Although commercial coverages exist to cover potential losses, most policies have gaps in coverages, leaving self-storage businesses owners vulnerable to high out-of-pocket costs.
With the formation of a captive insurance company, business owners can thwart risks with tailored coverages, custom-built to address the specific risks of their organizations. Business owners in the self-storage industry who form captives under Section 831(b) of the Internal Revenue Code may also be eligible for ancillary financial benefits, such as a 0% Federal income tax rate on the captive’s underwriting profits, secured loans from the captive to their operating company, and dividends.
These benefits can be fully realized when they partner with a captive management team that practices a multidisciplinary approach, such as Capstone Associated Services, Ltd.
Why Form a Captive?
Forming your own insurance company gives you control over your risk management and provides great ancillary benefits.
Captives also require the expertise of professionals who understand the legal, tax, and regulatory requirements. Partnering with a captive management firm with in-house legal expertise ensures your insurance company is compliant with various regulatory bodies.
Captive insurance companies are actual property & casualty companies, legally established to insure the risks of their related businesses. They are regulated by an insurance commissioner of a U.S. state or foreign jurisdiction, i.e. a captive domicile. The domicile ensures that captives adhere to regulatory changes, tax laws, and other provisions. Most experienced domiciles offer operating flexibility, regulatory compliance, and a progressive legislative environment. Onshore domiciles such as Delaware, and offshore domiciles such as Anguilla, can offer mid-market self-storage businesses the support and oversight they need to operate according to federal and state regulations.
One of the main features of a captive insurance company is that policies can be used to cover uncommon risks. Through a captive insurance company, coverage can be designed to account for business interruption risks or the loss of key staff services. Similarly, business that conduct work operations overseas may be faced with risks not covered by their conventional policies. Captive coverages can be designed to cover industry or company-specific risks. An on-site risk assessment or feasibility study can determine what true exposures exist within a business.
Capstone Associated Services, Ltd. – Unmatched in the Captive Industry
For over CAP_YEARS_NUMBER years, Capstone has supported mid-market businesses in the legal and regulatory processes associated with forming their own captive insurance companies in collaboration with lawyers, insurance professionals and certified accountants. Unlike almost all other captive insurance management companies in the industry, our turnkey service providers do not disclaim tax and legal support. We have a proven track record for standing with our clients.
We work in alignment with our affiliated law firm, The Feldman Law Firm LLP, which employs experienced attorneys who specialize in corporate and business planning. We will always keep you up-to-date on important developments. Capstone leverages an award-winning, attorney-led, multi-disciplinary team approach. For one turnkey fee, we will retain and directly compensate all the players needed to analyze, design and implement an appropriate alternative risk strategy for your business.
We’re dedicated to providing comprehensive mid-market captive planning. Capstone and The Feldman Law Firm LLP have the expertise to carry out critical aspects of the planning, including insurance, tax, and legal.
The pitfalls of working with a captive insurance manager who doesn’t have the right experience can be disheartening for any self-storage business owner who has invested time and money into a captive planning strategy.