Purchasing Group

What Does Purchasing Group Mean?

A purchasing group is an organization that acquires liability insurance for its members at a lower cost and with broader coverage than what is typically available to individuals. These arrangements were made possible by the Liability Risk Retention Act of 1986.

Insuranceopedia Explains Purchasing Group

Before 1986, there was a liability coverage crisis, with liability insurance being too expensive and certain types of coverage unavailable in some regions. To address this, the U.S. Congress passed the Liability Risk Retention Act of 1986. Under this act, professionals, businesses, and municipalities within the same state could form groups to purchase more affordable and comprehensive liability insurance policies.

Purchasing groups, along with the insurers that sell to them, are regulated by state insurance departments.