What Is Captive Insurance and How Can It Help If You’re Self-Employed?

When you’re an entrepreneur, you know that you have to think a few steps ahead and do more for yourself. 

When managing your risks through an insurance policy, you have the ability to take your destiny into your own hands even more with a captive insurance policy. 

What is captive insurance?

Below we’ll explore this form of insurance, explain what it does and why it can be a great investment. 

What Is Captive Insurance and How Does It Work?

As a business owner, you need to have insurance that protects your company from liabilities and prevents your personal finances from becoming entangled. 

However, captive insurance lets you go around the confines of a traditional insurance plan by creating a customized independent plan with the backing of a financer. When you create a captive insurance policy, you also establish your own independent insurance company. 

You would have to work with a captive insurance company that can help broker the arrangement. 

What are the Benefits of Captive Insurance?

Once you look into captive insurance, you’ll see exactly why it can be helpful to your business. Here are a few reasons:

1. You Have Full Control Over the Tailoring of Your Plan

Rather than accepting a standard-issue plan offered by an insurance company, captive insurance lets you create terms that are specific and beneficial to your business. You will only purchase the type of coverage that you need and can tailor the terms to suit you. 

You are far better able to manage your risks when you can create your captive insurance plan. 

2. You Create Your Own Independent Insurance Company

By having your own independent insurance company, you keep your personal finances out of it. 

This further ensures that you won’t be held personally responsible for any liabilities that you incur. As your businesses expand, you’ll keep building equity in your insurance company the more you extend and honor your policies. 

It’s like building credit and will make your business as a whole more valuable. 

3. You’ll Be Able to Facilitate Your Payment Every Step of the Way

Captive insurance also creates complete transparency about how and when you’ll get paid. 

You will be involved in every step of the process and can expedite the claim to get paid sooner. Knowing you will get paid will give you peace of mind during a potentially stressful claim. 

4. It Opens Up a Lane if Insurance Companies are Wary of Your Business

This is also an intriguing option if you’re simply having trouble getting insurance otherwise. 

For instance, you might have a high-risk business, such as CBD sales, and insurance companies might be wary of doing business with you. Knowing that you can circumvent the process and create your own captive insurance company gives you more power and flexibility throughout your business endeavors. 

Shop For Captive Insurance Today

So what is captive insurance?

As you can see, it’s the type of insurance policy that gives you more control. You’ll need to link up with a captive insurance company to learn more about creating your own policy.  

Check back for more outside the box business tips for entrepreneurs. 

Leave a Reply