For companies looking for alternative risk solutions, a captive insurance program can provide great benefits. A captive is created when employers, or others, come together to form an organization that self-funds certain insurance needs, and for the most part, covers their own losses.
This type of program offers several benefits.
More Control in the Hands of the Business Owners
The parties that decide to form the captive insurance program are generally choosing to bypass traditional third-party insurance. By doing so, they are more in control of the underwriting profits, claims and the overall workings of the captive.
Better Management of Finances, Profit and Risk
By using their own funding to build an insurance entity, the owners of a captive avoid paying the extra costs associated with third-party insurers. They can keep underwriting profits, and because they are using their own funds to pay claims, the employers often put a higher focus on safety and risk management. This benefits employers and employees as it can contribute to a reduced number of claims.
When an employer has an industry specific need or serves a niche market they can have a hard time finding traditional insurance coverage. A captive can solve this problem.
Managing finances, providing quality benefits and reducing the risk of loss are all critical to growing and maintaining a business. A captive insurance program can provide a business owner with options to manage all of these concerns while still working to improve their business.