Certified Employee-Owned is excited to spotlight Scott Insurance, a Virginia-based insurance company and long-time proponent and participant in employee ownership. Scott Insurance offers a wide variety of products to its customers, including employee benefits, surety bonds, personal insurance, and property and casualty insurance.
Beyond its more traditional insurance products, Scott Insurance has also succeeded in partnering with the National Center for Employee Ownership (NCEO) to design captive insurance products for companies that have an Employee Stock Ownership Plan (ESOP). Captive insurance is a form of self-insuring that allows participants to reduce exposure to volatility in the broader insurance market.
In its partnership with NCEO, Scott Insurance has created insurance programs that allow a group of companies with ESOPs to band together and self-insure by forming a new, co-owned insurance company. For employee-owned companies with strong year-over-year performance, this can help reduce the cost of insurance and take ownership of their risk management. According to NCEO, ESOP participants in captive insurance programs can reduce their annual premiums by 10% to 25%. In addition, participants can generate investment income and have claims costs returned to them in years when claims are low. Scott Insurance and NCEO currently offer health insurance, workers compensation, general liability, and automobile coverage through their captive insurance programs.
Legacy of EO
Scott Insurance was one of the country’s first companies to adopt an ESOP in 1975, a year after the Employment Retirement Income Security Act (ERISA) wrote them into law. The company is now 100% employee-owned through its ESOP, which includes over 315 employee-owners, and it actively markets the advantages of employee ownership to clients and job seekers.
In the insurance industry, market pressures from mergers and acquisitions make it rare for a company of Scott Insurance’s size to remain independent. The company maintains its employee ownership has been integral to remaining one of the largest independent insurance agencies in the Southeast, with nine offices across Virginia, Tennessee, North Carolina, and South Carolina. The company’s ownership structure — which helps tenured employees build wealth over the long-term — works hand-in-hand to align the interests of its employee-owners with providing high-quality service.