Businesses need insurance. That’s a simple fact. Something can and usually does go wrong from time to time and having coverage to handle related expenses gives you peace of mind. There are different types of insurance and insurance companies. It’s important to choose the kind that best suits your business. There are various types of captive insurance companies. One of them is the association.
One type of insurance company is the association captive. This kind of company is owned by a group of members who are all in the same trade or industry. Only members of the association may participate in the captive. This type of company is similar to a group captive with the main difference being that all the owners have similar insurance needs. There are several benefits to an association captive. Some of them are:
- Administration is more cost-effective and thus lowers premiums
- Insurance protection can be tailored to give members exactly the coverage they need
- There are helpful tax benefits
- There is increased flexibility in underwriting
- Wholesale reinsurance markets are easily accessible
- Increased coverage and capacity are accessible
- Investment and underwriting income can be earned on reserves which can help pay for losses
Every business should have insurance and there are many different kinds. An association captive may be exactly what your business needs. It’s a good option to consider.