Captive Insurance: Avoiding the Risks
Marty McCarthy, CPA, CCIFP
Focused on You. Dedicated to Your Success.
July 17, 2018

In an article entitled “ Captive Insurance: Avoiding the Risks ” published in the Journal of Accountancy on June 1, 2018, by Philip Garrett Panitz, Esq., LL.M., the author discusses the pros and cons of captive insurance. Case studies and examples are provided to educate business owners on the benefits and potential challenges of captive insurance. 

According to Investopedia “a captive insurance company is a wholly owned subsidiary company that provides risk-mitigation services for its parent company or a group of related companies. A captive insurance company may form if the parent company cannot find an outside firm to insure them against particular business risks, if the premiums paid to the captive insurer creates tax savings, or if the insurance provided is more affordable or offers better coverage for the parent company's risks.”

Although captive insurance can be especially cost- and tax-effective, the IRS often challenges this type of program. Even so, if created correctly, captive insurance can be a powerful tool.

Feel free to call any member of our team at 610-828-1900 with questions on how you can benefit from captive insurance. You can also contact me at . We are always happy to help.
Martin C. McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company, PC

Disclaimer This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).