Whenever we talk to people about captive insurance, we get a ton of interesting responses. And one of the things that we hear about the most is people wondering what captive insurance is all about. They assume it is some unique type of insurance that a company can get that is better than what other providers are offering. And in a way – it is. But it is also not a different type of insurance. It is a different way of getting insurance, which is an important distinction to remember. Let us talk about the specificity of captive insurance companies and how it works.
The purpose of captive insurance is to give businesses in the United States a new opportunity to get insurance services at a much better rate. And it is not just about money, but also about the type of service they are getting. It is an insurance company where businesses are going to buy in to have a stake in it. That means if you are buying into this company, you will have a percentage stake in the company that is giving you insurance. And what does that mean for the insurance policies that you will get?
It does not make them free – of course. Otherwise the company would not make any money. But what it does mean is the policies and terms are designed to help businesses, not help the insurance company. And since you are a part owner, it means that you will always have a say in how things are done at the company. And for many businesses, this is the most important aspect. You are not under the control of any insurance company. You are determining your own destiny where insurance is concerned. And that is why many companies veer towards captive insurance as an option.