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What Is Captive Insurance

Captive insurance is a way for companies to protect their assets outside of the traditional insurance coverage market. They provide tailored policies through companies combining assets with other businesses to create their captive group. There are two different kinds of this insurance.

Pure - In a pure insurance group. The Policies and assets are owned only by the companies that are in the group.

Sponsored - This is a similar coverage plan. The only difference is that it is owned and operated by a separate entity.

A captive can help you get the specific insurance policy you need. The best part is you can do it without having to buy anything you don't need. That leads to effective policies and a lot of savings. What companies should look into developing their captive plan?

Just about every marketplace can take advantage of this type of insurance. It benefits every company that uses it correctly. Some of the most common industries where captive coverage is used are manufacturing, hospitality, and agriculture. It is more popular with businesses that have rare occurrences they need to be ready for because typical insurance companies won't cover those types of claims.

You may want to start with a sponsored captive consulting group. You probably don't understand the best way to cover yourself or the ins and outs of the insurance business. A third party sponsored captive fund of insurance may be a better resource because they have the experience and knowledge to develop the best policies. It is hard to design an adequate insurance policy if you don't know what you're doing.

Sponsored captives are also a better resource for companies that are too small to be able to fund their adequate captive policies properly. This kind of coverage can help the business grow their business assets until they are ready to strike out and form their captive company.

A common company-type that is known to benefit from a captive policy is a company that can't get the right coverage in the traditional marketplace. That can happen for a different reason. These companies can use a captive consultant to design a tailor-made policy for themselves. It can be an ideal way for businesses to get adequate workman's comp, liability, or damage recovery insurance

If you own a company that can't get the coverage you need, you should consider getting a captive policy. It is the ideal way for a company to grow their assets when they can't work in the traditional insurance marketplace. The longer you have this kind of policy, the bigger it will get.
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