What is Captive Insurance, and Why Should I Consider it?

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Workers’ compensation insurance, as well as other types of commercial liability coverage, has traditionally been delivered through two distinct policy types – guaranteed cost and loss sensitive. Each policy type has potential benefits and challenges, depending on the insured’s specific situation. In addition to these traditional options, some companies with the financial capacity to do so have made the decision to avoid the insurance marketplace altogether and self-insure. While this may be an attractive option for some organizations, it is beyond the reach of most middle market companies. As customers’ needs have evolved, and their understanding of insurance has grown more sophisticated, an additional choice has emerged as a viable alternative – captive insurance.

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