Captive Insurance: Putting More Profit on the Table for Restaurants – You Gotta Eat!

May 14, 2024

IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities.  Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses.   The following blog article has been provided by Brian George. Mr. George, is a wealth advisor specializing in among other things captive insurance companies and charitable contributions in coordination with business and real estate sales working for

Captive Insurance: Putting More Profit on the Table for Restaurants – You Gotta Eat!

Running a restaurant business is a challenging endeavor that requires juggling numerous responsibilities, managing risks, and maximizing profits. In such a dynamic industry, safeguarding against potential financial setbacks is crucial. This is where captive insurance comes into play, offering a unique opportunity for restaurants to enhance their risk management strategies while adding more profit to the table. So, dear restaurateurs, remember this: “You gotta eat,” and with captive insurance, you can ensure your business thrives.


Captive insurance refers to a self-insurance model in which businesses create their own insurance companies to cover specific risks. Rather than relying solely on traditional insurance providers, restaurants can establish their captive insurance companies, tailored precisely to their unique needs.


  1. Customized Coverage: One of the most significant advantages of captive insurance is the ability to design customized coverage plans. Traditional insurance providers often offer standardized policies that may not fully address the specific risks faced by restaurants. With captive insurance, restaurant owners can create policies that align perfectly with their operations, addressing potential risks such as food-borne illnesses, liquor liability, property damage, and employee claims.
  2. Enhanced Risk Management: Captive insurance allows restaurants to take a proactive approach to risk management. By closely examining their operations, identifying potential vulnerabilities, and developing targeted risk mitigation strategies, restaurateurs can significantly reduce the likelihood and impact of unforeseen events. This proactive risk management approach can lead to lower claims and ultimately result in reduced insurance costs over time.
  3. Financial Control and Profit Potential: Traditional insurance premiums often represent a significant expense for restaurant owners. By establishing a captive insurance company, restaurant businesses can retain the underwriting profit that would typically go to an external insurer. This means that the money previously spent on insurance premiums can now be retained within the business, potentially resulting in substantial savings. These retained profits can be reinvested in the restaurant’s growth, improving facilities, enhancing customer experience, or expanding the business.
  4. Long-Term Stability: The restaurant industry is known for its volatility, making long-term financial stability a priority. Captive insurance provides an opportunity for restaurants to create stable insurance arrangements that remain consistent even during market fluctuations. The captive insurance company can be strategically structured to accumulate surplus funds, ensuring the availability of resources to cover future losses and reducing dependence on external insurers.
  5. Flexibility and Innovation: Captive insurance fosters an environment of flexibility and innovation. Restaurant owners can adapt coverage options as their business evolves and industry trends change. This adaptability allows them to respond to emerging risks promptly and create tailored solutions that provide the most significant protection for their unique needs.

As a restaurant owner, you understand the significance of managing risks effectively while maximizing profits. By embracing the concept of captive insurance, you can capitalize on the opportunity to enhance your risk management strategies, design custom coverage plans, and retain underwriting profits that would otherwise go to external insurers. Captive insurance puts more profit on the table, providing the financial stability and flexibility needed to thrive in the ever-competitive restaurant industry. So, remember the motto: “You gotta eat!” and ensure your restaurant’s success by leveraging the benefits of captive insurance.

If you have questions relating to captive insurance companies, the content of this article, or issues related to Charitable Planning, Brian George would welcome the opportunity to talk with you.  Mr. George can be reached at (360) 340-0601 or

Securities offered through AAG Capital, Inc., member FINRA/SIPC. Investment Advisory Services are offered through Accurate Wealth Management, LLC, an SEC registered investment adviser. Registration does not imply any level of skill or training. Insurance products and services are offered and sold through individually licensed and appointed agents in all appropriate jurisdictions.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.