Controlling the cost of your risk management is one of the best ways to reduce your overhead, but how can you control the cost of your insurance? The answer is captive insurance ownership. Captive insurers are owned wholly by the companies they insure, so they work for you. The best part? You don’t necessarily need to be able to afford to spin out your own insurance company to participate. There are plenty of ways to build a captive insurer cost-effectively.
How Does Captive Insurance Work?
There’s a whole captive insurance industry designed around facilitating your ability to participate in this innovative approach to business insurance. They help with the administration of your new business. The result is an easy to manage approach to a product that gives you a superior level of control over your business.
What Material Benefits Does Captive Insurance Bring?
It’s not just about more control over your risk management. When you use a captive insurer, you have the power to insure your business against risk where outside insurers don’t have a model for coverage. Even when that’s not the case, there are often significant tax savings to the use of captive insurance, and the structure of the subsidiary company means you’re not self-insuring, because the captive company is a separate entity. This also means your subsidiary does not necessarily have to be based in the same state or country as its parent company, providing you with more options to manage your tax obligations.
Learn More About Captive Insurance
The best way to learn more about this topic is to talk to an insurance company that works to help set businesses like yours up with their own captive insurers. They’ll be able to talk about how this kind of company fits your existing business model, as well as what material savings you can expect based on how your current insurance solution compares.