If you’ve struggled with the rising cost of insurance premiums in your business, you may have considered the alternatives: either issuing 1099s to all employees and thereby avoiding issuing insurance, or becoming a member of a captive insurance group. This form of self-insurance is catching on, but not everyone is utilizing this resource as effectively as possible.
Captive insurance consulting agencies can help your captive insurance company make the most of its resources. The standard cost of insurance can be expensive, and there are several underlying reasons that include acquisition costs, high commissions, overhead, and administration fees. The point of captive insurance is to reduce these costs so the insurance provided doesn’t affect your company’s bottom line.
Many of the estimated premium costs are based on an average loss history in the market itself, but what if the premiums were based on your company’s loss history instead? If you run a safe operation without much risk, there is no need to pay exorbitant sums. Using a consulting group can help you work out exactly how much you should expect to pay and what steps can be taken to reduce the overall amount you have to pay.
Other resources can also be provided, such as risk-control services, claims service managers, and many other necessities that are often overlooked. All members of the captive insurance company should be given an equal vote in the management of the company itself. Doing so not only prevents a monopoly of power by one member, but also frees all members to spend their time focusing on their own business rather than worrying about the insurance company.
By utilizing a captive insurance company, you can reduce the amount your company pays for insurance. Just make sure you’re making the most of your captive insurance company. Hire a consultant to light the way for you.