Guaranteed cost insurance is the right structure for most businesses, and it stays right up until the day it quietly is not. There is no letter in the mail when that day comes. There are signs. Here are the ten we look for.
- Your combined casualty premium across workers’ compensation, general liability, and auto has crossed $250,000 a year.
- Your five-year loss ratio runs meaningfully below your class average, and your renewals do not seem to notice.
- Your rates go up in years you had zero claims, and the explanation is always the market, never you.
- You have a real safety program with documentation, training records, and a return-to-work process that actually gets used.
- Your losses are frequent enough to be predictable and small enough to be fundable. Predictability is an asset. Somebody is currently collecting the return on it.
- Your e-mod has been below 1.0 for years and the reward has been a slightly smaller increase.
- You budget in three-to-five-year horizons for every other capital decision, and twelve-month cycles for this one.
- Your CFO has started asking what the carrier’s margin on your account actually is.
- You have the balance sheet to post collateral without straining working capital.
- You have stopped shopping your insurance every year because you learned what that does to your file, and you want a structural answer instead of a cheaper quote.
What if most of that list is you?
Then guaranteed cost is probably costing you more than it protects you, and the next step is a structural conversation: a large deductible program, a group captive, or in time something you own outright. The Captive Readiness Assessment is the three-minute version of that conversation.
What if it is only two or three?
Then stay put, and mean it. We wrote an entire page on when traditional insurance is still right because the honest answer for most businesses is exactly that. The goal was never the fanciest structure. It is understanding the risk you are keeping and the risk you are transferring, and paying for the split on purpose.