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Your experience in an captive insurance program

  • 1.  Your experience in an captive insurance program

    Posted 10-30-2019 14:10
    I found a lot of discussion on this in the archives but not a lot of current posts. So, bear with me if we have already beat this subject into submission but I thought that some more current posts might be beneficial. 

    I'm looking into a captive insurance program. We looked into a number of group captives and all of them would love to have our WC but none of the fronting carriers were interested in our residential construction exposure for GL. Most of our residential revenues are in separate wraps, either in an OCIP or CCIP, but there are sometimes that  an owner elects to use our practice policy. Usually these are for affordable housing projects and/or senior housing projects, nothing that is for-sale. 

    Since our current GL carrier already has our residential risk and is comfortable with it, and our loss runs, we started looking for captives in which they are the fronting carrier and we got the opportunity to start a brand new group captive and be the founding member of the group.

    Positives: as a founding member of the group we would get to set up the ground rules and have significant influence on the approval of additional members to make sure they are a good fit.

    Negatives- what if we have a party and no-one shows up? We may not be able to share fixed costs, share risk layers if there was a large claim, loss of tax benefits, etc. 

    Any words of wisdom, negative experiences and/or advice out here? Anyone out there that is in a single parent captive? 

    Thanks,

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    Michael Grant CPA
    Chief Financial Officer
    Cahill Contractors
    San Francisco CA
    (415) 986-0600
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