Your business likely already has a group insurance plan in place to protect the owners and assets from any unlikely future financial burden. However, you may have never considered the benefits that a group captive insurance plan could have on your business. When your business has a lot of liability, it can be more expensive to have a third-party insurance company to cover your business, which is why a captive insurance plan might be the best option for you.
How It Works
Most insurance companies or separate entities that your business pays premiums into in order for coverage when disaster may strike. Captive insurance, on the other hand, is a company that is owned by the business seeking insurance, such as yourself, to which you pay your premiums. Now, you may be wondering whether or not this is simply saving money with extra steps, but there is a little more to it than that.
Corporate Taxes
As a business, you likely have worked out every conceivable way to help save on corporate taxes every year. The great thing about captive insurance is that the money you pay in premiums to your captive will end up being tax deductible. You will be able to set a specific amount as your premium per month, all of which will be completely accessible when you need the insurance.
Risk Management
Regular insurance companies are able to protect themselves as well as those insured through the insurance company. Captive insurance, on the other hand, is a little less stable and the captive is completely reliant on the company that owns it. By having your own captive insurance, you will be able to manage the risk you have as well as plan for an improved cash flow to help protect you and the captive insurance.
Captive insurance can be a little tricky, so if you are considering going through with a captive insurance policy, be sure to work with a professional who can help get you on the right path.