There are likely even more myths about captive insurance companies out there, but these few tend to be the most prevailing in terms of misinformation.

1. If I Have Traditional Insurance, I Don’t Need a Captive Insurance Company

This is an extremely common myth that can be easily debunked. The way we start out with clients is we get copies of all of their existing insurance portfolios or insurance policies. Then, we go through all of those policies and we give the client a report that says what is included in their insurance and what is excluded from their insurance.

When you go through an insurance policy, there may be ten pages of information that's included and thirty pages of stuff that's excluded, no matter how good your insurance portfolio is and your insurance advisers are. There are certain things insurance companies just don't want to cover. Those excluded items can be put inside your captive insurance company. The result is better coverage with a more well-rounded insurance portfolio.

2. Captive Insurance is a New Thing

This couldn’t be further from the truth. Captive insurance is not a new concept in any stretch of the imagination. We've had them in the United States for over a hundred years, and they've existed globally for far longer. The majority of the captive insurance companies that have been used in the past were located in offshore jurisdictions, such as Bermuda, the Bahamas, and the Caymans. These are the common jurisdictions that people think about, but it seems like every day a new jurisdiction pops up here in the United States. So now, there's over thirty-two jurisdictions here domestically that do captive insurance companies.

When it comes down to it, captive insurance structure’s visibility has simply just increased in the United States. Captive insurance companies have been around for a long time.