Making the decision to participate in a captive insurance program can save you a lot of money, but like many alternative insurance options, it also requires the right combination of coverage choices and help setting it all up. On top of that, since a captive insurer is a company in its own right, there are ongoing administrative concerns to deal with like policy updates, taxes, and similar upkeep-related tasks. This can get a little pricey up-front for companies looking to establish sole ownership. On the other hand, opting for a group-owned captive can minimize those costs while providing some shared risks to help make the business more stable overall. If you decide on a group captive, you can easily match with companies who are looking for similar coverage options by working with a captive insurance broker.
Screening Captive Brokers
Different brokers offer different options. Some cater to businesses in a set range of industries. Others only work with groups or sole ownership options. Some only work in certain states. Researching possible brokers to figure out their limitations and options is the first step to finding the right one. Another consideration is ongoing administration. The right broker can handle the daily paperwork of the business for a management fee, but you can also hire a third-party management company for that. The right option for your business will depend on the other owners and the bottom line costs, so it’s something to crunch the numbers on as you’re browsing.
Soliciting Quotes for Setup
The first cost to worry about is the cost of getting into business. After that, the question of ongoing maintenance is important, but it doesn’t become important until you know you can make the transition into this type of insurance. After you’ve gotten your choices down to a couple top firms, take a look at those cost quotes and ongoing administration expense estimates so you can better weigh your choices. Remember, too, the more participants in your group captive, the cheaper it will generally be for each participant to access the policies they need.
Make Your Insurance Process Easy
There’s a lot of work that goes into setting up a captive company, but once the ball is rolling it represents a chance to get into a more efficient groove with your policy updates and coverage administration. The benefits to that streamlining are harder to quantify than cost savings, but no less real. Learn more about captive insurers today to help you decide the best way forward for your company.