What Is Captive Insurance?
If you run a corporation or large organization with significant insurance needs, captive insurance can help you effectively and affordably manage your risks and lower your premiums.
What is captive insurance, and how can you use it to manage risks for your corporation or large organization? Palmetto State Insurance (PSI) can guide you through the customization of this unique self-insurance product designed to help you save money while securing effective coverage for common risks related to your industry.
Typically utilized by companies with significant insurance needs, long-term financial stability, loss histories surpassing industry standards, and the ability to manage risks effectively, captive insurance requires careful consideration and ongoing management and oversight. With nearly 30 years of experience in the insurance industry, PSI is your trusted partner to navigate the complexities of captive insurance plan development to achieve your coverage goals.
Understanding Captive Insurance
Captive insurance refers to a form of self-insurance in which a company or group of companies create their own insurance company to cover their own risks. Instead of purchasing insurance from a traditional insurance company, the organization forms its own subsidiary or separate legal entity, known as a captive insurer, to cover risks.
The primary purpose of captive insurance is to enable your company and any partner companies to retain a portion of the risks you face and finance them internally rather than transferring them entirely to an external insurance company. By creating a captive insurer, you can gain more control over your insurance program, customize coverage to specific needs, and potentially realize cost savings in the long run.
Benefits of Captive Insurance through Palmetto State Insurance
The business insurance experts at PSI can help you experience several benefits of a captive insurance plan. One of the top benefits is a safer workplace. By developing a captive insurance program tailored to the captives’ needs, PSI can help you mitigate the risk of workplace injuries and fatalities, creating a safer workplace for employees.
An additional benefit of leveraging the captive insurance model is insurance cost control. Through a traditional insurance model, your premiums are based on state rates and industry averages, which can lead to costs that do not reflect your organization’s risks or loss experience.
When creating a captive insurer, PSI will consider your five-year loss history to come up with your premium, giving you more control over your insurance coverage and costs. As a result, many companies with captive insurance enjoy lower premiums. The cost structure of the captive insurance model also helps companies minimize operational costs and reduce overhead, with the savings going straight to the company’s bottom line.
Other benefits of captive insurance include:
- Insulation from fluctuations in the commercial insurance market
- Enhanced risk control
- Increased profit potential
- More control over claims management
- More time to focus on growing your business
Why Choose Palmetto State Insurance for Captive Insurance?
With PSI as your insurance agency partner, you can design a captive insurance program to meet your organization’s unique needs. If the needs of the captives change in the future, we’ll be there to make plan adjustments, ensuring the coverage continues to provide comprehensive protection.
Schedule a needs assessment with Palmetto State Insurance to find out if captive insurance is right for your company.
