Control: Why Business Owners Need Captive Insurance
Captive insurance gives business owners greater control over risk management, claims, surplus assets, and cash flow. Control is why owners became owners.
The Drive for Control
Successful business owners in every field share several common characteristics. Control is a position business owners are used to being in. This characteristic often drove business owners to becoming an owner in the first place. Not everyone is cut out to be an owner, and of course abuse of these attributes can be harmful. However, most owners use these powers for good — primarily for the continued success of their business.
Owners accomplish objectives such as growth, expansion, providing work opportunities and a living for employees, service, wealth accumulation, philanthropy, and many more.
Captive Insurance Creates Control
There is a tool, simple and complex at the same time, which actually gives business owners greater control. It's simply insurance — specifically captive insurance.
Captive insurance creates control over a business's risk management program. Exposures selected may or may not replace existing policies. Coverage may complement existing policies and programs, hard-to-locate or expensive exposures of the operating business, or currently uninsured risks of the company.
Enhanced and Synergized Control
Captive insurance then enhances control as premiums are paid to the business owner's own insurance company. The owner now has much greater control over claims, surplus assets of the insurance company, and evening out cash flow of the operating company.
Captive insurance then synergizes control of future events. With retained assets of the insurance company, an owner can re-deploy these assets for retirement, expansion, acquisitions, buy-outs, charitable giving, and more. Additionally, coupled with other actions such as QSBS, all actions are multiplied exponentially.
Control Over Your Risk Management
Business owners want control, which is why they are the owner. This is a good thing — having control over hiring, processes, operations, and finances allows the owner to make decisions, sometimes hard decisions. Why should your benefits and risk management be any different?
Successful, profitable owners ultimately control the success of their business. Delegation and empowering trusted employees or advisors is not necessarily giving up control — it's strengthening it.
As a business owner, you can and should control the risk management and benefits of your company. By doing so, you will recognize multiple benefits, all by taking control.