short of inspiring. In fact, they were recently promoted to a management role.

Your support made a real difference, and I’m so grateful for it.

J

Joey Richman, SHRM-CP
Human Resources Manager, General Distributing Co.

Did you know?

Leavitt Great West’s Tribute captive is one of only 13 captives worldwide to have obtained Berkley Accident and Health’s Risk Management Certification.

What is a captive?

A captive is a medium for taking risk.

It can be formed by a single company (a single-parent captive), or by multiple companies (a group captive).

Group captives can be made up of companies in the same industry or different industries, and allow small employers to act like large employers.

A medical stop-loss captive is a form of self-insurance where multiple employers come together to collectively fund their employee benefit programs.

By pooling resources, companies can gain more control over their benefit costs, customize plans to meet their specific needs, and potentially save money in the long run. This approach allows for greater flexibility and stability in managing employee benefits.

How does a group captive work?

Imagine a shared bank account, where everyone puts money in and then some is taken out when a claim occurs. In good years, members will receive any unused funds back from the captive. In bad years, members will not receive funds back, but they know their costs will be capped at a maximum liability amount.

Risk is retained, shared, or transferred, depending on how unpredictable and costly it is.

Largest risks are transferred to the stop-loss insurer.
Medium risks are shared with other employers.
Smallest risks are retained (kept) by the employer.

Why join a captive?

Benefits of Employee Benefit Group Captives

Short-term savings
Long-term savings
Enhanced control
Limited volatility
Group power
Increased employee productivity

Benefits of Property & Casualty Captives

Greater control over your insurance program
Increased flexibility in program design
Enhanced program and claims transparency
Increased profits and cost stabilization
Enhanced loss protection services
Opportunity to create a new profit center

Is a Leavitt Group captive right for you?

If your company has robust loss control, a great safety culture, and secure finances, you may benefit from a captive insurance policy.

Ideal Captive Candidates

Privately held
50+ eligible employees enrolled
Currently self-funded or willing to implement upon inception
Financially secure
Desire to manage risk
High accountability

Our Clients

Receive lower average stop-loss renewal increases
Experience more stable renewal actions
Can receive a portion of their stop-loss premium back

Our property & casualty group highlights (since 2016)

National footprint

Industry-best loss control resources

Average rate reduction year over year

What captive coverage options do I have?

Captive insurance coverage can include many, if not all, standard policies, such as:

Commercial Auto
Cyber Security and Terrorism
Employee Healthcare
Extended Warranty and Service Contracts
General Liability
Product Liability
Professional Liability
Workers Compensation

It can also provide industry-specific coverage and limits not available in the standard commercial market. These risks can include almost anything you can think of, ranging from credit risk to asbestos poisoning. You dream it — we’ll build it.

Cost comparison:
traditional insurance vs. group captive

Traditional Insurance

You get coverage, but any unused premium profits do NOT go back to you.

In traditional insurance, you pay a premium to your insurance company for coverage. Most of that premium goes towards operating costs, which may include shareholder distribution, brick and mortar locations, commercials, CEO, front insurance, and re-insurance. The remainder is invested and returned to the insurance carrier.

The rest of the premium goes towards paying claims. There is little risk to you because the insurance company is paying those claims. However, you have little to no control of claim decisions, and no ability to receive underwriting profit or investment income.

Group Captive

You get coverage, and any unused premium and investment income comes back to your business.

Captive insurance allows you (the insured) to own an insurance company with like-minded companies and bring the underwriting profit and investment income back to your company. There are still operating costs, which may include front insurance, re-insurance, loss control, and claims administration, but the cost to cover these is often lower than in traditional insurance.

You have control of your insurance, stabilization and suppression of premiums, company ownership with the creation of a profit center, operational transparency, return of underwriting profit and investment income back to members, choice of legal representation, and ultimate control on claims. However – there is both risk and reward, as claims will be paid out of your premium.

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Your captive insurance team

Frequently Asked Questions