We're hosting a webinar titled "An Introduction to Captive Insurance" on Thursday September 29. You can register at this link.
If you're unsure if your company is a viable captive candidate, we'll perform a free evaluation It starts with a conversation that lasts between 30-60 minutes and is followed by an analysis of your currently in force insurance policies.
We formed and operate the first series LLC in Montana (named Aegis) for captive insurers. Several other firms provide key services such as accounting, audit and actuarial work. Please contact us at 832.330.4101 if you'd like to discuss forming a captive for your company
There are several reasons why insurers offer employment liability as a separate policy, starting with the potential cost of each claim:
The reality is that defending a discrimination or other employment lawsuit is expensive. Defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment (which, much more often than not, is the case), the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial.
Most employers, if acting rationally, will chose to retain an employee instead of assuming the risk of a $250,000 legal bill with an uncertain outcome. Moreover, employers cannot avoid this risk simply by settling every claim that is filed, lest the company risk the perception of being an easy mark by every ex-employee.
Second, there’s a 10% chance of this risk occurring, which is a higher probability than insurers desire. The following causes of action are the most common: discrimination, discriminatory discharge, retaliation and harassment (for further information, please see the EEOC database located at this link).
The higher probability of occurrence combined with large payouts makes this risk perfect for a captive. Writing this policy in your captive provides two distinct advantages over third party policies: