Health insurance can be one of the biggest expenses for a business, depending on how many employees need to be covered and what kind of coverage you want to offer. Finding ways to provide more without breaking the bank can be a major part of a cash flow management plan as a result, especially since benefits are a major factor when it comes to recruiting. Often, an alternative risk transfer solution is the best way to square this circle, and captive insurance programs are among the most common solutions in the market today.
How Captives Benefit Companies
A captive insurer is one that is owned by the companies it insures. There care single-parent captives as well as multi-parent captives, so you can split expenses with one or more businesses who have similar needs to yours as an additional cost-saving measure. The benefits of a captive insurance program include reduced costs in most cases, but they go a lot further. When your company owns its insurer, you get the benefits of having insurance underwritten by an outside company instead of the requirements of self-insurance without a formal policy. You also get the control that self-insurance brings since you own or partially own the captive. That includes the ability to create the exact insurance policies you need. Often, it’s the most cost-effective method of getting that coverage, too.