Unfortunately, many don’t fully consider how to protect themselves in the event that their content is demonetized, they get suspended or banned from a digital platform, or their reputation is ruined — deserved or not.

One risk mitigation tool that can serve as a lifeline is an 831(b) captive, also known as microcaptive insurance. However, due to an overreaching enforcement campaign from the IRS, this is not nearly as common as it should be.

A microcaptive offers business owners, including internet influencers, the opportunity to set aside funds and protect themselves from unique or unforeseen risks.

Digital content creation is still a relatively new industry, but influencers are not immune from the same insurance needs as other businesses. For example, most content creators could likely benefit from having coverage for property loss; business interruption; cyber, media and general liability; and more.

Unfortunately, these plans can be prohibitively expensive, especially for niche policies. Simultaneously, many insurance providers are pulling out of certain markets and reducing their policy options, making some coverages difficult to secure at all.

A microcaptive can bridge this coverage gap and potentially offer lower premium costs while giving the policy owner more autonomy since they control the plan directly.

Sadly, many small business owners have legitimate concerns about owning a microcaptive. As I said, the IRS has taken an extremely negative view of microcaptive insurance, especially in recent years.

In particular, the agency has trapped hundreds of small businesses that use microcaptive insurance in legal limbo — placing them under audit but refusing to actually take their case to court. Current or potential microcaptive owners are worried it could happen to them too.

Earlier this year, the IRS also published draft regulations that would severely restrict microcaptives and the small businesses that use them. Many might even be forced to shut their policy down.

Ultimately, this issue is very straightforward. Microcaptives are real, small insurance companies, owned and operated by parent companies, for the purpose of insuring the parent against a particular risk. However, due to a few bad actors, the IRS is pursuing an agenda that will likely shut down almost the entire industry.

I hope members of the House Ways and Means Committee, including Rep. Blake Moore here in Utah, will take this issue seriously. Insurance markets nationwide are in serious trouble and the economy is uncertain. The last thing we should be doing at a time like this is discarding one of the best ways for businesses to protect themselves from unforeseen risks.

Roger Roundy is the owner and CEO of The Alivint Group LLC and CEO of Strategic Associates LLC. He has extensive experience consulting for business owners and high-income individuals, with a background in business risk management.