If your small business is in need of insurance but the providers seem too expensive, you may want to consider looking into coverage through a risk retention group (RRG). This is a liability insurance company that is owned by those it insures. It is made up of businesses with similar insurance needs that have pooled their risks to form an insurance group. There are state and federal guidelines and regulations that govern the insurance offered and the practices of the RRG, but these are cost-effective ways to find the coverage you need, especially if you operate in a niche area.
Initial RRGs were only allowed to write product liability insurance, but an amendment of the Federal Liability Risk Retention Act in 1986 made it possible for these groups to offer additional forms of commercial liability coverage. According to the team at Caitlin Morgan, you can find RRG plans for the following concerns:
- General Liability
- Errors and Omissions
- Directors and Officers
- Medical Malpractice
- Professional Liability
- Product Liability
One of the most popular forms of coverage sought by an RRG is medical malpractice insurance, with the healthcare historically making up the largest percentage of the formations of RRG groups. Unfortunately, this trend has also brought the majority of RRG closures. The good news is that your ability to join an RRG isn’t limited to just what is available in your state, but what is in your similar line of industry.