Why Consider Georgia Captive Insurance?
Coca-Cola isn’t the only influential company in the great state of Georgia. Middle market businesses across the state also contribute to a thriving economy; commercial shipping, energy and other industries lend to the unique patchwork. But each company, no matter the industry, faces overt and hidden risks; risks that cannot and should not be ignored, as losses could lead to devastating financial repercussions. Commercial insurance coverages may be unavailable or too expensive for many business owners. This is why Georgia captive insurance services make sense. Forming your own insurance company (a captive) as a supplement to your existing insurance policy provides unrivaled risk coverage and planning benefits. Non-standard risks can be covered with tailored policies and insurance premiums paid to the captive are made on a tax-deductible basis. Other planning benefits such as secured loans may also be available. Read on to learn more why Georgia captive insurance should be part of your risk management strategy.
Choosing the Best Captive Managers in Georgia
Agricultural business is BIG in Georgia. In fact, the industry accounts for $72 billion annually and is a huge contribution to the state’s overall economy. The country’s pecans, blueberries, peaches, peanuts, and poultry products are farmed and produced in Georgia and one in seven residents in the state work in agriculture or related sector. With all of the moving parts of the industry, risk becomes inevitable. Businesses supporting the agriculture industry in Georgia have a number of risk exposures that could affect revenue, should losses occur. These include weather-related risks such as excessive rainfall, hail storms and wind that could destroy crops and consequently, supply chains. They include institutional policy changes, such as uncertain land policies and tenure systems.
To combat these and other risks, owners of closely-held, midmarket businesses can form their own captive insurance companies. The coverages written through the captive can supplement the business owner’s existing policy, filling gaps that could negatively affect operations in the event of a loss.
Capstone Associated Services, Ltd., in collaboration with The Feldman Law Firm LLP, provides true turnkey captive insurance planning in the state of Georgia, which includes insurance, tax, and legal services. The company leverages its in-house expertise to design, implement, and manage each captive insurance company—the client, however never loses control. Clients are kept abreast of milestones and major events at every step of the process. Capstone is the premier Georgian captive manager. For over CAP_YEARS_NUMBER+ years, the company has built strong relationships with captive insurers in Georgia and across the U.S. It continues to set the standard for exceptional captive insurance planning to closely-held middle market organizations.
Captive Insurance in Georgia: Taking a Proactive Approach
It’s important that business owners take a more proactive, ardent approach toward their risk management initiatives. Relying solely on commercial insurance can address some risks, but this decision can present vulnerabilities if there are gaps in coverage.
Alternative risk planning, which includes the formation of a Georgia captive insurance company, can make businesses in the state more resilient, despite the many risks they face every year.
Other risks in the agriculture industry in Georgia include but are not limited to:
- Biological & environmental: Crop and livestock pests and diseases, contamination related to poor sanitation, contamination of natural resources, and pollution
- Market fluctuations: Changes in supply and demand that affects domestic or international prices of products, changes in food safety requirements, changes in market demand for timing of product delivery, changes in supply chain reputation
- Logistical & infrastructural: Changes in transport, communication, energy infrastructure, energy costs, labor disputes, etc.
Other industries in The Peach State have made an impact on the economy including automotive, manufacturing, trade, transportation, education, and health services. Its automotive industry alone generates $9.5 billion per year. More than 20 percent of the East Coast’s automotive exports leave through Georgia’s ports. Tourism is another revenue-generator; accounting for $53.6 billion (about 14 million people visit annually). These industries also have risk exposures that should be mitigated before a loss event occurs.
Some examples of coverages that could be written through a captive are:
- Loss of a major supplier. Business interruption and expense stemming from the loss of a major supplier
- Loss of services. Protects the insured against costs stemming from loss of services from a key person or group
- Product recall. Protects against expenses involved with a mandatory or voluntary recall of products
- Product impairment. Protects the insured against expenses and third party liability involved with a mandatory or voluntary recall of specified products due to product tampering or product extortion
General liability and other coverages may be available to cover common risks. However, commercial insurance does very little in the way of overall planning and many insurance carriers do not permit insureds to tailor coverages according to their specific risks.
Along with its primary function as a risk coverage alternative, a captive insurance company can provide ancillary benefits such as secured loans (from the captive to the operating company), asset protection, dividends, and improved tax planning.
Contact Capstone today at WEB_TEL to learn more.
(Sources: Newsmax.com, Forum for Agricultural Risk Management in Development)