Association captives are becoming much more common and popular these days, and many business owners are wondering what they are missing out on. If you are a business owner and you want to know more about the benefits of joining an association captive group and receiving worker’s compensation, general liability, and property and casualty coverage, here is some basic information about how captives work as well as some of their main benefits.
How Captives Work
Captive insurance companies are essentially private insurers that are subsidiaries of another company. Association captives take the payments that the parent company would have given to a regular insurance company if they purchased insurance through traditional channels. The captive association then uses the money from the parent company’s payments to cover any claims made against the parent company. If the amount from the premiums is more than the claims amount, then the captive association makes a profit and the parent company benefits from the profit, instead of a third-party insurer.
A few of the benefits that companies enjoy when they become part of association captives include:
- Greater flexibility and control of insurance coverage
- Greater stability in cost of insurance overall
- Ability to control the cost of claims for more immediate financial rewards
- Greater insurance coverage availability for a reasonable cost
- Better insurance coverage service
- Potential to improve cash flow
If you are a company owner who is interested in the benefits of association captive membership, talk to an association captive company today and find out more.