Residential care operators across Texas—especially IDD homes, assisted living centers, behavioral health providers, and multi-location care communities—are experiencing one of the hardest insurance markets in decades.
Premiums are increasing. Underwriting is tightening. Carriers are pulling out of certain coverage lines. Abuse and molestation claims are rising nationwide. Auto liability severity continues to climb. Cyber breaches are targeting small and mid-sized healthcare providers at record rates.
Yet most care operators are still using traditional, fully insured programs that:
- Inflate in price every year
- Penalize operators for industry-wide losses
- Offer little transparency
- Fail to reward strong safety and compliance practices
- Provide no opportunity for long-term premium stability
This is why more residential care operators across Dallas–Fort Worth, Rockwall, Austin, San Antonio, and greater Texas are shifting into Group Captive Insurance Programs — solutions built for operators who want control, transparency, cost stability, and partnership-level risk management.
This article explains why captives are becoming the preferred option for high-performing Texas care organizations — and how EIS Texas helps operators determine if a captive is the right next step.
Industry Overview: Why Traditional Insurance Is Breaking Down for Texas Care Operators
Residential care facilities—particularly IDD homes regulated by Texas Health & Human Services (HHSC)—face risk exposures that most commercial carriers struggle to underwrite efficiently.
The pressure points include:
1. Staffing challenges
High turnover increases training gaps, onboarding variance, and human error exposure.
2. Increased regulatory oversight
Texas licensing and documentation standards continue to tighten.
3. Abuse & Molestation liability trends
Claims frequency and severity have risen nationwide, especially involving residents with higher care needs.
4. Non-Emergency Medical Transport (NEMT) exposures
Care facilities that transport residents face higher auto severity than standard commercial fleets.
5. Professional Liability concerns
Care plans, medication oversight, daily living support, and behavioral intervention all introduce professional-grade liability exposure.
6. Cyber threats
Residential care facilities store sensitive resident data: behavioral logs, medical information, billing, guardianship details, vulnerabilities, and medication lists.
7. Wage and hour, employment-related disputes
Increasingly common in care environments with 24/7 staffing.
These factors make large, national insurance carriers view Texas residential care as higher risk, even when individual facilities operate with exceptional quality.
As a result:
- Premiums go up
- Coverage is restricted
- Claims handling slows
- Underwriting scrutiny increases
- Carriers exit or reduce appetite
Strong operators feel the pain despite doing everything right.
This is why captives are growing.
What Is a Group Captive, and Why Does It Fit Residential Care?
A Group Captive is an insurance company owned by its members—high-performing businesses that want to control insurance costs and benefit from their own superior performance.
In a captive program:
- Members share risks with similar organizations
- Premium is based on your loss history, not industry averages
- Strong operators get rewarded with lower long-term costs
- Underwriting is transparent
- Safety and risk management are strategic priorities
- Surplus and underwriting profits can be returned to members
Captives are NOT traditional insurance.
They are long-term risk financing solutions for organizations that:
- Are committed to safety
- Maintain strong compliance records
- Want cost stability
- Want to invest in partnership-level risk management
- Want to break free from unpredictable market cycles
Residential care operators—especially those with multiple homes or large staff counts—fit this model exceptionally well.
Why Residential Care Operators in Texas Are Moving to Group Captives
Below are the core drivers pushing care operators toward captives.
1. Premiums Are Increasing Even When Losses Are Not
Many care operators report:
- 10–25% annual premium increases
- No serious claims
- No operational changes
- No justification from carriers
This is because traditional insurance pools treat operators as a group.
If the industry loses money, everyone pays.
Captives end that cycle.
Members are:
- Individually underwritten
- Rewarded for safer operations
- Protected from market volatility
- Not forced to subsidize poor performers
This benefit alone drives many operators to explore captives.
Learn More About EIS-Texas Captive Options
Group Captive Programs in Texas
2. Residential Care Is Relationship-Driven — Captives Support That Model
Operators who invest in:
- Quality staffing
- Safety culture
- Strong documentation
- Medication accuracy
- Behavioral intervention training
- Family communication
- Incident reporting
outperform their peers.
Traditional carriers rarely recognize that work.
Captives do.
In a captive, members who share similar values and operational cultures collaborate on risk reduction, best practices, and long-term strategy.
This model strongly aligns with EIS Texas and the mission-driven nature of residential care.
3. Abuse, Neglect, and Professional Liability Claims Require Stronger Risk Partnership
Some of the most sensitive exposures in Texas care facilities include:
- Abuse allegations
- Neglect claims
- Medication errors
- Behavioral intervention incidents
- Elopement
- Falls
- Staff-resident interaction issues
Traditional carriers often defend these claims slowly, inconsistently, or without appropriate industry expertise.
Captive programs offer:
- Faster claims handling
- Access to specialized defense counsel
- Clearer communication
- Data-driven risk improvement strategies
For operators responsible for vulnerable populations, this support is transformative.
