In some cases, groups may benefit from managing and funding the risk 'in house' through a captive solution . A captive structure is generally defined as an insurance company that is wholly owned and controlled by its 'members'. The primary role of the captive is to insure the risks of its owners. 

Captives may insure any number of coverages and different kinds of risks. Using a small captive or a so called Protected Cell Company (PCC) allows a group to tailor the terms to the specific risks of the parent organization, and allows to finance large losses through accrual of profits during favorable underwriting cycles.

Examples of typical coverages by captives are:

• Supply Chain Interruption
• Business Interruption
• Intellectual Property
• Cyber Risk
• Environmental Liability
• Product Liability and Recall
• Warranties
• Errors and Omissions Liability
  
• Directors and Officers Liability
• Political Risk
• Terrorism
• Workers Compensation
• Medical Malpractice

There are many benefits in forming a small captive. However, clients should keep in mind that a captive is both a long-term commitment and a fully functioning insurance company. As such, prior to establishing a captive, prospective owners should consider a feasibility study to assess the opportunities ,the type of captive and the jurisdiction where the captive is to be set up.