A Risk Retention Group (RRG) is an owner-controlled insurance association authorized by the Federal Government that, in essence, writes their own liability insurance. They are typically established during periods of time where malpractice insurance company premiums tend to be consistently high across the board. They are an alternative to medical malpractice insurance, but are bound to state-specific regulations that make their product line often limited to professional liability insurance (as opposed to general liability).
While the insured can exhibit control over how a claim is handled, RRG’s don’t usually have the same track record of other insurance carriers Each individual group is usually much, much smaller than the number of insured’s of a carrier, because each group member is essentially paying for each other’s premium. When a claim is filed against one group member, everyone’s premiums go up because all members share liability. Additionally, RRG’s are not backed by the State Guarantee Fund, which means that the failure of a RRG terminates the insured’s coverage with no financial backing. Because of this, insolvency is a noteworthy issue with RRG’s, and is mainly why they do not have long-standing track records.
Being with an insurance carrier is a very different experience from being with an RRG. Prices will vary depending on which carrier a client goes to, but the resources carriers offer make all the difference. Carriers offer Cyber Liability Coverage, Worker’s Compensation, and Property Damage policies than can be bundled with a malpractice liability policy. In addition, carriers often offer risk prevention resources, such as classes, online literature, and access to seminars that give the insured the opportunity to lower their premium and receive CME certification. Few, if any, RRG’s can claim those offerings.