WHY CAPTIVE INSURANCE FOR COMMERCIAL LANDLORDS - PROFITS

Commercial property owners serving third party tenants paying CAM charges can enjoy significant additional profits by using a captive insurance company to insure their windstorm deductible.  The following table shows how much additional profit can be enjoyed based upon the insured value of the properties they own. 

 

 The table is based upon the following assumptions:

 

The percentage of the captive’s premium that can be passed on to the tenants – 85%

 

The marginal income tax rate of the ownership group – 35%

 

The rate of growth of the insured values of the properties – 7.5%

 

The windstorm deductible – 5%

 

Results will vary from property to property.

  

Copyright © 2008 by Biber O'Toole Delano Fowler & Clarkson P.L., St. Petersburg, Florida. All rights reserved.