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Corporate insurance
A corporate insurance programme is the coordinated set of policies, layers and retentions a company or group uses to transfer its insurable risks. Its structure decides who pays each part of a loss, so the gaps between layers, entities and countries are where claims tend to go wrong.
Part of: Group companies insurance programmes
In short
Most corporate programmes are built in layers. The company keeps the first part of each loss through a deductible or self-insured retention. A primary policy sits above that, and excess policies stack on top to form a tower, usually following the primary wording. Limits may apply per claim, in the aggregate, or both. Groups with overseas operations often combine a master policy with local admitted policies, and some retain risk through a captive. UK premiums usually carry Insurance Premium Tax at 12%. Renewal is a timetabled process that starts months before expiry.
A programme is more than a list of policies. It is the design that decides how much risk the business keeps, how much it transfers, to how many insurers and on what terms. A larger company may run separate structures for property and business interruption, casualty (employers', public and products liability), motor, D&O, professional indemnity and cyber. Each line can be built differently.
This page covers the structural building blocks. For how a parent and its subsidiaries are named under one programme, including acquisitions and intra-group claims, see group companies insurance programmes.
Where a company needs more limit than one insurer will provide, or wants to spread the risk, the limit is split into layers:
Illustrative example. A company needing £50 million of liability cover buys three layers. A single £30 million claim would be paid like this:
| Layer | Limit | Attaches at | Pays on a £30m claim |
|---|---|---|---|
| Retention | £250,000 | £0 | £250,000 (company) |
| Primary | £10m | £250,000 | £10m |
| First excess | £15m | £10.25m | £15m |
| Second excess | £25m | £25.25m | £4.75m |
Friction usually sits between layers: an excess wording that does not follow a primary extension, a different definition of claim, or a layer that will not drop down when the one below has used its aggregate.
Limits and retentions can apply per claim, per occurrence, in the aggregate for the policy period, or a mix of these.
| Term | How it usually works | What to watch |
|---|---|---|
| Each and every claim limit | The full limit is available for each claim | How related claims are aggregated into one |
| Aggregate limit | One limit for all claims in the period | An early large loss reduces cover for later claims |
| Deductible | The insurer handles the claim; the insured bears the first part, sometimes with the insurer paying and recovering it | Whether it applies to defence costs |
| Self-insured retention (SIR) | The insured pays, and often handles, claims within the retention before the policy responds | Claims-handling standards and who controls the defence |
| Aggregate deductible (stop loss) | Caps the total the insured retains across all claims in the period | Expected claim numbers and how retained losses are funded |
A higher retention usually lowers the premium but moves more loss onto the balance sheet, so retentions should match the company's appetite and cash position, not just the price. For a professional indemnity view of the same idea, see excess vs deductible.
A UK group with operations abroad usually chooses, line by line, how far one policy can stretch:
Master policies commonly include difference in conditions and difference in limits clauses, which top up local policies where their terms or limits are narrower, subject to local law. The right mix for each country depends on compulsory insurance rules, premium taxes, regulation and where claims are likely to be paid, so local advice is normally needed.
A captive is an insurer owned by the group it insures. In a programme it usually sits in the retained layer: a fronting insurer issues the policy and the captive reinsures part of the risk, with the commercial market above. It tends to suit groups with predictable losses and the capital to retain them. See captive insurance explained and self-insurance vs captive vs conventional.
Insurance Premium Tax (IPT) is charged on most general insurance premiums for UK risks. The standard rate is 12%, in force since 1 June 2017, and a higher rate of 20% applies to travel insurance and some insurance sold with appliances or vehicles. HMRC's Notice IPT1 explains that the insurer accounts for the tax, that it is charged on the premium excluding tax, and that risks located outside the UK are exempt. For IPT, the Isle of Man and the Channel Islands are outside the UK. Where a contract covers UK and non-UK risks, the premium must be apportioned. Other countries levy their own premium taxes, which is one reason premium allocation across a group matters. See also IPT in brief.
Timings vary with size and market conditions. An illustrative timetable for a corporate programme:
Where lines renew on different dates, some companies align them so the whole programme, and the gaps between lines, can be reviewed together. Apex's commercial insurance renewal calendar and renewal checklist break this down further.
Primary insurance is the first layer above the company's own retention and usually sets the wording and handles claims. Excess insurance sits above it and pays only once the primary limit is exhausted. Excess policies commonly follow the primary terms, subject to their own conditions.
A self-insured retention is the amount a company pays itself on each claim, or in total, before its policy responds. Unlike a typical deductible, the company often handles and funds claims within the retention directly. The policy terms set how the retention works and what reporting is required.
Admitted insurance is written by an insurer authorised in the country where the risk sits. Non-admitted insurance is written from outside that country by an insurer not licensed there. Some countries restrict non-admitted cover, which is why multinational groups often combine a master policy with local admitted policies.
According to GOV.UK, the standard rate of Insurance Premium Tax is 12%, in force since 1 June 2017. A higher rate of 20% applies to travel insurance and certain insurance sold with appliances or vehicles. Risks located outside the UK are exempt.
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Get a quote Start a commercial enquiryApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
