There are a number of myths about captive insurance, so we’re bringing you the truth about the 20 most common myths in the market.
are only formed for tax reasons
One of the most common myths about captives is that they are only formed as tax shelters, to try and hide money from a government’s tax collector. However, this could not be further from the truth. A captive is primarily a risk management tool for a company, a way to better manage its risk. While there can be some cost savings when it comes to tax in some domiciles, captives are not formed just for tax reasons.
2. Captives are only formed in hard markets
A long-standing myth is that a captive is a short-term fix to market fluctuations.