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break point

Break point refers to the point at which layers of losses within a captive or risk retention group (RRG) are differentiated as being either "primary" or "excess" losses.

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For example, a typical break point for a large group captive may be $250,000. Losses above this level are considered "excess," and losses below are considered "primary." The optimal break point for any program must be determined by that program's individual characteristics. There is no "correct" break point.