The captive insurance industry can be overlooked when an organization is shopping for policies. However, it should be at the top of the list. That’s because captive insurance has been a stable, profit-making industry for over five decades. In addition, it can relieve many pain points of a business.
The DO NOTs of captive insurance
Nevertheless, captives are not as simple as signing up for a policy and establishing premiums. There are a number of factors that allow a captive plan to go from concept to implementation. Between the start and end are a number of DOs and DO NOTs for a company to review. Here are three such DO NOTs every company needs to avoid during the captive process.
DO NOT do it alone
Captives can get complicated. Not only are the policy owners the decisions makers but they also receive dividends for their investments. So, there are a lot of working parts that can overwhelm an individual. DO NOT select or administer a captive insurance program alone. Reach out to a company like Captive Resources to get proper resources.
DO NOT assume all captives are the same
Just like standard commercial programs, not all captive insurance programs are designed the same. Bigger organizations may use a standard program, but smaller organizations might need to choose a policy with a bit more flexibility. As mentioned above, a captive resource company helps organizations learn what their capacity is. In fact, they may be able to pair with other small companies to get the same benefits of a larger one.
DO NOT start without some research
Investigation is key to finding the right captive for a business. Find other non-competing companies in the area to see how they manage their captives. What is liked in each can be added to a plan for the desired captive. In the end, finding the right captive program takes patience and study. However, when done, the benefits will be great for the company and its employees.