Scott Herckis is an established Connecticut financial consultant who works with business owners in fine-tuning operations and ensuring accountability and responsiveness to changing conditions. Also offering tax preparation services, Scott Herckis coordinates tax planning strategies to meet clients’ unique situations.

One challenge encountered by businesses that have substantial risk is securing marketplace insurance coverage options. Risk factors range from threats of litigation or regulatory action to the potential costs associated with product refunds.

One solution involves forming a captive 831(b) insurance company that covers risk through customized insurance policies. Such a company is structured as a subsidiary and has a sole function of financing retained losses through a formal structure defined by state and federal insurance law. Captives are designed to comprehensively comply with risk shifting and distribution laws, as well as mandates covering claims adjudication and insurance pricing.

With such challenges met, captives effectively complement a company’s existing commercial insurable coverage and ensure that a full range of contingencies are prepared for. When properly structured, the insurance premium payments paid by the corporation to its captive subsidiary should also be tax deductible.