Protected Cell Captive InsuranceFor Healthcare and Senior Living Facilities
What is a Protected Cell Captive?
Protected Cell Captives are commonly known as a Segregated Cell. 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 entity for the purpose of segregating assets and liabilities. Different cells are usually made available by the captive owner to insureds who wish to move to a captive, without the startup costs and administration overheads. In return they will pay regular administrations fee to the captive owner. A Protected Cell Captive is a fast, easy way for an organization to move to a Captive environment.
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. The specifics are dependent on the unique requirements of the organization. For healthcare and senior living facilities, protected cell captives might cover professional liability, general liability, large deductible obligations, workers’ compensation, and even specific risks that conventional insurers might not cover.
What Kind of Organizations are Protected Cell Captives Suited to?
Protected Cell Captive Insurance is beneficial for organizations who wish to move into alternative structured insurance, but don’t want to shoulder the set-up costs and wait the six months to a year that a single parent captive takes to set up. They are particularly advantageous for organizations who are large enough to self-insure, but are new to the captive environment. They can join a captive which is already up-and-running by just paying an entry fee. As they have a ‘protective cell,’ they are not exposed to the liabilities of other members in the way that they would be in a group captive. 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. These 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?
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 engage in managing their risks actively. This increased involvement often results in improved risk management practices. The focus transitions from the cost of risk management programs to the savings they can generate, fostering a proactive risk management culture.
Improved Safety Outcomes
By prioritizing risk management, protected cell captives can contribute to better safety outcomes. Healthcare and senior living facilities can implement risk mitigation measures that significantly reduce risks, thereby benefiting the patients and residents they serve. Fewer risks can lead to fewer claims, improving the safety profile of the facility.
Greater Control, Flexibility and Security
Protected Cell Captive Insurance affords 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 domiciled, 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.
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.
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.
Contact Michael Richards now
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:
insurance for allied health care
insurance for hospitals
Hospital Insurance typically covers all or part of the potential liability for hospital services. It includes medical malpractice, accidents involving hospital employees and equipment, care during surgery or any other invasive treatment, after-hours care arrangements by staff who need help with their children and more.
insurance for long term care facilities
Long term care facilities must protect themselves against potential liability arising from incidents within their facility. Westwood can help you negotiate a package tailored to your long term care facility client.
insurance for medical providers
traditional insurance products
Westwood have fostered exceptional relationships with underwriters and we go to great lengths to keep abreast of their latest products, changes in requirements and restrictions, including having weekly calls with the carriers, which you can see here, by joining our insurance insider group.
- Professional Liability Insurance (Medical Malpractice Insurance)
- General Liability Insurance
- Business Owner’s Policy (BOP Insurance)
- Excess and umbrella coverage
- Cyber Liability Insurance
- Telemedicine Malpractice Insurance
- Commercial Property Insurance
- Commercial Auto Insurance
- Directors and Officers Liability (D&O) insurance
- Sexual Abuse & Molestation (SAM) insurance
- Workers’ Compensation Insurance
- RAC Audit Coverage
- Errors & Omissions Insurance
- Employment Practices Liability
- Environmental Liability insurance
- HNO Insurance
- Fully/Partially Funded insurance
- Crime Insurance
Westwood President, Michael Richards has extensive experience in setting up alternative structures for larger clients. Here are some examples:
- Starting a Single Parent Captive (Pure captive)
- Joining a Protected Cell Captive (Segregated Cell)
- Micro Captive Insurance
- Group Captive Insurance
- Risk Retention Group (RRG)
- Special Purpose Vehicle (SPV) Captive
- Stand alone ERP (extended reporting period)
- Loss Portfolio Transfers (LPTs)
If you think your client could be large and stable enough to benefit from starting or participating in a captive or has a special need for another alternative structure, contact Michael Richards now by phone: 855 351 7487.