Insurance Services of Washington Blog
The subject of captive insurance isn’t something people talk about at the dinner table, but it’s important to discuss it now especially if you are on your way to starting a business.
Captive insurance is a general term that people juggle around insurance centers. There are still a ton of little-known facts about it. As an entrepreneur, it’s important to know what these are.
Handling a company is a huge responsibility, but let’s try to break it down to one sentence. Running a business means reducing all the risks as you possibly can. That’s what captive insurance can help you do.
The reality about captive insurance is that it helps businesses all around the world with its financial well-being. Of course, the results aren’t as apparent the first time around in the relationship, but it is most certainly the kind of investment you want to have at the beginning of your business.
It takes an excellent manager to juggle business risks effectively, but no matter what you do risks will always be present. What captive insurance can do for you is aid you in building up cash reserves since this is the main ingredient you need in risk management.
There’s just one problem. Aren’t all insurances supposed to protect businesses from risks? So, why should opt for captive insurance when you have a whole bunch other insurance options to choose from?
Greater Flexibility With Captive Insurance
Our answer to that is greater flexibility. Let us first talk about captive insurance in comparison to the traditional kind.
In the past, general liability insurances used to be the best option for businesses since it already covers both injury and property damage for completed or ongoing operations.
However, over the years as company standards lifted, a ton of executives decided that general liability insurances use too much of conventional methods that limit the benefits for business owners.
There’s also self - insurance, which is similar to captive insurance in a way because it lets business owners set aside a particular amount of cash for the sake of investment. You get to decide where this money goes to. Most importantly, you have the opportunity to earn profit from your investment. Self-insurance isn’t as liberating as you think, however, because it can lead to poor claims.
Lastly, there are Risk Retention Groups. We don’t consider this a good idea as well because it is only capable of providing you liability coverage and nothing more.
So, going back to the question “why captive insurance?”
For one thing, there’s nothing conventional about captive insurance. So, it’s a lot more flexible compared to other insurance means.
With captive insurance, you become more involved. Instead of relying on third-party entities, what you’ll do is set up a separate captive insurance company to handle the premiums for your business in question. You are in complete control. Whenever you need your funds, you’re free to withdraw at your convenience.
At Insurance Services of Washington Inc., we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (425) 868-1123. Get your free quote today by CLICKING HERE.