At times, commercial insureds discover that the insurance market does not offer the type of financial protection that meets their specific needs. A risk retention group (RRG) is a good alternative for markets that do not have available coverage for lines of risk or find that it is not financially feasible to rely on the commercial marketplace. Membership in an RRG is limited to those who have the same types of liability. This typically limits the policyholders to organizations within the same type of business or activity. Caitlin Morgan insurance services notes some considerations for companies that are interested in RRGs.
Members of an RRG are able to control their own program by unbundling the services. This allows them to manage their own risk and litigation issues. By customizing the safety and risk management, professionals are able to craft their liability insurance to meet their group’s specific needs without spending money on unnecessary coverage.
Insureds are typically more aware of the quality of loss control and claims management activities, and this tends to bring financial benefits. In the long run, an RRG is more cost-effective than other options. However, any organization that opts for an RRG must take into account the potential for financial instability if the management is not effective. Caitlin Morgan insurance services can work with groups to ensure good management for a sound and beneficial group.