Choosing to go with captive insurance over commercially available plans is just the first step in getting the right coverage for your company. You will then need to determine whether you want to join an established group or start your own captive. Starting your own is more time consuming and expensive, especially when established companies are available for almost every industry. To choose the right captive insurance company, you will want to examine their track record and associated costs.
One of the best ways to protect yourself and your company from taking on too much risk for too little reward is to research the track records of the captive insurance companies you want to work with. Look for things like how experienced the captive manager is in the industry; how many clients have been audited and what the outcome of those audits has been. It is also important to keep in mind that client references and testimonials are a good way to gather information on what the captive handles well and how they deal with dissatisfaction or other problems. A captive managed by someone who brings ingenuity and creativity to unique challenges to find innovative solutions is more likely to be able to evolve with the industry and handle any problems which arise.
The premiums and fees paid to the captive will need to be a savings over getting the same coverage from a commercial insurance company for the deal to work well for your company. Remember to keep potential dividends in mind when calculating the total costs, as well as how much you can save for various safety equipment, policies and improvements to your company.
Comparing captive insurance providers is much the same as comparing commercial ones, with the bonus of calculating dividends and tax deductions into the costs. You can usually save money over joining an established captive over forming your own or purchasing a commercial plan, but it is important to examine the variables for comparison.