The idea of owning your own insurance company is hardly new. Captive solutions have been around for decades, as has self-insurance, which takes a lot more capital. It’s easy to get the two confused if you are new to alternative risk transfer devices, but the big difference between them is literally whether you open an outside business to handle the policies or you self-fund internally. By starting a captive insurer, you are able to create a financially independent company and tweak policy costs to keep it solvent. When you insure yourself, you don’t have that separation. You also don’t have the option of working with other businesses in a partnership.
Captive Solutions for Big and Small Companies
Captive insurance programs have options that suit even small businesses, because they bring together companies with similar insurance needs to broker multi-parent captives as needed. At the same time, companies looking to keep total control over the captive will find there are options to allow them to do so. The result is the ability to open up this risk management option to businesses that have usually had to rely on mainstream insurance options. You can even use a captive to handle certain areas of coverage while taking advantage of the cost savings that come with major carriers when you have common insurance needs like general liability coverage.