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Captive Programs
 
HMS Insurance recognizes the benefits that will accrue to qualified firms through the use of a captive insurance company. Accordingly various alternatives were explored. We concluded that the best results for members could be achieved by combining our expertise with several companies specializing in Captive alternatives.

A captive is a closely held insurance company which provides coverage for and is controlled by its owners. Property and casualty insurance coverages are provided to member companies by their own captive company.

The Advantage:
The principal advantage of a captive is that members may achieve control over their long-term insurance costs. While the actual savings that any one company may realize depends upon a multitude of factors, the potential for sizable reductions in cost certainly exist. Moreover, captive ownership allows companies to have the availability of quality insurance without being at the mercy of the traditional insurance market.

Covered risks include property and casualty business insurance, such as:
    Workers' Compensation: Coverage(s) A&B
    General Liability including Products Liability
    Auto Liability including Physical Damage
Other general business insurance, such as D&O, Crime, Boiler & Machinery, E&O, Sexual Harassment & Termination and Umbrella Liability may be purchased on an individual basis which should further enhance the potential for savings.

Why Costs are Generally Lower:
There are four key reasons for cost reductions over conventional insurance.
  • Premiums are based on the loss experience of each member company rather than on insurance market conditions.
  • Fixed costs are lower. Marketing costs are reduced.
  • Only companies with good loss experience are accepted into a captive.
  • Enhanced loss prevention activity will enable many companies to further reduce their incidences of loss and hereby increase their savings potential.
Members can control and manage their own risk exposures!

Qualifications for Captive Participation:
  • Loss Experience that is better than industry average.
  • Management Commitment to programs for loss prevention and control.
  • Strong Financial Condition
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