What is Risk Purchasing Groups?
A Risk Purchasing Group (RPG) is a legal entity formed by businesses or individuals with similar liability exposures who join together to purchase group insurance. RPGs allow members—such as contractors, retailers, or small manufacturers—to obtain commercial insurance coverage collectively, often at more competitive rates than if purchasing individually. This structure is especially useful for industries facing complex liability exposures or operational hazards.
Who needs it
Risk Purchasing Groups are ideal for clubs, associations, service providers, and other organizations that share common risk profiles. For example, an association of event organizers might join an RPG to secure event liability insurance that covers participant injury or property damage during events. Similarly, professional service firms may use an RPG to manage professional liability exposures more efficiently.
What it typically covers
Coverage through a Risk Purchasing Group often includes general liability insurance, commercial property coverage, and sometimes more tailored protections such as equipment breakdown or commercial auto exposure. Depending on the group’s focus, policies may also address specific exposures like spectator injury risks or job-site hazards common in the construction industry.
For example, a group of real estate agencies may secure shared liability and property insurance through an RPG, reducing individual administrative burdens while maintaining adequate protection across locations.
Common exclusions or limitations
Like all insurance, RPG policies come with exclusions. These may include intentional acts, certain professional services, pollution-related incidents, or risks outside the group’s defined purpose. Additionally, RPGs cannot underwrite insurance themselves—they must work with licensed insurers. It's important for members to understand what is and isn’t covered.
Factors that influence cost
Premiums within an RPG are influenced by multiple underwriting factors such as the group’s overall claims history, member industries, and individual loss profiles. Risk management practices, safety protocols, and operational scale also play a role. For example, a transportation-focused purchasing group may face higher costs due to vehicle-related exposures.
Members benefit when the group maintains strong risk controls, which can lead to favorable terms from insurers.
Proof of insurance & compliance
Members of an RPG receive individual certificates of insurance showing their coverage and limits. This is essential for meeting contract requirements, licensing needs, or venue regulations. While the group negotiates as a whole, each member retains their own proof of coverage for compliance and operational use.
How to get a quote
If you're part of an industry association or group with shared liability concerns, you may be eligible to join an RPG. You can discuss with an agent to explore available group insurance options tailored to your field.
Those in niche industries may also find value in specialized programs such as the Realty Purchasing Group Insurance or the Petroleum Marketers Purchasing Group. These programs provide targeted coverage for their respective sectors, helping address industry-specific exposures.
For larger entities, options like the Phoenix Risk Management Large Account Workers Compensation Program may offer broader solutions, especially where workers compensation is a key concern.
Frequently Asked Questions
What is the main advantage of joining a Risk Purchasing Group?
It allows members to access group-negotiated insurance policies that may offer better terms or lower premiums than individual policies.
Is an RPG the same as a captive insurance company?
No, an RPG purchases insurance from licensed carriers, while a captive is an insurance company formed and owned by its insureds.
Can any business join a Risk Purchasing Group?
Only businesses with similar liability exposures can form or join an RPG. Membership criteria vary by group and insurer.
Does each member have their own policy?
No, the group purchases a master policy, and individual members receive certificates of insurance under that policy.
Are Risk Purchasing Groups regulated?
Yes, RPGs are governed under the federal Liability Risk Retention Act and must comply with state insurance regulations.
Still have questions? Talk to a local insurance expert.