Is your business looking to improve its insurance situation? Often, a business does not assess its insurance needs until it is facing a situation in which it needs insurance. While many traditional insurance companies serve their client well, many times a business may be better served by pooling its resources with other companies by forming a captive insurance company. Captive insurance companies are often a great option for businesses that are looking to avoid some of the risks associated with traditional insurance companies. Additionally, captive insurance provides several benefits that standard insurance companies cannot provide.
You Have Fellow Members
When a business is a client of a major insurance company, often it can feel isolated. While insurance companies usually have many clients, the clients often do not have regular contact with each other and usually have very little pull in the terms of their insurance contracts. In a captive insurance company, the members often appoint their own representatives to sit on the Board of Directors of the captive insurance company, who can work together to benefit all the members of the company. In addition to having fellow members to help direct the company, many firms offer captive insurance consulting to help companies form and run the captive insurance company.
Avoid Premium Fluctuations
Large insurance companies often charge premiums that may not reflect the risk the insured entity presents. Many times this is due to the nature of the insurance marketplace. Premiums can often times fluctuate just like any other product. This fluctuation can often be due to a variety of factors that are outside of the insured entity’s control. Unlike traditional insurance premiums, captive insurance premiums often stay more consistent over time. In addition to avoiding premium fluctuations, a captive insurance company will many times offer members the chance to earn a return on their premiums by investing premiums paid into the company. With these potential benefits, businesses may find captive insurance is the answer they have been looking for.