What is the difference between captive and excess insurance?

Captive and excess insurance are two types of insurance coverage that companies can use. Captive insurance is an insurance company owned by a parent company. The captive company operates like a regular insurance company in that it collects premiums and pays claims, but the company is established to insure only the parent company’s risks. Excess insurance is additional coverage that is purchased to supplement existing insurance. Excess coverage is generally purchased when companies feel that their primary insurance is not sufficient to cover their risks. In Ohio, both captive and excess insurance companies must comply with the same insurance regulations. Insurance companies must be licensed and registered with the state’s Department of Insurance, and they must comply with the state’s insurance laws and regulations. Insurance companies must also provide financial records and other information to the department for review. The primary difference between captive and excess insurance is that captive insurance is owned by a parent company, while excess insurance is purchased to supplement other insurance. Both types of insurance are subject to the same regulations in Ohio, but captive companies may also have to comply with the state’s regulations regarding corporate governance and operations.

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What is the difference between captive and excess insurance?

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