Group captives are one important form of workers compensation insurance. These options allow members to join together to increase purchasing power and reduce risk. They help to improve cash flow and lead to better income tax benefits. However, this type of insurance option isn’t the right solution for everyone.
It’s important to recognize that there are multiple types of group captives. They are either homogenous, or only open to a specific group of members, and heterogeneous, or open to a variety of members. Within these two classifications, there are many minor differences from one agency to another. How can you tell if this option is right for you?
Determine Your Ability to Share Risks
Each member of the policy should be able to share the same amount of risk. You, as a member, must understand the magnitude of the risk as a whole and also on an individual basis to make …