Captive Insurance

Myths About Captive Insurance

As you look through your options to contain your risk and expenses, don’t overlook captive solutions. A lot of companies disregard captives, assuming that their business would be a poor fit. Unfortunately, many of these companies believe in the myths surrounding captives. Here are a couple of those myths debunked.

You Can’t Cover All Business Risk

In general, you do choose captives to cover risks that are not associated with traditional insurance. For example, warranty programs, loss of customers and patent infringement. However, you can also use captives in a more broad sense. Any risk to your company can have coverage.

You Pay Too Much for Captives

When you look at the costs of captive insurance, you may be intimidated by it at first. After all, you have management fees, LLC costs, reserve funding and more. However, you need to keep in mind that captives are part of a long-term strategy.

Captive solutions can be extremely beneficial to companies of all sizes with a variety of risk mitigation needs. To ignore captives could result in you paying too much for your insurance coverage. While large businesses tend to dominate captives, you don’t have to be a Fortune 1000 company. Businesses that generate as little as $150,000 in insurance premiums can easily use captives.

Captive Insurance Coverage Plan Insurance Coverage

Learn the Advantages of Rent a Captive Insurance

If you are thinking about captive insurance, here is what you need to know. Captive insurance involves a parent group that creates a licensed insurance company to provide solutions to the corporation. A rent-a-captive is when there is a third-party that forms a captive.

Rent Captive Disadvantages/Advantages

To form a captive is not an easy task, according to the experts at Caitlin Morgan Insurance. One of the major benefits of a rent-a-captive is that it is not nearly as difficult. Now, on one hand, you won’t own your own captive and you will not have incorporated your own entity, but there are other benefits that you may not realize.

One of these main benefits is the time that you save. It takes a lot of time and money to form a captive. There are so many different intricacies and you have to be able to hire the right staff towards the formation. When you rent a captive, you have control over your insurance program, you have minimal costs and flexibility in your programs.

A rent a captive insurance company is one that you can rent. You are able to have all of the benefits that you would have with your own captive insurance arrangement. The difference is that you don’t have to own or manage it.