4. Auto Liability Severity Has Increased Dramatically
Residential care fleets—often used for:
- Appointment transportation
- Day programs
- Employment support
- Community outings
face increased exposure due to:
- Higher medical costs
- Distracted driving
- Larger settlements
- Complex liability disputes
Captives can integrate:
- Driver qualification standards
- Telematics
- Claim reduction strategies
- Vehicle maintenance protocols
Operators that adopt these systems see lower long-term auto costs.
5. Cyber Liability Is Becoming Non-Optional
Residential care facilities now rely heavily on:
- EHR platforms
- Medication administration records
- Incident reporting systems
- HR and scheduling tools
- Billing software
When a breach occurs, operators face:
- HHSC reporting requirements
- Guardian notifications
- Legal review
- Data restoration
- Potential civil penalties
- Reputational damage
Captives help members strengthen:
- Password protocols
- VPN and secure access
- Third-party vendor controls
- Staff training
- Incident response plans
This reduces both frequency and severity of cyber claims.
6. Captives Reward Operator Effort — Traditional Insurance Does Not
Captive members can receive:
- Underwriting profit distribution
- Dividends
- Reduced long-term premiums
- Customized risk management support
Traditional insurance carriers:
- Keep all underwriting profit
- Raise rates even in good years
- Penalize industries collectively
Captives deliver true partnership.
What a Group Captive Looks Like for a Residential Care Operator in Texas
Residential care operators in North Texas, Austin, Houston, and San Antonio typically place the following lines into a captive:
- Workers’ Compensation
- General Liability
- Auto Liability
- Property (depending on structure)
High-severity coverages—such as Abuse & Molestation and Professional Liability—can also be integrated or layered, depending on the captive design.
Members participate in:
- Loss control
- Data analytics
- Operational audits
- Peer benchmarking
- Training programs
This is where operators see the greatest return:
Better performance = lower long-term cost.
Is a Group Captive Right for Every Residential Care Operator?
No.
Captives require commitment, operational maturity, and financial stability.
A captive is a good fit for operators who:
- Have 50+ employees, or multiple locations
- Maintain stable leadership teams
- Use structured documentation systems
- Invest consistently in staff training
- Have modest-to-strong loss history
- Want long-term cost control
A captive may NOT be right for operators who:
- Are experiencing frequent claims
- Have high turnover with poor training systems
- Lack consistent documentation
- Cannot maintain minimum capital requirements
EIS Texas helps operators determine readiness through a pre-captive evaluation.
Insurance Is Just Part Of The Process, Find Out More About How EIS-Texas Helps Businesses Win
Risk Management Services
The EIS Texas Captive Evaluation Process
We guide residential care operators through a structured evaluation to determine whether a captive is the right fit.
1. Loss Analysis & Benchmarking
We measure your performance against industry standards—identifying whether your losses are better, worse, or consistent with captive entry requirements.
2. Operational Review
We examine:
- Documentation quality
- Medication procedures
- Training systems
- Staffing model
- Incident reporting
- Fleet practices
3. Financial Assessment
We determine whether your organization meets minimum capital and premium thresholds.
4. Captive Modeling & Projection
We show:
- What your premiums could look like inside a captive
- How losses impact dividends
- Expected long-term financial outcomes
- Best- and worst-case scenarios
5. Education & Leadership Alignment
We teach operators—board, executive team, and administrators—how captives actually function and support mission-driven care.
6. Enrollment Support & Long-Term Risk Partnership
EIS Texas remains involved with:
- Claims coordination
- Safety development
- Training support
- Annual reviews
- Regulatory alignment
This is why operators choose EIS Texas:
You don’t join a captive alone. You join with a partner.
We Invite You To Try Something, Different.
Residential care is a calling. Your insurance partner should respect that responsibility and support the systems that protect the people you serve.
Group captives offer a path to stability, transparency, and partnership that traditional insurance simply cannot provide.
At EIS Texas, we help residential care leaders evaluate whether a captive is the next strategic step in their growth and mission.
Link:
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FAQs
What is a group captive for residential care facilities?
A group captive is a member-owned insurance company where high-performing organizations share risk and benefit from their own superior performance instead of subsidizing industry losses.
Why are Texas residential care operators moving into captives?
Because premiums are rising, underwriting is tightening, and traditional carriers are withdrawing from certain coverages. Captives offer control, stability, and financial return.
Do captives help with abuse and molestation claims?
Yes. Captives often provide specialized claims handling, data analytics, and improved defense strategies tailored to sensitive care environments.
Can auto liability be included in a captive?
Yes. Many Texas care operators include Auto Liability due to high claim severity involving resident transportation.
Is a captive only for large care organizations?
No. Operators with as few as 50 employees or multiple homes may qualify, depending on their loss profile and financial stability.
What makes EIS Texas different in the captive space?
We pair captive strategy with deep residential care expertise, regulatory knowledge, operational analysis, and long-term partnership—not just policy placement.
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