Risk Purchasing Group
What Is a Risk Purchasing Group?
A risk purchasing group (RPG) is a way for businesses with similar risks to buy liability insurance together through a shared program.
The group itself does not insure you. Coverage is issued by a licensed insurance company. The RPG is simply the structure used to organize and purchase the insurance. If your policy is part of an RPG, you are still insured by the carrier named on your policy.
Risk purchasing groups are authorized under the federal Risk Retention Act. They are commonly used for specialized or niche liability programs.
How Does a Risk Purchasing Group Work?
A risk purchasing group organizes how coverage is offered. They often help leverage lower premiums for policyholders and find carriers to sell the policies through. That means the carrier still insures you, not the RPG.
| Role | Who They Are | What They Do |
|---|---|---|
|
Member |
Your business |
You join the group and buy liability coverage through it |
|
Risk purchasing group (RPG) |
The organized buying group |
It brings similar businesses together to purchase insurance at lower rates |
|
Insurance company (carrier) |
The actual insurer |
The carrier issues the policy and pays covered claims |
|
Program administrator (optional but common) |
The company that runs the day-to-day program |
Handles enrollment, certificates, billing, and service |
Questions to Ask if Your Coverage Is Through an RPG
- Who is the insurance carrier listed on my policy?
- What type of coverage is purchased through the RPG?
- What makes this program different from a standard policy?
- How do I file a claim?
- Can I leave the program if my needs change?
- Are there any membership or program fees?
What Is a Risk Purchasing Group vs Risk Retention Group?
A risk purchasing group (RPG) is a buying group. It helps members purchase liability insurance from an outside insurer.
A risk retention group (RRG) is an insurance company owned by its members. It issues policies and pays claims itself.
While they sound similar, an RPG helps you buy insurance, while an RRG actually provides the insurance.
Why Do Insurers Use Risk Purchasing Groups for Small Businesses?
Insurers use risk purchasing groups to serve businesses with similar risks more efficiently. Programs may offer clearer eligibility rules, streamlined enrollment, and coverage tailored to how your business operates.
| Feature | How It Works | How It Benefits You |
|---|---|---|
|
Specialized coverage |
Policy forms tailored to one type of risk |
Coverage designed for your profession or niche |
|
Underwriting consistency |
Similar rules applied across many similar members |
Faster decisions and clearer eligibility guidelines |
|
Group purchasing power |
Carrier sees a whole class instead of isolated risks |
More competitive pricing or structure than going solo |
|
Administrative efficiency |
Shared program admin, forms, and processes |
Easier online enrollment, COIs, and renewals |
Being part of a risk purchasing group does not change who pays claims, but it does shape how your coverage is structured.
Knowing when you are in an RPG, who the carrier is, and how the program works helps you understand your insurance.
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