Captive Insurance for Cyberliability: Smart Solution or Risky Shortcut?

The Expert Podcast

📌 Episode Show Notes / Description:

• Explore how captive insurance is becoming a go-to strategy for covering hard-to-place risks like cyberliability.
• Understand what captive insurance really is and how it functions as a licensed, regulated entity separate from the parent company.
• Discover why more companies are forming captives due to the rising costs and tightening terms of cyber insurance policies.
• Learn how self-insurance + captive coverage works as a stop-loss strategy to manage large or catastrophic cyber losses.
• Discuss why traditional cyber insurance is struggling—with policy non-renewals, higher premiums, and stricter underwriting guidelines.
• Examine how companies are required to implement strong cybersecurity protocols like ransomware prevention and two-factor authentication just to qualify for cyber insurance.
• See why captives can be a long-term solution to maintain coverage when traditional markets are unstable or unreliable.
• Get insights into combining a captive with excess and surplus lines, Lloyd’s coverage, or mezzanine layers to enhance protection.
• Evaluate the legal and financial structure of a captive—why arm’s length operations and full disclosures matter.
• Understand how co-ops or group captives with companies in similar industries might provide tailored cyber coverage.
• Learn why captive strategies are gaining popularity even among companies that never considered them before.
• Be cautioned: forming a captive isn’t a shortcut to skip compliance—best practices still apply and should even be exceeded.
• Hear why this path may make sense for firms with hundreds of millions or billions in revenue, but not necessarily for smaller businesses.
• Final reminder: Always consult with legal and insurance experts before setting up a captive or adjusting your coverage strategy.