Captive insurance vs self insured

Another advantage of captive insurance over fully funded self-insurance is that, in some of these types of arrangements, captive owners have the ability to share risk with other like-minded business owners.

In a captive insurance arrangement, however, the insured creates a more formal arrangement for insuring against its unique business risks via the creation of its own insurance company.

This type of self-insurance is called captive insurance. Like fully self-funded insurance, captive insurance is a risk mitigation strategy whereby a company insures itself against future losses.