Micro Captive Insurance

There are different types of captive insurances available in market right now and micro captive insurance is one of the categories. Businesses of small to medium scale are able to secure or cover the risks which are not coverable by conventional insurance, by micro captive insurances. A Micro Captive insurance company is a captive insurance company operating with an annual gross premium up to $2.2 million. In the United States, qualified under Internal Revenue Code 831(b), a Micro Captive will pay tax only on investment income and not on underwriting profit. The underwriting profit can either be returned as a dividend or subject to limitations prescribed by the IRS, remain in the captive as surplus. The Micro Captive must qualify as a bona fide insurance company and serve a business purpose.

Examples of Micro Captive Policies:

  • Professional Liability Gap Coverage
  • Contractual Liability
  • Cyber Liability
  • Environmental Liability
  • Excess Environmental Liability
  • Reimbursement:
    • Employment Practices
    • Employee Dishonesty
    • Patent Infringement/Intellectual
  • Property & Liability:
    • General Liability Gap
    • Property Management Professional
    • Professional Misconduct
    • Product Recall
    • FDA Administrative Actions Liability
    • Product Liability Gap
    • Directors and Officers Liability
    • Punitive Damages
    • Loss of Key Employee
    • Wind Deductibles on Property


The insurance in a Micro Captive is customized coverage designed to expand, complement, and close gaps in existing insurance policies.