There are a lot of questions about what captive insurance is and what it can do for a business. These are legitimate questions, as many of us seem to misunderstand the intention behind captive and the insurance they are offering. The reason why so many businesses are interested in captive is not because it is some new type of insurance company with great policies. The reason why they are interested is because the entire company is run in a unique way, as the businesses get to part-own a share in the company that is giving them insurance.
It may sound like a mad idea, but if you think about all the problems that businesses have with insurance companies, the captive model can change all of this. For instance, many businesses feel as though the insurance company will do anything to make a bit of money, and that routinely means they are “screwing over” businesses during insurance claims. And that is something many businesses dislike when they are trying to get insurance from a company. But if they hear about captive, they may change their minds about where they get a new policy. Captive ensures you will have a totally different insurance experience.
When you part-own a share in the company, it means that there is a certain percentage of Captive that belongs to you. It means you have a seat on the table along with the other businesses, and you will all sit together to figure out how you are going to provide insurance for each other. Yes, the company still must run and make money independently. But making a huge profit is not the whole goal – getting great insurance is the goal. And in this way, what you are getting from captive is hugely different to what you are getting with any other provider.