As the risk management programme identifies the key risks of your business, a captive adds the ingredient of estimating the amount of potential loss. This is done through:
Good risk management is crucial to the operation of any business, and captive insurance companies are excellent vehicles for effective risk management, says John Talley of the Missouri Department of Commerce & Insurance.
As with any business venture, the prospective captive owner must approach forming an insurance company analytically. An insurance company is very likely outside of the understanding and business acumen of the business owner. It will be necessary to obtain the services from individuals and organisations qualified to operate a captive insurance company.