Reason #1 – Claims professionals that work for you.
If you currently write checks to an insurance company for Workers’ Compensation, Auto Liability or General Liability, you are helping to support their Claims Unit. In the event of a claim, the insurance company’s Claim Unit has some responsibility to protect your interests, but mostly the Claims Unit exists to protect the insurance company’s interest. It’s not a slam on them – they’re in the business to make money by retaining the premiums you paid to them.
The Captive is a different world from your insurance company based claims experience. Claims are reported to and managed by a Third Party Administrator (TPA). The TPA is hired by (and can be fired by) the Captive, and their job is to settle claims quickly, effectively and to the very best of your advantage. That approach applies to closing out claims reserves (amounts expected to be paid to the claimant in the future) as quickly as possible. Often, clients of insurance companies have experienced unnecessary delays in closing claims just because of poor communications within the company. Insurance companies also get to keep the tax deduction on the claims reserved until paid out or closed, so they may not have your sense of urgency. Keep in mind that a delay in closing out a reserve will have an adverse effect on your experience rating, something that occurs on all casualty business not just Workers’ Compensation.
The “bottom line” is that having your own adjuster rather than relying on the insurance carrier’s provides the benefit of having an important advocate in your corner and a positive impact on controlling your claims expenses.
There are nine more reasons to follow, so please give your EC&S representative a call to discuss your options through a captive in more detail.