Financial Benefits of Rent a Captive Insurance

There are many risks in providing services to the public, and it is important that loss protection be as comprehensive as possible. Even if a claim is determined to be insupportable, attorney’s fees can be substantial. However, in order to address all exposures, high-risk companies may experience coverage costs that strain their budget. If your premiums are extremely steep and continuing to climb, you may benefit from the alternative option of rent a captive insurance.

 

Individual Coverage

 

Captives are privately-owned funds created to address claims. Owners supply start-up and maintenance capital and determine the structure of the insurance. Renters pay participation fees and premiums to enjoy the advantages of individualized coverage. Since protection is based on the needs of your company instead of general loss trends, you can provide for areas not ordinarily listed and save the expense of risks irrelevant to your business. Costs are lower and security more complete, allowing you to save funds now and protect them for the future.

 

Investment Income

 

As an added benefit, the funds that a captive sets aside for claims are invested by the owners, providing capital gains. Premiums are added, further increasing the amount available for use. As an outside participant, you receive interest and share in underwriter profits.

 

The Bottom Line

 

Before the high cost of coverage forces you to price your services out of the market, you may want to look into the financial benefits of rent a captive insurance.

This post was written by , posted on November 21, 2014 Friday at 6:00 pm

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