Innovations in recent years have made captive insurance as accessible to small organizations as to larger ones. Here's a look at the main types of captive insurance entities:

• Single Parent Captive – Typically formed by larger companies, a single parent captive insures the risk of a company and its subsidiaries.
• Group Captive – As its name implies, a group captive insures the common risks of a group of similar companies, creating pricing power and cost efficiencies that may not be possible if each company were to go it alone.
• Association Captive – Similar to a group captive, this type of entity is formed to benefit the members of like-minded organizations, such as service or trade associations.
• Agency Captive – This type of captive is usually created by an insurance agency to effectively reinsure insurance the agency sells.  This can result in cost benefits for the agency when insuring high-quality risks.
• Rent-a-Captive – This is a facility that allows smaller individual organizations to finance risk through the entity, but without the capital requirements of other types of captives.  Individual organizations in a rent-a-captive are shielded from liabilities incurred by others within the captive. A rent-a-captive is also known as a segregated cell company or protected cell company.