You’ve likely pursued traditional business insurance. But when it comes to protecting your business from a myriad of outside threats in today’s complex and ever-changing environment, is traditional insurance enough — or even the right fit?
With the hardening of the insurance market and costly premiums, it’s a timely question, especially as more and more businesses are looking to alternative risk transfer. And an increasingly trending option is captive insurance as worldwide more than 100 captives formed last year as reported by Business Insider.
Related: 4 Ways to Protect Your Business From Inflation
Background of traditional and captive insurance
Traditional insurance has built up a portfolio of coverage offerings and options for businesses. Some components of traditional insurance include risk distribution, tax deductibles on premiums and many blanket insurance coverages such as general liability insurance, business income insurance and worker compensation insurance.
Captive insurance is a wholly owned subsidiary that exists to protect your business from unique threats and provide the dynamic and unique plan your business needs. Captive insurance may be right for your business if it can’t receive the insurance coverage it needs from the traditional insurance market.
For instance, business interruption insurance is a coverage that insulates your business from disasters such as floods and earthquakes. This coverage does not, however, protect businesses from fires or tornadoes — and to activate this insurance, there must be an event that “triggers” your policy.
Businesses that shut down during the pandemic lost money while they were closed, and they needed to be fully shut down to trigger their business interruption policies. With captive insurance, however, businesses can access their stored cash reserves and cover losses during instances of extended partial shutdowns that are not covered in a traditional insurance policy. Unlike this policy language with its many coverage exclusions, captive policy language is geared to protect the business owner.
Captive insurance also doesn’t penalize for other firms’ bad behavior and the cost you pay for insurance isn’t based on other similar businesses filing claims. Other considerations for possibly leaving traditional insurance are in the hardening of premiums, and companies looking to have less expensive coverage.
Keeping that in mind, companies seeking more control over their current coverages and insurance programs can craft a bespoke insurance plan built around their business’s unique risk profile with their captive plan.
Related: How Businesses Can Navigate the Treacherous Waters of Trade Wars
Premiums aren’t a sunk cost with captives
High premiums with traditional insurance providers can handcuff your business to hardening monthly rates and can leave your business feeling the impact of those high expenses. With captive insurance, however, your business can retain profits when claims aren’t paid.
These retained profits see deferment of taxes on loss reserves as well, allowing for the accumulation of a larger pool of funds for investment or unforeseen financially impactful situations such as litigation. These funds can also be utilized to insulate your business from losses during economic downturns or similarly fiscally challenging situations.
For a small business, this can help with scalability as expensive premiums paid with traditional providers can mean less money spent on expanding your business. Additionally, as your business scales in size and needs, so do the coverages required for your business to be adequately protected. Comparatively, Kiplinger pointed out that captive insurance can provide these necessary adaptive coverages as the need for them comes up along the way.
Related:5 Trending Captive Insurance Considerations for 2022
Policy differences and FAQs
If your business faces potential cyberattacks, medical malpractice suits and many other costly risks, the deductibles associated with these protections are growing with traditional providers. Premiums for cyber insurance have increased by as much as 50% and 100%.
Relating back to the earlier example, flexibility in captive insurance policy language would help. As evidenced by the civil unrest of 2020, whereby areas of the country experienced protests, riots and sit-ins that destroyed neighborhoods. If the area around a business was damaged and inaccessible, but the business itself was not, again, the traditional insurance policy would not be triggered, meaning your business can be left paying out of pocket.
Related: 5 Ways to Protect Your Business Against Cyber Attacks
So how much time does it take to create a new policy?
With constant changes in what businesses need in their insurance protections, traditional insurance providers can often be behind the curve. Where new threats form, it also means new policies need to be made to cover vulnerable parts of your business.
According to Deloitte, traditional insurance takes 12 to 18 months to create and release new insurance products. With the rate at which threats arise and can potentially harm your business, that is not an acceptable timeframe.
Additionally, when buying traditional insurance coverage, startup costs are limited to the premium. Starting a captive insurance company, however, requires start-up costs and capitalization requirements with formation fees including legal costs. This is because a captive insurance company is a legally formed corporation. Additionally, with captive insurance, you are building upon your risk mitigation strategies to accrue funds for potential losses.
While forming a captive may be daunting to a non-insurance professional, there are many captive management companies that will serve as a business owner’s insurance front office, that help companies form and manage their own wholly owned captives.
Captive insurance can be a viable option for businesses large and small. Businesses best served by implementing captive insurance are those with complex, evolving, difficult or costly risks to insure through traditional plans and those who would benefit from increased cash flow, liquidity and profitability. Traditional insurance and captive insurance both have distinct features and one isn’t necessarily a better fit than the other. Regardless of what you choose, protecting your business with the right insurance plan is a necessity.
