How Similar Businesses Spread Risk Liability Between Each Member

A group of businesses who partner together and face similar liabilities in their commercial dealings can choose a risk retention group (RRG) insurance plan to manage their insurance individually. Below we will discuss what is covered and how it can resolve complex insurance management issues.

Which Exposures Does an RRG Cover?

In order to qualify for risk retention group insurance, all business members must have related industry liabilities and deal in a similar line of work. Unless specified by state regulation, an RRG can be set up for businesses based out of multiple states even if they are chartered out of one. Here are the following types of insurances compatible with an RRG plan.

  • General Liability
  • Professional Liability
  • Errors and Omissions-Directors and Officers
  • Medical Malpractice
  • Product Liability


Property, personal or employment insurances cannot be managed with an RRG plan and are of each individual proprietors’ sole responsibility.

Benefits of Choosing Risk Retention

Establishing a risk retention group may not be suitable for all industries or business groups, so it’s especially important to consider the advantages and disadvantages. Here are a few of the benefits of setting up an RRG.

  • No upfront expenses or fees
  • Multiple state filing and licensing requirements exemption
  • Broker countersignature law exemption
  • Complete risk management control for each member’s establishment(s)
  • Market residual and impact exemption-Stabilizes industry-wide coverage and rates
  • No coverage bundles with better individual rates


An RRG does not offer guaranty fund insurances and is limited to liability insurance coverages only.