Is a captive insurance program right for my trucking company?
Commercial insurance broker
A captive insurance program can be a good fit for a trucking company with strong safety results, stable finances, and a long-term view, but it isn't right for everyone. A captive is an insurance arrangement where your company, alone or with others, takes on a share of its own risk and participates in the underwriting results.
There are several types. A single-parent captive is owned by one company. Group captives bring together multiple companies, often in similar industries, that share risk and results. Rent-a-captive and cell structures let companies participate without forming their own entity. Each has different costs, capital requirements, and levels of control.
The appeal is that companies with better-than-average loss experience can benefit from their own results rather than subsidizing the broader market. Captives can also provide more stability over time and give members more say in safety and claims practices.
The tradeoffs are real. Captives typically require capital or collateral, a multi-year commitment, active participation in risk management, and tolerance for volatility. A bad year affects you directly. Group captives also tie part of your results to other members.
A captive tends to make the most sense when your safety program is mature, your loss history is consistent, and leadership is committed to staying in for the long run. Feasibility work, including financial modeling and review with tax and legal advisors, should come before any commitment.