With a traditional insurance programme, you pay a premium each year and claim under the policy when a loss occurs. This suits many small and medium businesses but if your annual expenditure is large enough, or you have some risks which are uninsurable, you could consider captive or self-insurance options.
Put simply, you set up and control your own insurance fund which allows you to retain more risk ”in-house”, retain some of the premiums in a fund to meet smaller claims and pay only for the cover you need in the general insurance market. This also encourages you to manage and improve your own risk which can lead to your fund becoming a profit centre.
Most of the world’s large corporations have such arrangements but now it is an approach within the reach of many medium-sized companies and affinity groups because the insurance market has developed “Cell Captives” where your funds and risks are segregated within a professionally managed insurance company, reducing the amount of capital and annual premium required to make the concept work.
If you want to make the best possible use of your resources and reduce your insurance costs, contact us for a preliminary discussion and free appraisal of the options.