A medical team consider the benefits of protected cell captive insuranceprotected cell captive insurance

for healthcare and senior living facilities

When traditional malpractice insurance is difficult to obtain, or a facility is large enough to be able to benefit from the cost savings and flexibility provided by risk financing, a protected cell captive is a great way to ease into the captive environment.

What is a protected cell captive?

Protected Cell Captives are in effect a protected cell company, also known as segregated cells. They are a specific form of captive insurance where a single legal entity, known as a ‘core’, is divided into individual ‘cells’. Each cell operates as a separate legal entity for the purpose of keeping assets and liabilities separate from other cells. Different cells are usually made available by the captive owner to organizations who wish to move to a captive, without the startup costs and administration overheads that you would normally incur when setting up a captive. In return, insureds pay regular administrations fee to the captive owner.

A Protected Cell Captive is a fast and easy way for an organization to move to a Captive environment for their insurance.

Find out more about protective cell captives

What Specific Insurance are Protected Cell Captives set up to Cover?

Protected Cell Captive Insurance can be established to cover a wide range of risks. This of course, depends on the unique requirements of your organization.

In the instance of healthcare and senior living facilities, protected cell captives can be set up to cover professional liability, general liability, large deductible obligations, workers’ compensation, and even other  specific risks that conventional insurers may not cover.

This flexibility in defining the coverage that best suits your organization is one of the benefits of  a protected cell captive.

What Kind of Organizations are Protected Cell Captives Suited to?

Protected Cell Captive Insurance is beneficial for and healthcare or senior living organizations who wishes to move to alternative structured insurance, but don’t want to shoulder the set-up costs and wait up to a year for it to be finalized.

They are particularly advantageous for organizations who are large enough to self-insure, but are new to the captive environment. Instead of going to the trouble of setting an entity up, you can join a captive which is already up-and-running by just paying an entry fee.

Because they have a ‘protective cell,’ structure, you are not exposed to the liabilities of other members in the way that you would be in a group captive arrangement.

By joining a Protected Cell Captive, an organization can get access to accounting and reporting functions and a captive manager who is responsible for engaging with the state regulators. This is why segregated cell captives are often used as a stepping stone to a stand-alone, single parent captive.

What are the Benefits of Protected Cell Captives?

  • Cost Efficiency

    • A protected cell captive can provide substantial cost savings. By sharing operational costs among the cells, it can be cheaper to operate than traditional captives. Any unused premiums and investment income can be returned to the cell owners.
    • For an organization that is new to the Captive environment, Protected Cell Captives offer a faster way to move to a captive without the startup costs of a Single Parent Captive.
  • Enhanced Risk Management

    • Protected cell captive insurance encourages organizations to actively manage their risks. This increased involvement by management often results in improved risk management practices.
    • Their focus usually moves from “How much do risk management programs cost?” to “what savings can we generate from risk management programs?” This fosters a culture of proactive risk management.
  • Improved Safety Outcomes

    • By focusing organizations on risk management priority, protected cell captives can contribute to better safety outcomes.
    • When Healthcare and senior living facilities implement risk mitigation measures that significantly reduce risks, the patients and residents they serve benefit.
    • Fewer risks can lead to fewer claims, improving the safety profile of the facility.
  • Greater Control, Flexibility and Security

    • Protected Cell Captive Insurance give organizations more control and flexibility over their insurance programs.
    • Coverage can be customized to meet specific needs, and changes can be made quickly to adapt to shifting risk landscapes.
    • The asset segregation provided by the cell structure offers enhanced security.

How Much Does a Protected Cell Captive Cost to Join?

The cost to join a Protected Cell Captive can vary greatly depending on several factors, including the nature and magnitude of the risks to be insured, the size of the cell, the jurisdiction in which the captive is registered, and the operating costs of the captive.

However, generally, joining a Protected Cell Captive is more cost-effective than starting a traditional captive insurance company. This is because the costs of management, administration, and regulatory compliance are spread across all the cells in the captive, reducing the burden on any single cell.

Typically, joining a Protected Cell Captive involves an initial capital investment joining fee, that can range from tens of thousands to hundreds of thousands of dollars. There will also be ongoing costs for management and administration, insurance brokerage, actuarial services, audit and legal services, and regulatory fees.

A protected cell captive demonstrated visually

A protected cell captive essentially gives you the benefits of being part of a larger group captive, without the risks of being exposed to the recklessness of any other member. We recommend this type of structure for any organization that is new to alternative structures.

How Do We Get Started?

Michael Richards of Westwood Insurance Group has extensive experience with Protected Cell Captives. He will be able to suggest a segregated cell captive that best suits your organization and help you with the process of joining. His expertise will guide you through each step of the process and ensure the successful operation of the captive.

why medical professionals love to work with us

“Westwood Insurance Group, with Dale and Liz are a pleasure to work with in helping solve for my insured’s insurance needs. Very responsive and eager to help! They are competent and trusted!” – Greg Cullom

“I have worked with Michael and the team for the past two years and found them to be ethical, competent, attentive and to deeply value their relationships with both agents and underwriters. It is always a pleasure to deal with them” –
Michael Barker

“Laura has been a great contact for us over at the Westwood Insurance Group. She is extremely communicative and responsive. Their quick turnaround on last minute items is appreciated as well.” – Hayley Shryock

Contact Michael Richards now

Michael Richards, President, Westwood Insurance Group

Michael specializes in insurance for this particular group. You can call him on the number below or fill out the form and he will get your message directly: