All Risk Logistics

HELPING BUSINESSES BALANCE RISK

 
 
All Risk Logistics

HELPING BUSINESSES BALANCE RISK

 
 

WHY CONSIDER
CAPTIVE INSURANCE?

Every risk management solution has its own benefits and associated risks.

For many corporations, captive insurance provides a way to manage risk in a formal, measured and tax-effective manner. In its simplest form, a captive is an insurance company that is wholly owned by one or more non-insurance companies to insure the risks of its owner only.

As provided by the Tax Reform Act of 1986, captives allow small to mid-size businesses to employ a valuable risk management tool that complements standard commercial insurance programs.

COST & EXPECTATIONS


  • Insurance and tax benefits that potentially far outweigh cost
  • All Risk is structured to limit your cost and scale the cost to the size of your investment
  • Turnkey operation with minimal time requirements by owners

WHY CONSIDER
CAPTIVE INSURANCE?

Every risk management solution has its own benefits and associated risks.

For many corporations, captive insurance provides a way to manage risk in a formal, measured and tax-effective manner. In its simplest form, a captive is an insurance company that is wholly owned by one or more non-insurance companies to insure the risks of its owner only.

As provided by the Tax Reform Act of 1986, captives allow small to mid-size businesses to employ a valuable risk management tool that complements standard commercial insurance programs.


COST & EXPECTATIONS


  • Insurance and tax benefits that potentially far outweigh cost
  • All Risk is structured to limit your cost and scale the cost to the size of your investment
  • Turnkey operation with minimal time requirements by owners

WHY CONSIDER
CAPTIVE INSURANCE?

Every risk management solution has its own benefits and associated risks.

For many corporations, captive insurance provides a way to manage risk in a formal, measured and tax-effective manner. In its simplest form, a captive is an insurance company that is wholly owned by one or more non-insurance companies to insure the risks of its owner only.

As provided by the Tax Reform Act of 1986, captives allow small to mid-size businesses to employ a valuable risk management tool that complements standard commercial insurance programs.

COST & EXPECTATIONS


  • Insurance and tax benefits that potentially far outweigh cost
  • All Risk is structured to limit your cost and scale the cost to the size of your investment
  • Turnkey operation with minimal time requirements by owners

COVERAGES TO CONSIDER


Business Interuption


Including loss of income and additional expenses resulting from an interruption to your supply chain.

Cyber Risk


Resulting from unauthorized access to your business’s computer system. This also can include cyber extortion and expenses related to ransom viruses. Captive coverage extends to expenses associated with restoring lost data.

Loss of Key Customer


From a fortuitous event, such as insolvency, merger, takeover or a change in management or operations.

Loss of
Key Employee


Including loss of revenue and extra expense resulting from the loss of a key employee, temporarily or permanently, from a fortuitous event. Death, other than accidental death, would be excluded.

Deductible Reimbursement


Coverage for amounts paid by the Insured that are not recoverable under the policy as the result of falling within the Self-Insured Retention or Deductible specified within the policy.

Administrative
Actions


Coverage for defense costs, fines and assessments and loss of revenue from any private or governmental regulatory action or disciplinary action pertaining to the business, trade or profession of the Insured.

Express or Implied Warranties


Coverage for amounts paid to satisfy express and implied warranties or guaranties offered by the Insured to its customers in relation to work performed by the Insured.

Litigation
Expenses


Coverage for litigation expenses incurred by the Insured with regards to all litigation not covered by other insurance whether as a defendant or as a plaintiff.

Product Recall Expenses


Coverage for expenses, including shipping, incurred by the Insured to withdraw and repair or replace product sold or distributed by them.

Loss of
Key Supplier


Coverage for loss of a key supplier affecting significant revenue from a fortuitous event, such as insolvency, takeover, merger, change of management, or discontinuation of a product line or business activity.

Legislative or Regulatory Change


Coverage for loss of income and extra expenses resulting from a change in federal, state or local jurisdictional laws or regulations affecting the Insured’s industry and causing a financial loss to the Insured’s business.

Reputational Damage


Coverage for loss of revenue and extra expenses suffered as the result of a damaging public announcement, publication, media broadcast, and/or internet post specifically naming the Insured or the Insured’s business.

Work Stoppage


Coverage for circumstances, other than physical damage to the Insured’s work premises, that prevent, fully or partially, the Insured from using or entering the premises and carrying on normal business operations.

Wrongful Acts


Coverage for liability arising out of any actual or alleged breach of duty, negligence, or error or omission committed in the conduct of the Insured’s business or profession that is excluded, limited or not covered in the Insured’s standard insurance program.

Standard Coverage


Coverage can be provided for standard market policies including but not limited to Employment Practices Liability, Directors & Officers Liability, Crime, Employee Dishonesty, et al. In addition, coverage can be provided for exclusions within standard coverage and limits can be provided in excess of what standard policies provide. This excess and exclusion coverage can include but is not limited to flood, earthquake, and wind.

Financial Benefits


  • A small insurance company (captive) with annual premium income not exceeding $1.2 million pays no tax on its underwriting profits but is taxed solely on its investment income. In this case, the business that pays premium to a captive deducts the premium expense while the captive pays no tax on the underwriting profits.

  • Actual cash surpluses are being created within the captive that could be used to pay a claim and offset future cash losses related to the risks insured through the captive.

  • When any future cash surpluses are distributed by the captive to the owners, the distributions would be taxed at capital gains rates or dividend rates which are about 50% less than the marginal tax rates at the time the deduction was taken.

What Are The Incentives?


  • Manage risks in a formal, measured, tax-efficient manner

  • Captive coverages complement standard commercial insurance programs

  • An efficient means to build up a contingency fund for the payment of future claims using pre-tax dollars

  • Underwriting profits are not taxed and can accumulate for 3-5 years or more creating permanent tax differences that approach 50%

  • Flexibility in accessing funds in the captive by way of dividends or loans

Tax Incentives


Within the captive, actual cash surpluses are being created that could be used to pay a claim and offset future cash losses that are related to the risks insured through the captive.

A small insurance company (captive) with annual premium income that does not exceed $1.2 million will pay no tax on its underwriting profits; it is taxed solely on its investment income. In this case, the business that pays premium to a captive deducts the premium expense while the captive pays no tax on the underwriting profits.

When any future cash surpluses are distributed by the captive to the owners, the distributions would be taxed at capital gains rates or dividend rates, which are about 50 percent less than the marginal tax rates at the time the deduction was taken.

*All Risk Logistics, Atlas Insurance Management, and its representatives do not offer tax advice.
The information provided should not be considered as tax or legal advice. Please consult your tax advisor and/or attorney regarding your individual circumstances.

WHY ALL RISK?



  • Conservative Approach

  • Leading Risk Management and Captive Expertise

  • Turnkey Captive Management Services

  • Approved Leading Actuarial Services

  • Onshore Reinsurance Facility

  • In-House Underwriting Process

  • In-House Accounting and Claims Service

  • All Risk and Atlas Insurance Management Partnership

 

CONTACT US


Joey Herman
Call Toll Free: 800.789.1139
Local Call: 336.337.7199

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