Captive Insurance

The captive industry is on the rise and showing no signs of slowing down. According to Captive Insurance Times, 14 billion dollars in premium income entered the captive market in 2020. Captive insurance premiums currently account for more than half of all commercial insurance premiums globally. With all the buzz about captives, you might wonder if it could help your construction business.

The best way to answer this question is to first define the captive insurance process. Captive insurance is a self-insurance alternative in which a parent company or group of companies create a licensed insurance company to provide coverage for itself.

There are many types of captives, but for this article, we’ll focus on group captives, which are the most common type of captive for middle-market construction companies. Group captives are owned and controlled by multiple non-related organizations. It is formed as an independent entity and insures its owners’ risks.

Group captives are ideal for construction companies because contractors pay high rates for the three coverages that are often included: workers’ compensation, general liability, and auto liability. Although a member is not required to have all three lines of coverage in the group captive, workers’ compensation is almost always included.

As you are aware, the construction industry is a very competitive one, and having a competitive advantage over your insurance costs can be a substantial benefit. Consider this: if your organization can pay 10% to 50% less for workers’ compensation than your competitors, how much work will you gain and how profitable will it be?

Finally, captives are significant because they provide control over your premiums, claims, and loss control resources, among other things. With greater control over your annual premium, it’s a CEO or CFO’s dream to be confident when budgeting or bidding work three to sixteen months in advance. Knowing that their renewal price is more consistent offers them an advantage in ensuring that the construction jobs are properly fit.

About the Author

Eric Pach
Eric Pach
Eric serves as Partner and Captive Practice Leader at INSURICA Southwest. With more than 15 years of experience and knowledge, he is a recognized leader within the construction industry. Eric enjoys developing strong relationships with his clients and serving as their trusted advisor.

Share This Story

Stay Updated

Subscribe to the INSURICA blog and receive the latest news direct to your inbox.

Related Blogs

Enhancing School Security: Practical Strategies for Safer Campuses

June 17th, 2025|Blog, Education|

Enhancing school security is one of the most pressing responsibilities for education leaders today. As school campuses evolve, so too must the systems that protect them. For administrators, safety professionals, and district decision-makers, creating a secure learning environment means taking a proactive, layered approach that includes physical security, training, technology, and community involvement.

5 Common Cybersecurity Mistakes and How to Avoid Them

June 16th, 2025|Blog, Risk Management, Trending|

All organizations, regardless of their size or industry, are at risk of being targeted by cybercriminals. These malicious actors can conduct cyberattacks, leading to significant financial, operational and reputational damage that can be difficult or impossible to recover from. Fortunately, solid cyber hygiene practices can reduce the likelihood of data breaches and other cyber incidents from occurring, and many of these practices are relatively low-cost and easy to implement.

Insurance Coverage Basics For Boatowners

June 15th, 2025|Blog, Personal Insurance|

A small boat, such as a canoe or other un-motorized boat, is typically covered under the personal property portion of your homeowners insurance policy. If you own a larger, faster boat, you'll need a separate boatowners insurance policy. A typical boatowners insurance policy is designed to protect your boat, motor, equipment, and passengers. It affords similar coverages to those you typically have for your car including:

Go to Top