Why Captive Insurance Could Be Your Company's Best-Kept Financial Secret
- Cottingham & Butler
- Sep 15
- 2 min read
When most business owners think about insurance, they picture premiums as a necessary expense that simply vanishes into the void each year. But what if there was a way to maintain comprehensive coverage while potentially getting money back when things go well?
Enter captive insurance – a strategy that's quietly revolutionizing how smart companies approach risk management and turning insurance from a pure cost center into a potential profit center.
Taking Control of Your Insurance Destiny
Traditional insurance operates on a simple premise: you pay premiums, and those dollars disappear regardless of your claims experience. Market forces, other companies' losses, and factors completely outside your control drive your costs higher each year.
Captive insurance flips this model on its head. Instead of sending your premiums to a faceless corporation, you join a group of like-minded companies that essentially self-insure. When the group performs well and claims are favorable, you don't just avoid rate increases – you actually receive dividends back.
The Numbers Don't Lie
Cottingham & Butler captive members have received over $330 million in dividend returns during profitable years. That's money that would have otherwise disappeared into traditional insurance company offers, now flowing back to strengthen participants' bottom lines.
These returns come while maintaining the comprehensive coverage your business needs, creating a win-win scenario that traditional insurance simply can't match.
Choosing Your Captive Partner: Due Diligence Essentials
Not all captive arrangements are created equal. Before diving in, business leaders should evaluate potential partners across several key dimensions:
Track Record Matters: Look for proven experience in captive management. Success in this space requires specialized expertise that develops over years, not months.
Retention Tells the Story: High renewal rates among existing members speak volumes about satisfaction and performance. If companies are staying put, there's usually a good reason.
References Are Non-Negotiable: Any reputable captive will have multiple satisfied members willing to share their experiences. If they won't provide references, keep looking.
One-Stop Service: The best arrangements offer comprehensive support, handling everything from claims management to safety consulting under one roof.
Know Your Risk Profile: Understand how risk is shared within the group and what historical performance looks like.
Partnership Transparency: You should know exactly who you're partnering with and what their track record entails.
Ready to Explore?
If captive insurance sounds like it might be a fit for your company, the next steps are straightforward: submit your data for evaluation, schedule an on-site loss control assessment with safety experts, and receive a formal proposal with firm pricing.
In a business environment where every dollar counts, captive insurance offers something increasingly rare: the chance to maintain essential coverage while potentially improving your financial position. For companies tired of watching their insurance premiums disappear without a trace, it might just be the alternative they've been looking for.
Interested in learning more?