Captives are -- most definitely -- not for everybody. The company setting up and eventually helping to run the captive must commit time and effort to forming and running its insurance subsidiary. Most importantly, the parent must be large enough -- in and of itself -- to achieve "risk distribution" -- a statistical concept required by federal law.
While there are no absolute rules, here are some minimums to consider:
1.) 25 employees
2.) $10 million in gross revenue, minimum
3.) An organizational commitment to form and run a new company
4.) While it's not required, it helps if the company has had past problems with their insurance coverage. For example, escalating premiums, disputes with the carrier, or inability to procure a key coverage.
While there are no absolute rules, here are some minimums to consider:
1.) 25 employees
2.) $10 million in gross revenue, minimum
3.) An organizational commitment to form and run a new company
4.) While it's not required, it helps if the company has had past problems with their insurance coverage. For example, escalating premiums, disputes with the carrier, or inability to procure a key coverage.