A Small-Business Owner's Guide To Captive Insurance

Law360, Los Angeles (January 13, 2016, 3:25 PM EST) -- A rising number of small-business owners have opted in recent years to form their own captive insurance companies — in-house insurers created specifically to cover risks of the parent company — to fill in gaps in coverage and reap tax benefits. Here, Law360 examines the potential benefits and pitfalls of small captives.

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While Fortune 500 corporations have been setting up captive insurance companies for decades to help manage their risks, more and more small-business owners have recently taken to establishing captives in order to shore up their insurance coverage programs.

A small business can form a captive, which...

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