What is the difference between captive and excess insurance?

Captive and excess insurance are two types of insurance coverage, each with their own unique purpose and advantages. Captive insurance is a type of insurance coverage that is offered and/or administered by an insurance company that is owned or partly owned by the insured party. This means that the insured party shares in the risk and costs of the insurance policy, and the policy may be tailored to their specific needs. Excess insurance, on the other hand, is a type of coverage that provides additional coverage beyond the limits of a primary policy. This type of policy is used to protect against losses that exceed the coverage limits of the primary policy, and is often used by businesses, associations, or individuals with higher-risk operations. In South Carolina, the state’s insurance laws require that all insurance policies must be approved by the state’s Department of Insurance. This ensures that policies meet certain minimum standards, such as providing adequate coverage for risks and losses. It also means that any captive and excess insurance policies that are offered in South Carolina must be approved by the Department of Insurance. In conclusion, the primary difference between captive and excess insurance is that captive insurance is offered and/or administered by an insurance company owned or partly owned by the insured party, while excess insurance provides additional coverage beyond the limits of the primary policy. Both types of insurance are regulated by the South Carolina Department of Insurance to ensure that adequate coverage is provided and risks are managed appropriately.

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What is the difference between captive and excess insurance?

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