Things To Know about Captive Insurance

Insurance is a tricky business. Sometimes the coverage a company needs is too expensive. Other time, the insurer simply doesn't offer the type of coverage needed. There is a solution to this issue, captive insurance services. This kind of insurance isn't a household name, but it is effective. 

Captive insurance is sort of like a mutual insurance fund. Multiple entities will combine their resources to insure themselves outside of the traditional coverage market. Then, as new groups enter, they use their premiums to help fund it. Companies can design the exact type of coverage they need. The only caveat is that they are risking their assets to do so. There are arguments for and against captive insurance companies. The following are some of the benefits of getting this type of coverage. 

Another asset to retain employees - A high-performing employee at a company can be offered a stake in the company's captive. That is a bonus to the employee. It is also much better for the company than giving them a stake in the actual business itself. Captives can see remarkable growth. This type of bonus is sometimes very lucrative making it an effective means of retaining high-value employees. 

Custom Policies - With captive insurance, a company can design a policy that is perfectly tailored to their needs. They pay only for what they want and nothing else. That is something that is just not possible with traditional insurance companies. Efficiency saves money, and this is the most efficient way to cover your business. The money that is saved by protecting assets in this way can be dedicated to asset protection in other areas of their holdings. The increased efficiency helps reduce risk. 

It's Cheaper - Lower cost is of course the most important reason to use a captive insurance company. These policies are tailored to prevent any money from being wasted. Companies were having to overbuy and get the coverage they didn't need before captive was invented. 

Captive insurance is an ideal way for any business to get the exact asset protection coverage they want. It lowers cost and is a great way to grow the holdings and value of your company's financial portfolio. There are two different kinds of this insurance, pure captives, and sponsored captives. Pures are owned solely by the members. Sponsored captives are controlled by a third party.
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