[caption id="attachment_424" align="alignright" width="300"] Captive solutions[/caption]
Captives are often revered for their financial benefits. Their ability to underwrite risks allows them to accumulate money that would otherwise be absorbed by a traditional insurance carrier. Furthermore, commercial insurance companies draft policies that are designed to fund in-house expenses, such as budgets for advertising and marketing and compensation for a host of employees, whereas captives eliminate these costly expenditures. Financial implications may be the driving factors for choosing captive solutions, but they are certainly not the only motivating aspects.
Even if a business is able to afford a standard insurance plan that covers risks, there are still certain exclusions and deductibles that may leave the company vulnerable. For example, insurance for general liabilities can still be subject to omissions of employment practices liabilities through commercial carriers, unlike captive solutions.
Captives usually create policies that apply to the specific profile of a given business entity, opposed to the generic plans that are drafted by traditional insurance companies. This can allow for more accurate uses of financial coverage.
Commercial insurance companies often assign a defense attorney to their client’s legal case without accepting any input from the client. By contrast, captive solutionsusually allow businesses to select their own representation for any claims made against them, which can result in a higher quality of counsel.
Captives offer more than just financial benefits; they provide comprehensive approaches to varying aspects of business insurance.