Chances are, if you run a company and you are reading this, you know insurance premiums can be a huge part of your bottom line. Optimizing your costs without giving up essential coverage is a constant process of reviewing and revising your coverage parameters, checking out new products, and weighing whether you are better served by a comprehensive bundle policy or a few specialized insurance types from multiple providers. A lot depends on the state of the market right now, but it also depends on whether your company is ready to consider owning its insurer. It’s cheaper than most businesses realize, thanks to the creation of group captive insurance companies.
What Makes Group Captives Different
Self-insurance in various forms is hardly new. As an alternative risk management option, it has existed practically as long as insurance policies have been around. What makes group-owned captive insurance different from other forms of insurance that put you in control is the way cost and risk are structured. The reason for buying a policy is often more cost-effective than self-insuring is because the risk is spread among everyone participating in the insurance program. Group-owned captive companies provide a similar kind of risk spread by having multiple owners who need similar insurance policies, allowing each company to invest less upfront and take on less risk overall.
How To Set Up a Captive Insurer
Setting up a company to handle your insurance means working with people who know how the insurance industry functions. Luckily, there are captive insurance brokers out there who can do everything from day to day administration and policy design to finding the co-owners you need to make your ideal insurance affordable. Start querying some of them today if you want to learn more about what the costs and coverage options would be with a few different captive ownership scenarios and find out what owning your insurer can do for your bottom line.