There are many risk management strategies available to Connecticut businesses designed to help moderate the potential impact of a business mishap. Traditional business insurance, for example, is one of the longest standing risk management solutions to help an operation protect their property, employees and assets from a host of risk exposures. Establishing a captive can be an alternative solution for operations looking to have more control over their risks and assets.
As defined by the National Association of Insurance Commissioners, a captive is an insurance company created and wholly owned by one or more non-insurance companies to insure the risks of its owners. Essentially, captives are a form of self-insurance where the insurer is owned entirely by the insured. Captives can be formed to cover a wide range of risks. In fact, nearly every risk underwritten by a commercial insurer can be secured through a captive. Once established the captive operates like any standard commercial insurance company and is subject to all the same regulatory mandates such as reporting, capital and reserve requirements. This approach is most popular among large, multinational companies and organizations however there is a growing trend among smaller and mid-level companies to participate in this form of risk transfer.
One of the primary draws for an operation to establish a captive is the cost effectiveness. Establishing a captive can be a less expensive risk management solution than purchasing conventional insurance, depending on the needs of a given business, and is often ideal for low-level risks or those who require unique coverage inclusions. Setting up a captive allows business owners to secure coverages that may not be widely available or ideally priced in the commercial marketplace, as well as to fill in coverage gaps for their particular needs.
At Sinclair Risk and Financial Management, we specialize in helping Connecticut businesses mitigate their exposures through finding comprehensive business solutions. From our complete commercial insurance offerings to our Alternative Risk and Captive programs we can our risk management specialists ca help your operation secure the ample protection. Give our CT business risk specialists a call today at (877) 602-2305 to learn more about our services.