Accessing the insurance you need to keep your business safe can be costly, especially if you’re in an industry with very specific needs, like those faced by the marine industry or by healthcare providers. As a result, decreasing the cost of your risk management plan can be essential to accessing the level of coverage you need to have peace of mind. If that’s the case, you need to consider all your options, and you have quite a few.
1. Mix Bonds and Insurance for Savings
Sometimes, the best way to manage risk is not to buy insurance. That doesn’t mean you can afford to go without some kind of coverage, but insurance coverage is no the only kind. For many risks, including common risks like embezzlement, bonds can provide a low cost alternative to a traditional insurance policy. Bonds are not always the most efficient way to manage risk, but judicious use of bonds for some risks and insurance for others can save you a lot of money.
2. Form a Captive Insurer With Other Businesses
Group captive insurance allows you to own a share of your insurer and exert greater control over the terms and costs of your policy, without the expense that comes from financing a captive company on your own. Sharing those expenses with other companies that need similar coverage also creates a risk pool that mirrors those used to contain costs in the mainstream insurance industry, except you and the other owners receive the dividends if the insurer happens to turn a profit.
3. Comparison Shop Coverage
While captive companies often save you money on the policies they write, using them for all your insurance means providing them with the financial reserves to cover all those claims. Sometimes, the best coverage is split between captive insurers who provide niche policies at costs you control and traditional providers who give you the benefit of a big risk pool for common kinds of coverage, like your general liability or commercial vehicle policies.