Monthly ArchiveNovember 2019

What is a Risk Retention Group?

You may have heard the term risk retention group or RRP and wondered what it means. A risk retention group is a term used to define a type of insurance company that is owned by its members. Members are usually from similar types of businesses, which means they share a similar type of risk and liability. A risk retention group exists to assume liability and spread it between its members.

Are There State or Federal Regulations?

As a whole, insurance is regulated at the state level. This is true for everything except RRG’s. In 1986, The Federal Liability Risk Retention Act was put in place to provide affordable liability insurance options, which were lacking in the 80s. It remains in place today and is still the only insurance regulation on the federal level. Risk-retention groups are federally chartered but still require state licensure. Once an RRG is licensed in the state where it is domiciled, it can do business across state lines without further state licensing.

What Are The Advantages of Using an RRG?

Insurance companies like Caitlin Morgan Insurance Services provide direction for companies that want to be a part of a risk retention group. They can explain some of the advantages that come with a membership that includes the following:

  • not having to worry about multiple state licensing and regulations
  • custom benefits and rate structures
  • more member risk controlĀ 
  • removing market residuals
usrisk

The Unique Insurance Needs of Professional Employer Organizations

Running a staffing agency or professional employer organization can offer some unique challenges. When you are responsible for more than 150,000 individuals at any given time, it can add a lot of stress to your life. It can be particularly difficult to determine the best fit for your needs in regard to insurance. In order for your PEOS to thrive, you need to think about the basic coverage options presented to you and which will help your company avoid financial issues.

Coverage Options

As mentioned by the experts at www.usrisk.com, there are certain considerations your professional employer organization should take when selecting insurance. Due to the nature of your business, you may need very specific plans in order to cover the demands placed on your clients or employees. Common coverage options to consider include:

  • General liability
  • Errors & omissions insurance
  • Employment practices liability

Additional Policy Considerations

There are also some additional policies you may wish to consider. Auto, crime, and property options are typically available to companies that require this coverage. Weigh out your options and determine which policy will help protect you in the broadest range of scenarios.

Getting the most out of your insurance policy takes time. Help your professional employer organization see the success it deserves by researching a coverage option that works best for your future.