For construction companies, reviewing insurance only once a year leaves key risks exposed and drives up costs for coverage that no longer fits their business. That’s why Treacy Duerfeldt, founder of Construction Insurance Risk Education (CIRE), advocates for better insurance literacy in the sector. “The commercial insurance industry isn’t doing such a good job or it’s unavailable,” Duerfeldt says of many specialized risks.
Rather than accepting those limitations, he believes companies should understand where traditional insurance falls short and build strategies that better align with their operations. For organizations generating more than $50 million in annual revenue, captive insurance has become one of the most effective ways to achieve that goal, provided it is designed with education, compliance, and customization at its core.
Turning Insurance Into a Strategic Business Tool
Captive insurance remains a niche concept despite its growing relevance for larger businesses. At its simplest, a captive is an insurance company established to insure the risks of its parent organization. Unlike traditional commercial policies, captives allow businesses to create more tailored solutions for risks that the broader market either excludes or prices inefficiently.
For Duerfeldt, however, the value extends well beyond the insurance structure itself. The real opportunity lies in helping executives understand risk well enough to make informed decisions rather than relying entirely on standard market offerings. His career has been driven by solving complex insurance challenges. After first being introduced to captive insurance in 2002 during one of the construction industry’s hardest insurance markets, he became fascinated by its potential to address problems that conventional carriers could not. “It became very interesting to me to listen to some of these larger clients… and keep asking questions,” he says. “If this isn’t available in the commercial insurance area, why don’t we just create it?”
Customization Begins With Listening
Many captive programs rely on standardized coverage structures that resemble choosing options from a menu. However, “one size fits all doesn’t work,” he says. “I don’t feel everybody has the same appetite.” Instead, every engagement begins by understanding how a business operates, where its financial vulnerabilities exist, and which exposures create the greatest uncertainty. That process often uncovers risks that traditional insurers have never attempted to cover.
Among the custom solutions his team has designed is mortgage interest rate impact protection for residential builders. As higher interest rates reduced housing demand, builders increasingly faced canceled contracts and expensive buyer incentives. Rather than absorbing those losses entirely, Duerfeldt helped structure coverage that provides financial support when those market conditions materialize.
Another example is lumber price guarantee coverage, designed to help construction firms manage volatility in material costs using actuarial models built around available market data. These solutions reflect a broader philosophy. Insurance should evolve alongside business risk instead of forcing companies to fit within predefined products.
Compliance and Control Matter as Much as Innovation
Captive insurance also requires disciplined governance and regulatory compliance. Duerfeldt favors structures designed for long-term sustainability over short-term tax advantages, noting that some commonly used captive arrangements have attracted increasing scrutiny from regulators. He also cautions businesses against entering pooling arrangements that reduce their ability to control outcomes. “My clients have found that other folks involved in the reinsurance are making claims and they aren’t,” he says. “They end up saying, ‘Hold it. I’m not having claims, but I still am paying in beyond what was promised because other people are having claims.'”
For Duerfeldt, maintaining control means designing captive programs around each organization’s unique objectives, rather than prioritizing convenience. “I think the problems I brought up are very important to those people who are in existing captives, and even more important to people who are looking at captives and simply are going to move toward convenience as opposed to control.”
Education Is the Foundation of Better Risk Decisions
Every captive strategy ultimately depends on informed leadership. That is why education sits at the center of Duerfeldt’s work through CIRE. Business owners are often hesitant when introduced to the technical side of insurance. Duerfeldt acknowledges that reaction but sees learning as a gradual process rather than an overwhelming commitment.
“Over time, I’m afraid it’s going to happen because you’ll have to understand the ins and outs and the advantages of insurance companies,” he tells clients. “You don’t have to hurry up and become an expert, but you do have to be open to some gradual learning.”
That education includes understanding accounting differences, insurance regulation, policy design, and opportunities to optimize both premiums and coverage. As executives become more familiar with these concepts, insurance shifts from being viewed as a fixed cost to becoming a strategic financial tool.
For construction firms facing increasingly complex risks, that perspective may prove to be the most valuable asset of all. The ability to understand risk, question conventional approaches, and design solutions around business realities creates stronger financial resilience, while positioning insurance as an active contributor to long-term growth rather than a passive annual expense.
Follow Treacy Duerfeldt on LinkedIn or visit his website for more insights on captive insurance and risk management strategies.
