If you’re exploring alternative risk transfer options for some of your company’s risk management needs, captive insurance options are a big part of that ecosystem. While many alternative transfer models are about providing different ways of handling risk when insurance is not an efficient option, captives are different. They provide you with a chance to build better insurance, and to do so while containing the costs. How? It’s simple. A captive insurance company is one you own.
Write Your Own Plan
The only limits to your plan with a captive company? Your investment. You need to set the new business up with the funds to handle claims and quote yourself prices that cover its administration and payouts, but if you do, you can literally write your own policy. This is an expensive undertaking for a single parent captive company, which is why many businesses that own captives are well-established. Single parent companies are not the only option, though.
Small businesses can access the savings and robust policy flexibility of a captive insurer by partnering with other businesses and forming a group captive to handle all the group’s needs. This lowers costs, but it does involve some negotiation. Luckily, there are businesses who specialize in finding partner companies and forming group captives that work for all involved. Often, they can even run the day to day operations for you, making it easier than ever to gain control over your insurance costs.