What is the purpose of Risk Retention Groups?

The purpose of Risk Retention Groups (RRGs) is primarily to provide coverage against product liability exposures. RRGs are a unique type of insurance company that is formed to allow members with similar risks to pool their resources and share the costs associated with those risks. This structure can be particularly beneficial for industries facing high product liability risks, as it enables members to tailor coverage to their specific needs while potentially lowering premiums due to the shared responsibility for claims.

By focusing on product liability, RRGs help businesses manage their insurance costs more effectively and ensure that they have coverage that directly addresses the unique challenges they face in their respective industries. This model of risk sharing enhances the accessibility of insurance for those with specialized needs that may not be adequately covered by traditional insurance providers.