With the constantly changing insurance market, construction companies have become some of the most sophisticated insurance purchasers. The risk management department knows that every dollar saved in insurance can lead to a more competitive bid for their next project. Some states have adopted laws that allow workers compensation claims to attach to general liability policies. This has led to insurers dropping out of certain markets and premiums rising at rates that are not justified by loss history or current exposure.
With no end in sight, business owners and their risk management team are turning to captive insurance. Forming a captive insurance company allows business owners to:
i.) Design policies tailored to their risks
ii.) Hire an independent third party administrator (TPA) to manage their claims
iii.) Full transparency
iv.) Accrue investment income while premiums are reserved for future losses
v.) Profit from good claims history
Construction firms with solid financials, good safety programs and the desire to take greater control of their insurance, can benefit from a captive insurance company. Major contractors, developers, and suppliers have set-up captives as an alternative to traditional insurance. A captive insurer protects against risk, may allow for tax-deductible premiums, controls claims and retains the profits for its owners.
Having the ability to turn an expense line into a revenue stream is of interest to any business owner. We welcome a discussion to see if captive insurance is right for you. Learn more.