831 (b)

    What Is an 831(b) Plan?

    An 831(b) Plan is a strategic risk management solution that enables successful business owners and real estate investors to proactively insure against risks that traditional policies often overlook. By forming a captive insurance company under Section 831(b) of the IRS Code, you gain control over your risk mitigation strategy—while also benefiting from unique tax efficiencies.

    How It Works

    Rather than paying premiums to a third-party insurer with limited customization, your operating business pays premiums to a captive insurance company that you own and control. This provides tailored insurance coverage for underinsured or excluded risks—such as supply chain interruptions, tenant defaults, regulatory changes, cyber incidents, or reputational damage.

    As claims are made, the captive pays them out—just like any insurer. But if claims are minimal, reserves accumulate and can become a powerful capital resource. 

    Why It Matters for Real Estate Investors & Business Owners

    • Risk Reduction: Gain better control over insurable risks that are specific to your operations and assets.
    • Custom Coverage: Fill the gaps left by traditional insurance.
    • Operational Resilience: Keep your business moving when unexpected disruptions arise.
    • Tax Efficiency (Secondary Benefit): Premiums are deductible to the operating company.
    • Asset Protection: Captive reserves may be shielded from creditors or litigation.

    It’s Not Complicated—But It Must Be Done Right

    Setting up a captive under 831(b) isn’t DIY—it’s a regulated insurance company requiring IRS compliance, proper licensing, actuarial justification, and strong administrative practices. We’ve partnered with a top-tier third-party administrator to ensure your plan is:

    • Supported by actuarial risk analysis and underwriting standards
    • Properly documented and audited
    • Professionally managed and strategically structured

    The Bottom Line

    An 831(b) Plan is first and foremost a risk management tool. When structured and administered correctly, it can strengthen your business’s resilience, reduce your reliance on conventional insurance, and build long-term financial security.

    Want to know if an 831(b) Plan makes sense for your business?

    Let’s talk—contact us here to see how this risk-focused strategy can support your goals.