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Captive Insurance Companies

Despite their best efforts, principals of development and construction companies are struggling with sky rocketing insurance premiums, a cost that dramatically impacts their profitability. Over the last 10 years, they have established quality-controls programs and their generals and subs have switched to less claims-prone materials and methods – all of which effectively reduce the risk of potential liabilities. Yet every year clients are paying out hefty premium dollars while the insurance companies are reluctant to grant a claim, if they grant it at all.

As a result, those in the construction industry are turning to an alternative insurance vehicle known as a captive insurance company. Set up and controlled by the owner, a captive insurance company assumes the risks – and the rewards – held by traditional commercial carriers. The advantages of selection of risks, liabilities control, premium retention and ultimately, return of profits to the owner of the captive, are highly attractive in today's insurance climate.