您可能已经考虑过传统的商业保险。但在当今复杂多变的商业环境中，面对各种外部威胁，传统保险是否足以保护您的企业，甚至是否合适？
随着保险市场趋紧和保费上涨，这是一个值得探讨的问题，尤其是在越来越多的企业寻求其他风险转移方式的情况下。据《商业内幕》报道，去年全球新增了100多家自保公司，其中自保保险正成为一种日益流行的选择。
相关阅读：保护企业免受通货膨胀影响的4种方法
传统保险和自保保险的背景
传统保险为企业提供了一系列全面的保险产品和选择。传统保险的一些组成部分包括风险分散、保费税收抵扣以及许多综合保险，例如一般责任险、营业中断险和工伤赔偿险。
自保保险是一家全资子公司，旨在保护您的企业免受特殊威胁，并提供您企业所需的动态且独特的保险方案。如果您的企业无法从传统保险市场获得所需的保险保障，那么自保保险可能更适合您。
例如，营业中断保险可以保护您的企业免受洪水、地震等灾害的影响。然而，这种保险并不涵盖火灾或龙卷风等灾害——而且，只有发生触发保单的事件，该保险才能生效。
疫情期间被迫停业的企业在停业期间蒙受了损失，而且必须完全停业才能触发营业中断保险。但有了自保保险，企业就可以动用其储备现金，弥补传统保险不涵盖的长时间部分停业造成的损失。与传统保险条款中诸多除外责任不同，自保保险的条款旨在保护企业主的利益。
此外，自保保险不会因其他公司的不当行为而受到惩罚，您支付的保费也不会基于其他类似企业提出的索赔。促使企业考虑放弃传统保险的其他因素包括保费上涨以及寻求更经济实惠的保险方案。
考虑到这一点，希望更好地掌控现有保险范围和方案的企业可以利用自保保险计划，根据自身独特的风险状况量身定制保险方案。
相关阅读：企业如何应对贸易战的挑战
自保保险的保费并非沉没成本
传统保险公司的高额保费可能会让您的企业疲于应对不断上涨的月度保费，并最终导致企业承受高额支出带来的压力。然而，通过自保保险，即使没有获得赔付，您的企业也能保留利润。
这些保留利润还可以延期缴纳损失准备金的税款，从而积累更多资金用于投资或应对诸如诉讼等不可预见的财务冲击。这些资金还可以用于在经济衰退或类似的财务困境中保护您的企业免受损失。
对于小型企业而言，这有助于其实现规模化发展，因为向传统保险公司支付的高额保费意味着企业在业务扩张方面投入的资金会减少。此外，随着企业规模和需求的增长，所需的保险范围也会相应扩大，以确保业务得到充分的保障。相比之下，Kiplinger 指出，自保保险可以根据企业发展过程中出现的需求，提供这些必要的适应性保障。
相关阅读：2022 年自保保险的 5 个热门考量
保单差异和常见问题解答
如果您的企业面临潜在的网络攻击、医疗事故诉讼以及其他诸多代价高昂的风险，那么传统保险公司提供的这些保障的免赔额正在不断增加。网络保险的保费涨幅高达 50% 至 100%。
回到之前的例子，自保保险保单条款的灵活性将有所帮助。2020 年的社会动荡就证明了这一点，当时美国各地爆发了抗议、骚乱和静坐示威，导致社区遭到破坏。如果企业周边区域受损且无法进入，但企业本身并未受损，那么传统的保险政策将不会生效，这意味着您的企业可能需要自掏腰包支付损失。
相关阅读：保护企业免受网络攻击的 5 种方法
那么，制定一份新的保单需要多长时间呢？
由于企业对保险保障的需求不断变化，传统的保险公司往往难以跟上步伐。新的威胁出现，也意味着需要制定新的保单来覆盖企业中存在的薄弱环节。
德勤指出，传统保险产品开发和上市需要 12 至 18 个月的时间。鉴于风险出现的速度以及可能对企业造成的损害，这样的时间跨度显然无法接受。
此外，购买传统保险时，启动成本仅限于保费。然而，成立一家自保保险公司则需要启动资金和资本金，包括设立费和法律费用。这是因为自保保险公司是依法成立的公司。此外，自保保险还能帮助您完善风险缓解策略，积累资金以应对潜在损失。
虽然对于非保险专业人士而言，成立自保公司可能令人望而生畏，但许多自保管理公司可以作为企业主的保险前台，帮助企业成立和管理其全资拥有的自保公司。
自保保险对于各种规模的企业来说都是一个可行的选择。最适合实施自保保险的企业是那些面临复杂、不断变化、难以通过传统保险计划承保的风险，以及那些希望提高现金流、流动性和盈利能力的企业。传统保险和自保保险各有特点，没有哪一种一定比另一种更合适。无论您选择哪种方式，为您的企业制定合适的保险计划都是必不可少的。