Search
Schedule your free
Exploratory phone call

Click here to see how we
can be of assistance.

Click Here
Blog
Video Library
Join our newsletter
In The Press
Client Login
Youtube Channel
CONNECT WITH US BY CLICKING THE SOCIAL MEDIA ICONS.
VISIT OUR PODCASTS:
Shah Plan-it Google Podcast Neel's Live
Archives
Categories
Recent Posts
Important IRS Update: Significant Interest Penalty Increase for Tax Underpayments

The Internal Revenue Service (IRS) has recently announced a critical change that could significantly impact taxpayers who underpay their taxes. This update is particularly relevant as we approach the next tax filing season. Previously, the IRS charged a 3% interest penalty on estimated tax underpayments. However, this rate has now been increased to a substantial

Read More

See more
Will Inflation Hurt Stock Returns? Not Necessarily

Investors may wonder whether stock returns will suffer if inflation keeps rising. Here’s some good news: Inflation isn’t necessarily bad news for stocks. A look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns. Since 1993, one-year returns on

Read More

See more
Maximize Your Charitable Impact with These Four Strategies

As the year draws to a close, it’s a perfect opportunity to rethink how you give to charity. This is important for managing how much tax you pay and how much help reaches those in need. Here are four effective strategies: Need Guidance? Reach Out to Us! These strategies are just a starting point. There

Read More

See more

For Hoteliers: Hotel Business Protection Using Captive Insurance

Categories
Category: Business Planning Hotel Owners

For hotel business owners, there are big benefits to setting up a captive insurance company. This can be a valuable way to protect your company and save money at the same time, since captive insurance companies are known for tax flexibility. A captive insurance company is an affiliate of a business that is created to reinsure particular risks of that business. The captive can be formed in the U.S. or in a foreign jurisdiction. Policies can contain all of the basic terms that are included in commercial insurance contracts and premiums are determined by independent actuaries.

For Hoteliers Hotel Business Protection Using Captive Insurance
(Photo Credit: gamasutra.com)

The goal of a captive is to help pick up the risk that has already been held by a business that “self-insured”. This means that the business has some kind of specific need for which it is too expensive or impossible to get typical insurance. In this case, the captive serves a very important role of improving the risk protection capability for the business. Some examples include earthquake coverage, food-borne illness concerns, or cyber theft.

Surplus that is not used to pay out claims can be distributed out to shareholders as dividends. Control over this captive also gives the client investment control over the assets with the captive in certain situations. Captive insurance companies benefit from special tax treatment under the Internal Revenue Code. As a result of all these benefits, business owners for thousands of companies have been able to accumulate a great deal of pre-tax wealth through captive insurance companies. Hotel owners take note: you should consider how a captive insurance company suits your needs and helps you insure specialized risk. To get started, contact us at 732-521-9455 or email us at info@lawesq.net

Risky Business? Manage that Risk: Captive Insurance Companies

Categories
Category: Business Law Business Planning Business Succession Planning Captive Insurance Companies

A captive insurance company is a company created by a business owner to help insure risks of affiliated businesses. When set up appropriately, a captive allows a business to manage risks while allowing the affiliated company to reap benefits, too.

Risky Business Manage that Risk Captive Insurance Companies
(Photo Credit: business2community.com)

A Captive will receive premiums that are then invested as opposed to premiums sent to a traditional unrelated insurer, which are essentially “lost”. Over time, those premiums accumulate. In the event of a risk loss, the premiums are available to be paid for those self-insured losses, thus protecting the business’s bottom line. This crucial benefit is the biggest advantage for business owners.

A Captive can issue casualty or property insurance to protect against a broad array of risks. Where the business owner has the most potential to capitalize on this opportunity is through risk protection for those risks that are typically too expensive to coverage or uninsurable, period. With possible major tax increases coming in the future, the Captive Insurance company remains situated as one of the most effective solutions for business owners. Captive Insurance benefits go beyond tax advantages by providing business owners with opportunities in wealth transfer, estate planning, and asset protection, too.

At Shah and Associates, we work with you individually to determine how a Captive can best suit your business needs. With vast experience in the field, we have helped our clients use Captives to minimize taxes, protect assets, manage risks, and improve cash flow. We understand the peace of mind and confidence that comes from a comprehensive approach to risk management, and that’s why we remain committed to the business community.