Hunter Nelson explains group captives, insurance pools where members must meet minimum premiums: $100k for construction, $250k for trucking, up to $600k for some industries. One member with $3 million in claims against $1 million in premium can drain the shared fund, so careful member selection matters.
You have two options really when it comes to captives. You have a group captive, you have a single parent captive, and there's a bunch of other like little nitty-gritty stuff, rent-to-captive, all sort of stuff, right? A group captive is one that's much easier to get into. There's gonna be a premium threshold where it makes sense to get into it and even just be accepted into it. But that premium threshold is going to depend on the industry you're in. If you guys are in construction, might be $100,000. Trucking, they will start at $250,000. Um, some are $600,000, but there's different group captives out there. Because if you see a guy that turns in $3 million a year in claims, pays $1 million in premium, you're gonna go, this dude's gonna suck all the money out of the fund that I'm part of. That's my money in there. I don't want this guy in here. And so you get that, you get that group. Um, and it's a little more spread out on the risk.
