Home      Login

Abstract: 

Like many businesses, companies in the financial services industry can generally benefit from the flexible coverage available through captive insurance company arrangements. Financial services companies may have an especially high degree of exposure because of the large amounts of assets they have under management, and the perception that they have “deep pockets.” Moreover, financial service companies face various risks for which coverage may be commercially unavailable, unattractive due to prohibitively high premiums. Available commercial policies may have large coverage gaps. Among other benefits, captive insurance companies offer the flexibility to underwrite these and other commercially reasonable risks. Although in the past the IRS aggressively resisted captive insurance companies, both the IRS and the courts now respect captive insurance as a legitimate risk management arrangement—as long as it meets all legal requirements.

Keywords: captive insurance, coverage gaps, cyber risk, employment claims, legal liability coverage, commercial crime/employee fidelity coverage, regulatory change coverage, administrative actions policies

Affiliations:  1: Atlanta Law Group; 2: The Hale Stewart Law Firm.