Captive insurance programs have offered savings to their participants for decades, but not many business owners realize that they can be used for workers compensation in many areas. They are familiar for liability and property protection coverages for businesses with unique needs, but the fact is that captive insurance can cover literally anything you need. Captive workers compensation requires experienced oversight, but the same companies that can match you with partners for multi-parent captives can also provide day to day administrative services on contract.
What Makes Workers Compensation Different?
The biggest difference between workers compensation coverage and most other forms of business insurance is that workers compensation is required by the state to cover everything for approved claims, without a policy limit. This makes it a little riskier to invest in as a captive operation, but that risk can be averted with the right financial reserves because future premium adjustments can be used to replenish those reserves in the event of a major claim or one with long-term recovery expenses.
What Type of Captive Insurer Suits You?
There are a few different models for captive workers compensation. Single parent companies are the most expensive to fund because they require you to cover the entire cost of the captive company. Multi-parent captives pool the costs and risks, but this can be undesirable in workers compensation suits. There are also segregated cell group programs that legally separate the parent companies while still providing the cost savings of a group captive. To learn more, you should to talk to a captive insurance specialist about your coverage needs.