Captive Insurance and Enterprise Risk Coverages


Captive Use Trends & Innovations | Mark Sims | President—Global Business Development | Captive Alternatives, LLC


Mark Sims, president—global business development at Captive Alternatives, LLC, says businesses want to know what type of risks they can insure inside their own captive insurance company and they are often concerned about enterprise risk such as loss of a key customer, weather-related events, data breaches, or cyber attacks.

These coverages can be purchased in the commercial market, but they typically are not because the probability of these events is low. However, if such events occur they can be financially catastrophic to the business. Prefunding these risks inside a captive insurance company can help the business owner sleep better at night.

If claims don't occur, businesses can keep the underwriting profit and investment income based on good risk management and will be covered if an event ever occurs. Business owners insure these enterprise risks in addition to workers compensation, general liability, or healthcare risks inside a captive insurance company.